The SBA released its annual Small Business Procurement Scorecard for fiscal year 2020 of how federal agencies are doing in meeting their small business goals. The SBA, in announcing the Scorecard, highlighted that small businesses received $145.7 billion in federal contracts , a $13 billion increase from the previous fiscal year. But looking beyond the headlines, not all of the trends are positive for small businesses. Let’s take a look at the numbers.
As a reminder, Congress has set goals for federal agencies to award contracts and subcontracts to small businesses under 15 U.S.C. § 644(g). The Scorecard tracks how the federal government as whole, and individual agencies, are accomplishing those goals.
First, the great news is that contracts awarded to small businesses were at $145.7 billion in fiscal year 2020, eclipsing last year’s total of $132.9 billion in prime contracts. This represented 26.02% of overall contracting and exceeded the goal of 23%. The percentage of overall contract dollars is down from 26.5% in the past year.
The federal government met its goals for a number of other small business contracting programs too.
- Small Disadvantaged Businesses (including those in the 8(a) Program) earned 10.29% of federal contracts, or $51.6 billion, well exceeding the goal of 5%
- Service Disabled Veteran Owned Small Businesses exceeded the 3% goal with 4.28% of federal awards, or $23.9 billion.
Unfortunately, the government did not meet its goals for the following programs:
- Women Owned Small Businesses earned 4.85% of federal contracts or $26 billion, just under the 5% goal. While the total dollars were up from 2019, the percentage of overall dollars was down.
- HUBZone businesses earned 2.44% of federal contracts or $13.6 billion, under the 3% goal. This percentage did go up from the prior year mark of 2.28%.
In addition, the total number of small businesses went down, as did the total number of WOSBs. The numbers of small businesses in the Small Disadvantaged Business, SDVOSB, and HUBZone categories went up. (This calculation was based on the vendor count in the top 100 NAICS.).
HUBZone remains the category with the fewest number of businesses in that category. It’s unclear if that is due to the compliance restrictions in the program, or the lack of opportunities for HUBZone set-asides, or some other reason.
Looking to the specific agencies, there was some tough grades coming out. While many agencies got As and there were a few Bs, two agencies stand out for getting poor grades. We’re looking at you: Department of Education and Department of Housing and Urban Development. Education got a C and HUD got a D. As we’ve written about in the past, the SBA has been pretty easy on agencies, so it’s good to see them giving some tough grades. Still, as in years past, a number of agencies didn’t meet their goals and still go some pretty good grades. That’s something the SBA should consider changing.
There is definitely some good news coming out of this Scorecard. Overall small business dollars went up. On the other hand, federal agencies missed the mark for both the WOSB program and the HUBZone program, and the overall number of small businesses went down, so there is room for improvement on those fronts. The Administration’s recent announcement that it plans to boost Small Disadvantaged Business contracting by 50% means there is a recognition that there is room for federal agencies to do better on small business contracting.
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