The SBA recently released the Government Wide Small Business Procurement Scorecard for fiscal year 2021. This annual scorecard details information on the various categories of small businesses recognized by the SBA, including whether SBA met its goals related to small business federal contractors. Specifically, the scorecard is used to assess “how well federal agencies reach their small business and socio-economic prime contracting and subcontracting goals,” to “provide accurate and transparent contracting data,” and “report agency-specific progress.” SBA met or exceeded its goals in the majority of categories despite the fact that the overall number of small businesses decreased. Below, we take a look at the process, the numbers, and discuss which groups are, and which are not, receiving the greatest benefits.
First, a little background on the scorecard (just in case this is your first time hearing about this). Congress sets annual goals for federal agencies to meet when awarding contracts and subcontracts to small businesses. These goals include governmentwide goals, as well as agency specific goals, which are determined pursuant to 15 U.S.C. § 644(g). To determine these goals, each included agency submits proposed goals based on SBA’s review of agency year-to-date performance prior to the beginning of the fiscal year. SBA then evaluates each agency’s proposal, and either notifies the agency that its proposal is acceptable, or negotiates with the agency to reach a goal that is acceptable. In total, there are 24 agencies total. You can find a list of all included agencies as well as more detailed information on how the process works here. Following each fiscal year, SBA reviews information from the various agencies to determine whether goals were met and assigns each agency a “grade” based on how well it performed.
So, where were the most federal contracting dollars spent? Overall, there was $154.2 billion directed toward small business Prime Contractors in general. This represented 27.23% of total federal contracting dollars spent and exceeded its goal of 23%. The largest sub-category was small disadvantaged businesses, including those in the 8(a) Program, which received $62.4 billion, or 11.01% of all federal contracting dollars. That is over twice as much as its 5% goal for the year. Service Disabled Veteran Owned small businesses (SDVOSB) also exceeded its 3% goal for the year with $25 billion, or 4.41% of all federal contracting dollars.
Unfortunately, women owned small businesses (WOSB) and HUBZone businesses, in what appears to be a trend throughout the last decade, fell short of their goals. WOSB’s goal for fiscal year 2021 came in at $26.2 billion, or 4.63%, while its goal had been 5%. This means that agencies, as a whole, did not reach their WOSB goal for the ninth time in the past decade. However, WOSB performance is marginally better than HUBZone business’s, which came in at $14.3 billion, or 2.53% in fiscal year 2021. This means the 3% goal for HUBZone contracts has not been met a single time in the past ten years.
Additionally, the overall number of small businesses decreased 5.85% from 2020. The category with the largest decrease was, once again, WOSB, with a 6.8% decrease. Despite HUBZone receiving the smallest percentage of small business contracting dollars, it was the category with the largest gain in terms of prime contractors, with 3.8% growth from 2020 to 2021.
The agency-specific score cards show that overall agency performance is strong and that agencies are overall performing better than in the 2020 fiscal year. While not specifically mentioned in the scorecards, this increase could be due to both agencies and contractors adjusting to changes brought on by Covid-19. Nonetheless, there are a few agencies that fall short. The Department of Health and Human Services and the Department of Treasury were both assigned a “B”, but the worst offender is the Department of Housing and Urban Development (HUD) which received a “C”. This makes the second year in a row that HUD was the lowest-rated agency.
Taken as a whole, more agencies met their goals in the 2021 fiscal year than in 2020, even though the number of contracts being awarded to small businesses generally decreased. More federal contracting dollars were directed towards small businesses as well. Nonetheless, there is still work that needs to be done to increase the number of contracts being awarded to both WOSBs and HUBZones if they are going to meet their goals.
Questions about this post? Email us.
Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook.