It’s that time of year again! The time of year that all federal government contractors wait for with bated breath to see how well agencies performed in relation to their small business subcontracting goals (or at least how well the metrics show them to be doing). Time for the SBA’s Annual Scorecard. Ok, so maybe it’s not quite that hyped up. But it is informative, nonetheless. And for 2023, it looks like things are looking up with every category making gains from the previous year. Once again, government-wide performance earned an overall score of an “A” by achieving 109.13% of its goal coming in with a whopping $178.6 billion spent with small business contractors.
First, a short primer for those unfamiliar with the SBA scorecard before we get into the specifics making up this record-breaking achievement.
In case you have never heard of these scorecards in the past, the annual scorecard details information on the various categories of small businesses recognized by the SBA. 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.” 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. 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.
Now, onto the reason everyone is here: the numbers.
Overall, there was $178.6 billion of federal contracting dollars directed toward small business prime contractors. The 2023 small business contracting goal was set at 23% and the agencies knocked it out of the park with an all-time high of 28.4%. Wow! This is an increase of $15.7 billion from FY2022. This includes all types of small businesses grouped together, but it is quite the achievement regardless.
As usual, the next-largest grouping was small disadvantaged businesses, including those in the 8(a) Program, which received $76.2 billion, or 12.1% of all federal contracting dollars, just barely squeaking past its goal of 12%.
Next up was service-disabled veteran owned small businesses (SDVOSB), which also exceeded its 3% goal for the year with $31.9 billion, or 5.07% of all federal contracting dollars.
In 2023, the goal for women owned small businesses (WOSB) once again was missed (this has been a recurring theme on these scorecards), but it came much closer to reaching its goal of 5% coming in at 4.91% of all federal contracting dollars, or $30.9 billion. Maybe 2024 will finally be the year that agencies finally give WOSBs the business needed to meet the goal? It has now been over a decade since the WOSB goal was met. Come on, agencies! You can do this!
The HUBZone goal was missed, but it did improve over the previous fiscal year. The HUBZone goal is set at 3%. Agencies awarded 2.78% of overall contracting dollars to HUBZone small businesses, or $17.5 billion.
In another bit of bad news, the total number of small business prime contractors decreased again. It went from 62,670 in 2022 down to 61,298 in 2023. That has been a worrying trend for years, despite attempts to bring more small businesses into the fold.
Overall, 2023 was a very strong year for individual agency performance. While 2022’s lowest scoring agency was the Department of Veterans Affairs with an overall score of 79.88%, 2023’s lowest scoring agency was the Department of Health and Human Services which came in at 97.95%. Not only that, but there was also only one other agency that received a score lower than 100% and that was the Environmental Protection Agency with a score of 98.37%. The highest agency score for 2023 goes to the Department of Commerce reaching 143.48% of its small business contracting goal. Nice going, Department of Commerce!
All in all, ten agencies received what is considered an A+, meaning they achieved 120% or more of their goal. An additional 12 agencies received an A, which is defined as meeting 100% to 119% of their goal. And finally, the two that received a B, the Environmental Protection Agency and the Department of Health and Human Services, missed their goals by a small margin. Will 2024 be the year for straight A’s? Only time will tell.
To learn more, see the scorecard in full here, and the agency specific numbers here.
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