Earning federal contracts is a powerful tool to help small companies grow their business. To help make sure that small businesses have a seat at the table, the Small Business Act sets prime contracting goals for small businesses (along with each socio-economic category). 15 U.S.C. § 644(g). And each year, the SBA issues a scorecard grading the government’s compliance with those goals.
Just a couple days ago, the SBA released its scorecard for the 2018 fiscal year. All told, the scorecard paints a rosy picture of small business contracting.
Let’s take a look.
The overall headline from the fiscal year 2018 scorecard will, no doubt, be the astonishing dollar value of prime contracts awarded to small businesses: in 2018, the federal government awarded $120.8 billion in prime contracts to small businesses (up from $105.7 billion in 2017). That’s an incredible number—in fact, it marks the first time the government has awarded more than $120 billion in prime contracts to small businesses. What’s more, the federal government exceeded its 23% small business prime contracting goal by awarding 25.05% of its prime contracts to small businesses.
Other socio-economic categories saw an upward trend of small business awards:
- 8(a) participants received 9.65% of the prime contract awards, for a total dollar value of $46.5 billion. This is an increase from 2017, when 8(a) participants received 9.1% of awards (for $40.2 billion).
- SDVOSBs earned 4.27% of the prime contracts, totaling $20.6 billion (up from 4.05% and $17.9 billion, respectively, in 2017).
- WOSBs earned 4.75% of the prime contracts, totaling $22.9 billion (slightly increasing the government’s 2017 performance).
- HUBZone companies were awarded 2.05% of the prime contracts, totaling just shy of $10 billion.
Overall, these top-line numbers are very positive for small businesses. But work still needs to be done: as my colleague Shane has recently written, the overall number of small business federal contractors appears to be on the decline, potentially due in part to consolidated awards. “In other words,” Shane wrote, “fewer small businesses are receiving the benefit ” of these awards.
Even more problematically, the federal government has yet again fallen short of its WOSB (5%) and HUBZone (3%) goals. In my opinion, the government’s continuing failure to meet its HUBZone goal is particularly concerning—after all, the program’s aim is to help provide economic development in underdeveloped communities, so one would think that the federal government would do more to prioritize awards to these firms. Hopefully the SBA’s proposed amendments to the HUBZone regulations will make it easier for the government to do so.
Impressive as they are, these statistics only represent the federal government’s overall compliance. I’ll be interested to do a deeper dive into the SBA’s agency-specific scorecards to see how each individual agency works with small businesses. But as these numbers show, working with the federal government can be very rewarding for small businesses.
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