$162B in Small Business Contracts: SBA Releases Small Business Scorecards for FY 2022

The SBA published its annual Government Wide Small Business Procurement Scorecard for fiscal year 2022, and it appears that nearly every type of small business set-aside by the SBA, with the continued exception for Woman-Owned Small Businesses and HUBZone businesses, either met or exceeded their goal. Overall, agencies exceeded their goals for the year, earning an overall score of “A” due to meeting the small business contracting goals with 104.05% of the total goal.

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 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 $162.9 billion of federal contracting dollars directed toward small business prime contractors. This represented 26.5% of federal contracting dollars spent in 2022, whether small or other, and 69.13% of the $305.3 billion federal contracting dollars spent on small business prime contractors of all categories, and exceeded the goal of 23%. Notably, even though this exceeded the small business contracting goal of 23% set for 2022, it fell short of 2021 numbers by .73%.

The next-largest grouping was once again small disadvantaged businesses, including those in the 8(a) Program, which received $69.9 billion, or 11.38% of all federal contracting dollars, surpassing its goal of 11%.

In third place came service-disabled veteran owned small businesses (SDVOSB), which also exceeded its 3% goal for the year with $28.1 billion, or 4.57% of all federal contracting dollars.

Unfortunately, women owned small businesses (WOSB) and HUBZone businesses, in a continuing trend over the past decade, fell short of their goals. WOSB’s goal for fiscal year 2022 came in at $28.1 billion, or 4.57%, a small percentage short of its 2021 achievement, and nearly half a percentage under its 5% goal. This means that agencies, as a whole, did not reach their WOSB goal for the tenth year in a row.

Finally, HUBZone businesses, though not meeting their goal, was closer to meeting its goal than WOSBs, coming in at $16.3 billion, or 2.65% in fiscal year 2021. This is the 11th year in a row that HUBZone goals have not been achieved.

The overall number of small businesses continued to decrease as well. Small businesses that do not fit into another category, which decreased 5.85% in 2021, fell another 4.22% in 2022. The category with the largest decrease was, surprisingly, SDVOSBs, which despite their historical trend of gains, sustained a 2.52% decrease. HUBZone decreased by 2.07%, and WOSBs decreased by 2.43%. The only increase was in the small disadvantaged business category, which increased by a measly .09%.

Overall, the agency-specific score cards show that general agency performance is strong and, despite small decreases to the number of contractors in all but one category, agencies are overall performing on target with the small business contracting goals. While 2021 had increases in nearly all categories, potentially due to an economy recovering from the COVID-19 pandemic, it is possible that this is an indicator of a market coming into equilibrium after the roller coaster of an economy felt globally over the past three years. However, there are still a few outliers, both on the good side and the bad. The Department of Veterans Affairs was the lowest scoring agency, with a score of 79.88%, followed by the Department of Health and Human Services, which received a score of 87.83%. Interestingly, the worst offender in 2021 became the highest-scoring agency in 2022. The Department of Housing and Urban Development (HUD) which received a “C” in 2021, received an “A+” in 2022, with a score of 152.3%.

Taken as a whole, more agencies met their goals in the 2022 fiscal year than in 2021. More federal contracting dollars were directed towards small businesses as well, demonstrating a generally positive overall outlook.

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