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26% of Federal Contracts in FY 2020 Went to Small Businesses

The U.S. Small Business Administration announced recently that the federal government exceeded its small business federal contracting goal, awarding 26.01 percent or $145.7 billion in federal contract dollars to small businesses, a $13 billion increase from the previous fiscal year. 

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“Despite the fact that it’s been an extremely challenging year for small businesses, the SBA is proud to announce that our nation’s entrepreneurs used their trademark ingenuity, grit, and determination to do a record amount of contracts — $145.7 billion — with the federal government. Thanks to the support of countless dedicated government professionals, the federal government exceeded its small business contracting goal for FY20 with a $13 billion increase from the previous fiscal year,” said SBA Administrator Isabel Guzman.

“However, we know that there’s much more to do to ensure all of our small businesses can get contract-ready and have the opportunities they need to engage with the world’s largest customer. We’re committed to increasing these opportunities and lowering barriers to give our small businesses a chance to grow their revenues through contracting. Our goal this year, and every year, is to make sure that small businesses can be like the giants they are in our economy and to create conditions to guarantee their success,” continued Administrator Guzman.

The federal government also added almost a million jobs to the American economy through the $145.7 billion in prime contract dollars and $82.8 billion in subcontracts awarded to small businesses.  Overall, the federal government exceeded its goal of 23 percent in prime contract dollars and earned an “A” on this year’s government-wide Scorecard.   Eight federal agencies earned an “A+” for their agencies’ achievements in small-business contracting.

At the same time, the Biden-Harris Administration recognizes there is much work to be done to advance equity in federal procurement. President Biden’s Day 1 Executive Order on Advancing Racial Equity and Support for Underserved Communities instructs agencies to ensure that federal contracting and procurement opportunities be made more readily available to all eligible vendors and to remove barriers faced by underserved individuals and communities. In his June 2021 speech in Tulsa, Oklahoma commemorating the centennial of the Tulsa Race Massacre, President Biden announced a goal of increasing the share of contracts awarded to small disadvantaged businesses by 50 percent over five years.

FY2020 Small Business Federal Procurement Scorecard:

The individual agency scorecards released today by the SBA, as well as a detailed explanation of the methodology, is available at SBA.gov. Highlights from the overall Federal Procurement Scorecard are:

  • In FY20, the federal government exceeded the service-disabled veteran-owned small business and small disadvantaged business goals of 3 percent and 5 percent, respectively.
  • Although dollars awards increased to new records from previous years in all small business categories, the federal government fell short of meeting the goals established by Congress for women-owned small businesses and HUBZone small businesses. The government spent over $27 billion with women-owned small businesses and over $13 billion with HUBZone businesses, figures that both exceeded the prior year’s spending by over $1 billion.
  • The federal government also exceeded its subcontract goals for awards to small businesses and women-owned small businesses. In all, the government awarded almost $83 billion in subcontracts to all small businesses.  
  • Despite the overall increase in the value of small-business awards, the number of small businesses receiving prime contracts with the Federal government decreased.

*The prime contract goal achievements by dollars and percentages for all categories are as follows:

CategoryGoal2016
$(B)
2016
%SB
2017
$(B)
2017
%SB
2018
$(B)
2018
%SB
2019(1)
$(B)
2019(1)
%SB
2020(1)
$(B)
2020(1)
%SB
Small Business23%$99.7024.40%$105.7023.80%$120.8025.05%$132.9026.50%$145.6626.01%
Small Disadvantaged Business5%$39.109.40%$40.209.10%$46.509.65%$51.6010.29%$59.0210.54%
Service- Disabled Veteran Owned Small Business3%$16.304.00%$17.904.10%$20.604.27%$22.004.39%$23.944.28%
Women Owned Small Business5%$19.704.80%$20.804.70%$22.904.75%$26.005.19%$27.144.85%
HUBZone3%$6.901.70%$7.301.70%$9.902.05%$11.402.28%$13.642.44%

1. For FY20, in accordance with federal law, SBA  provided double credit, for scorecard purposes only, for prime contract awards in disaster areas that are awarded as a local area set aside and a small business or other socioeconomic set aside when the vendor state is the same as the place of performance (15 USC § 644(f)), for Puerto Rico and covered territories awards (15 USC § 644(x)(1)). SBA included in the calculation of FY20 government-wide achievements the Department of Energy first-tier subcontracts required to be included by section 318 of the Consolidated Appropriations Act of 2014 (“CAA”), Public Law 113-76.

SBA continues to collaborate with federal agencies to expand small business opportunities for small business contractors to compete and win federal contracts. The FY2020 Scorecard analyzed the prime contracting and subcontracting performance and other contributing factors, which resulted in an overall “A” grade for the federal government. Eight agencies received A+, 11 received a grade of “A”, and three received a “B” grade. Under the Biden-Harris Administration, the SBA will continue to examine and expand upon its SBD contracting goals, in line with the President’s commitment to equity.

Small Business Federal Procurement Scorecard Overview:

The annual Procurement Scorecard is an assessment tool to (1) measure how well federal agencies reach their small business and socio-economic prime contracting and subcontracting goals; (2) provide accurate and transparent contracting data and (3) report agency-specific progress.  The prime and subcontracting component goals include goals for small businesses, small businesses owned by women, small disadvantaged businesses, service-disabled veteran-owned small businesses, and small businesses located in Historically Underutilized Business Zones (HUBZones).

Every year, the SBA works with each agency to set their prime and subcontracting goals, and their performance is based on the agreed-upon goals.  Each federal agency has a different small business contracting goal determined annually in consultation with the SBA.  The SBA ensures that in the aggregate, the federal government meets or exceeds the government-wide statutory goals mandated in 15(g)(1) of the Small Business Act in each small business category.

While each federal agency is responsible for ensuring the quality of its own contracting data, SBA conducts additional analyses to help agencies identify potential data anomalies.  As part of its ongoing data quality efforts, the SBA works with federal agency procurement staff to provide analysis and tools to facilitate a review of data, implement improvements to procurement systems, and conduct training to improve accuracy.

For reporting purposes: FY20 and the accompanying Scorecard data covers the period between October 1, 2019 through September 30, 2020.

The Georgia Virtue
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