Federal Government Exceeds Small Business Goals
The U.S. Small Business Administration (“SBA”) announced the federal government exceeded its small business federal contracting goal for FY2021, awarding $154.2 Billion or 27.2% of federal contract dollars to small businesses, an $8 Billion increase from the previous fiscal year.
The federal government exceeded its goal of 23.0% in prime contract dollars awarded to small businesses, which supported over one million jobs in the American economy. The SBA sets contracting goals for each federal agency and works with government buyers to ensure that they prioritize small businesses.
Awards for Small Disadvantaged Businesses (“SBD”) was more than double the goal amount, and Service-Disabled Veteran-Owned Small Businesses (“SDVOSB”) also exceeded their award goal for FY2021. Awards issued to Women-Owned Small Businesses (“WOSB”) and Historically Underutilized Business Zone (“HUBZone”) businesses were below their SBA goals.
By promoting diversity, equity, inclusion, and accessibility, the SBA hopes to help more small businesses realize their entrepreneurial dreams while growing the U.S. industrial base. SDB’s reached the 11.0% of federal spending, well ahead of the 5.0% goal. In addition, spending with SDVOSB’s reached 4.4%, which is above of its 3.0% goal.
While HUBZone small businesses failed to reach their 3.0% goal, the program did achieve its highest level of awards to date. WOSB was also failed to exceed its 5.0% goal, achieving just below with 4.6% of federal spending.
The SBA is actively working with contracting agencies to make future progress toward achieving the HUBZone and WOSB goals. For example, the SBA requires WOSB to be third-party certified and has increased the number of SBA certified firms from approximately 1,000 to approximately 6,000, as well as expanded the NAICS codes for WOSB’s to receive set-aside awards. Now over 92% of federal spending is covered under NAICS codes eligible for WOSB set-aside awards.
*The prime contract goal achievements by dollars (in $ billions) and percentages for all categories are as follows:
| Category | Goal | 2018 | %SB | 2019 | %SB | 2020 | %SB | 2021 | %SB |
| Small Business | 23% | $120.80 | 25.10% | $132.90 | 26.50% | $145.70 | 26.00% | $154.20 | 27.20% |
| SDB | 5% | $46.50 | 9.70% | $51.60 | 10.30% | $59.00 | 10.50% | $62.40 | 11.00% |
| SDVOSB | 3% | $20.60 | 4.30% | $22.00 | 4.40% | $23.90 | 4.30% | $25.00 | 4.40% |
| WOSB | 5% | $22.90 | 4.80% | $26.00 | 5.20% | $27.10 | 4.90% | $26.20 | 4.60% |
| HUBZone | 3% | $9.90 | 2.10% | $11.40 | 2.30% | $13.60 | 2.40% | $14.30 | 2.50% |
For detail on the individual agency scorecards released by the SBA see the Small Business Procurement Scorecard.
Despite the overall increase in the dollar value of small business awards, the number of small businesses receiving prime contracts with the federal government decreased again in FY2021. Since 2005 the number of new small business entrants into federal contracting has decreased by 79%, including a loss of 49,000 small businesses in the federal supplier base since 2010.
In December 2021, the government issued a policy memorandum in an attempt to reverse the decline in the small businesses participating in federal contracting, and to actively track recent entrants to ensure that new small businesses contractors are entering and then finding opportunities in the federal marketplace.
The SBA continues to collaborate with federal agencies to expand small business opportunities for contractors to compete and win federal contracts. The SBA provides oversight in federal contracting to ensure that government-wide goals for small business utilization are achieved every year.
By leveraging the federal government’s purchasing power, the SBA works with small businesses so that a fair percentage of federal spending flows through set-aside awards specifically for Certified Socio-Economic qualified small businesses.
FedBiz Access helps eligible businesses win government contracts by offering research and engagement strategy sessions, as well as marketing packages to government contractors and targeted buyers at the federal, state, and local levels.
FedBiz Access has over 21 years of experience working with companies to help them win business by ensuring their research, engagement strategy, registrations, set-aside certifications, and GSA Multiple Award Schedules are current, complete, and compliant.
