Small businesses saw fed dollars share shrink in 2011

Small businesses received $6.4 billion fewer contracting dollars from federal agencies in fiscal 2011 than in the previous year, leading one lawmaker to call the numbers “abysmal.”

Small businesses received $91.5 billion in prime contracts last year, or 21.65 percent of federal contracting dollars. By contrast in fiscal 2010 they received $97.9 billion, or 22.7 percent of government dollars.

The annual governmentwide goal is 23 percent.

The Small Business Administration gave the government an overall grade of B, or 96.16 percent, for its efforts last year. A grade of A is for exceeding the set goal. A B is for achieving 90 percent to 99 percent.

Of the government’s four small-business segments, agencies failed to meet the goals for three:

Women-owned small companies received $16.8 billion last year, or 3.98 percent. In fiscal 2010, they received 4.04 percent. The goal is 5 percent.

Companies in economically depressed regions, known as Historically Underutilized Business Zones (HUBZones), received $9.9 billion, or 2.35 percent, of federal dollars. In fiscal 2010, they received 2.77 percent. The goal is 3 percent.

Service-disabled veteran-owned small businesses received $11.2 billion, or 2.65 percent, of federal dollars. This was an increase in the amount of money awarded. In fiscal 2010, they received $10.8 billion, or 2.50 percent. Nevertheless, agencies failed to reach the 3-percent goal.

Agencies exceeded one goal – 5 percent for small, disadvantaged businesses, despite less money awarded overall. Small, disadvantaged businesses received $32.4 billion, or 7.67 percent of federal contracting dollars. In fiscal 2010, they received 7.95 percent of dollars.

The scorecard reflects the need for federal agencies to find ways to improve their small-business contracting, John Shoraka, associate administrator for government contracting and business development at SBA, wrote July 3 on the SBA blog.

He added that SBA has increased its efforts and collaboration with agencies in the last year to provide more opportunities for small business to compete for and win contracts.

“But we know more must be done to ensure that more contracts get into the hands of small businesses,” he wrote.

To help, SBA officials are putting in place 19 provisions of the Small Business Jobs Act, such as giving contracting officers more flexibility to award contracts and limiting bundled contracts.

Officials are also improving its procurement data and working with agency leaders to make small businesses a priority.

Sen. Olympia Snowe (R-Maine), ranking member of the Small Business and Entrepreneurship Committee, said the numbers were disappointing, especially in this economic climate.

“At a time when small businesses are under intense pressure to survive, let alone grow, today’s numbers demonstrate an unfortunate and abysmal regression from previous years,” she said.

Led by Rep. Sam Graves (R-Mo.), chairman of the Small Business Committee, the House has a number of small-business contracting provisions in its fiscal 2013 National Defense Authorization Act. Among other things, it would increase the contracting goal to 25 percent from 23 percent.

The Obama administration disagrees with the House’s 2-percent increase. Officials said it’s laudable but overly ambitious.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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