Last week, Administrator Isabella Casillas Guzman announced that the Biden-Harris Administration exceeded its small business contracting goal of 23% in fiscal year (FY) 2022, awarding an all-time high 26.5% of federal contract dollars to small businesses.
This historic level amounts to a $162.9 billion investment in the small business economy – an $8.7 billion increase from the previous fiscal year. Ten federal agencies earned an “A+” for their agencies’ achievements in small business contracting, and an additional ten agencies received an “A” grade. The federal government, overall, earned an “A” on this year’s government-wide scorecard.
Ensuring Fair Competition in Federal Contracting
“Through President Biden’s Investing in America agenda, we have championed initiatives to fuel our nation’s historic economic growth while reducing barriers and ensuring fair competition in federal contracting,” said Administrator Guzman. “The Biden Administration continues to raise the bar, reaching a record high level of contract spending with small businesses, supporting over one million good-paying jobs in manufacturing, construction, research & development, and other vital industries.”
SBA plays a crucial role in setting contracting goals for each agency and collaborates closely with government buyers to emphasize the prioritization of small businesses in the procurement process. Individual agency scorecards with a detailed explanation of the methodology are available at SBA.gov.
Highlights of the overall performance of the federal government include:
- For the second consecutive year, Small Disadvantaged Business (SDB) spending exceeded its 11% goal. The noteworthy achievement reflects President Biden’s unwavering commitment to meeting an ambitious SDB contracting goal.
- Service-disabled Veteran-owned small business spending has exceeded its 3% goal, reaching 4.6%. This achievement translates to $28.1 billion in procurement, reflecting a $3 billion spending increase compared to the previous year.
- Historically Underutilized Business Zone (HUBZone) small businesses were granted a record-breaking $16.3 billion in federal contract awards, marking the highest amount ever awarded to this category in the program’s history. Despite not meeting the 3% statutory goal, the federal government made significant strides in supporting and empowering HUBZone small businesses.
- Women-owned Small Businesses (WOSB) received more than $26 billion for the fourth straight year, accounting for 4.6% of the Fiscal Year 2022 total eligible dollars, slightly below the 5% target. The overall dollars granted to WOSBs increased from $26.2 billion in Fiscal Year 2021 to $28.1 billion in Fiscal Year 2022. Moreover, the funds set aside specifically for WOSB firms amounted to $1.56 billion in Fiscal Year 2022, showing a remarkable 17% surge. This growth followed the expansion of certified WOSB firms from approximately 1,000 to nearly 6,000 and the NAICS codes in which women-owned businesses can receive set-aside awards. With over 92% of federal spending covered by NAICS codes eligible for WOSB set-aside awards, the SBA remains dedicated to collaborating with contracting agencies, actively pursuing future changes to achieve the 5% WOSB goal.
- The federal government achieved its small business subcontracting goals, awarding 30.9%, or $79.1 billion, to small business subcontractors.
- In Fiscal Year 2022, although there was a significant increase in small business awards, the number of small businesses receiving prime contracts with the federal government continued a multi-year trend of decreases in small-business vendors, spanning a decade.
Expanding Access to Federal Contracting
The Small Business Administration, under the Biden-Harris Administration, has made it a top priority to expand access to federal contracting. The SBA, under Administrator Guzman’s leadership, has made several strategic and targeted changes to ensure small businesses, particularly those in underserved communities, are empowered to find and take advantage of opportunities presented by President Biden’s signature legislation, including the historic Bipartisan Infrastructure Law, CHIPS and Science Act, and more.
Actions include:
- Releasing new guidance, “Creating a More Diverse and Resilient Federal Marketplace through Increased Participation of New and Recent Entrants.” This executive action includes several new initiatives for encouraging new entrants to the federal contracting space, including a Supplier Base Dashboard to track an agency’s mix of new entrants, recent entrants, and established vendors.
- Announcing several reforms in small business contracting, including directing all agencies to include progress toward achievement of each of the socioeconomic small business goals as evaluation criteria in all performance plans for Senior Executive Service (SES) managers that oversee the acquisition workforce or agency programs supported by contractors.
- Revising an agreement with federal agencies to promote maximum utilization of 8(a) certified SDBs to ensure equitable access to contracting opportunities.
- Updating NAICS codes eligible for WOSB set-aside contracts expanded from 444 to 759, representing a 70% increase.
- Activating ChallengeHer, a government contracting education initiative to help women-owned small business gain access to federal contracts and encourage participation in the SBA’s WOSB program alongside partners from Women Impacting Public Policy (WIPP) and American Express (AMEX).
- Creating a new HUBZone map that updates designations and census tract boundaries resulting from the 2020 Census.
- Implementing a new certification system for SDVOSBs as part of the migration of Veteran-owned business certification from the Department of Veterans Affairs (VA) to SBA.
