Small Business Awards Scale Greatest Heights in ‘21

If you run a small business and you’re ready for some good financial news, just continue reading.
Now that I have your attention, here it is: Federal agencies reached a new high water mark ― and made history in the process ― in fiscal 2021 in awarding total prime contract dollars to small businesses. Now couple that news with the Small Business Administration reporting that not only did agencies surpass the government-wide goal of 23 percent, but it increased total spending with small firms by $8 billion.
By the numbers, the federal government spent $154.2 billion, or 27.23 percent of all prime contracts, with small businesses last year. That led to the SBA, on its annual small business scorecard, awarding 21 agencies an A or A+ grade for those efforts; though that number is actually down from 22 agencies the previous year when agencies awarded more than $133 billion to small firms. That equated to 26.5 percent of all prime contracts.
Still, making these feats even more impressive is that those heights were reached despite the nation’s shrinking small business industrial base, which has decreased by 40 percent since 2012, with the number of new entrants into the federal market down by a whopping 60 percent during that span.
Most of the above good news comes after reforms that we announced last year by the White House and the Office of Management and Budget. Since there have been some significant changes to strategic sourcing. The upswing has come after the release of disaggregated data and tracking of new entrants to the market.

Agency small business contracting success in 2021 extends not to just small businesses in general but, as SBA Administrator Isabella Casillas Guzman has pointed out, every socioeconomic category as they reached new highs.
According to the SBA, agencies awarded 11 percent of all prime contracts worth $62.4 billion to small, disadvantaged businesses. This accomplishment met the Biden administration’s first goal of increasing the percentage of contracts going to SDBs to 11 percent by 2022. The next goal is to increase the SDB’s share to 15 percent by 2025.
Also, for the first time, agencies surpassed the government-wide goal of awarding three percent of all contracts to service-disabled veteran-owned small businesses. SBA says SDVSBs received 4.41 percent of all prime contracts, which equals more than $25 billion.
Next, various federal officials said they are addressing that noted dwindling small business industrial base. On that note, the Department of Defense, which exceeded its small business contracting goal for the eighth consecutive year, will soon issue its new small business strategy.

Set aside issues

In another effort to increase government contracting opportunities for small businesses, an SBA team of federal government contracting experts is railing against contract bundling and category management initiatives that have led to ineligible firms winning contracts.
The Office of Government Contracting and Business Development has presented a series of reforms to ensure contracting opportunities are reaching small businesses after reports indicated small and minority organizations were disproportionately falling out of the shrinking vendor base compared to larger firms. 
Those reforms include performance-based incentives for contracting officers set up to attract small businesses that came after last year’s White House memorandum that also directed the government to increase the share of contracts garnered to small, disadvantaged businesses to 15 percent by 2025.
To prevent ineligible organizations from obtaining set-asides for small businesses, the office conducted a review in fiscal 2021 and identified 66 companies that were not qualified to receive the contracting opportunities they had been awarded.
What happened next? Those reviews led to the redirecting of more than $5 billion in contracts to legitimate small businesses, according to Bibi Hidalgo, associate administrator for the Office of Government Contracting & Business Development.

Gloria Larkin is President and CEO of TargetGov, and a national expert in business development in the government markets. Email, visit or call toll-free 1-866-579-1346 x 325 for more information.

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