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SBA's Administrator Isabel Guzmán.
SBA’s Administrator, Isabel Guzmán, highlights the government's efforts. Photo: @SBAIsabel.

Historic record of more than $150 billion in small business contracting

The Biden-Harris Administration exceeded its federal contracting goal for small businesses.

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The Small Business Administration (SBA) recently announced that the Biden-Harris Administration exceeded its federal contracting goal for small businesses, awarding 27.2% of these contracts and allocating $154.2 billion for this mission.

This represents an increase of $8 billion from the previous fiscal year, a figure by which the federal government exceeded its target of 23% prime contract dollars, and earned an "A" this year’s government-wide Scorecard. 

Additionally, 11 federal agencies earned an "A+" for their agencies' achievements in contracting with small businesses, and an additional 10 agencies received an "A" grade.

Contracting Records

The SBA has specific contracting goals for each agency, and works with government buyers to ensure they prioritize small businesses. Combined with $72 billion in subprime mortgage contracting targets, this historic spending has supported more than 1 million jobs in the U.S. economy.

“The Biden-Harris Administration set historic records in small business contracting, including the highest percentage spend to Small Disadvantaged Businesses and growth for our Service-disabled Veteran Small Businesses, which has advanced competition, strengthened local economies, and supported job growth across the nation,” stated Guzmán.

Outstanding Grades

These are the most important milestones in the midst of this valuable support for America's small business owners, especially those who are part of diverse communities:

  • Small Disadvantaged Business (SDB) spending reached 11% for the first time in history. This made it possible to achieve the increase promised by the President, in terms of SDB hiring, one year ahead of schedule.
  • Spending on service-disabled Veteran-owned small businesses reached 4.4% out of a 3% goal, representing $25 billion in acquisitions and a significant $1 billion spending increase over the prior year.
  • Historically Underutilized Business Zone (HUBZone) received a historic $14.3 billion in federal contract awards. Although the federal government has never reached the legal goal of 3%, the number provided by the Biden Administration represents the highest amount awarded to HUBZone businesses in the history of the program.
  • Women-owned Small Businesses (WOSBs) received more than $26 billion for the third year in a row, translating to 4.6% of total FY21 eligible dollars. The SBA is actively working with contracting agencies to make future progress toward achieving the WOSB goal. Now, more than 92% of federal spending is covered by NAICS codes eligible for WOSB reserve awards.
  • The federal government achieved its small business outsourcing goals, providing 30.9%, or $72 billion, for this purpose. Women-owned small business subcontractors received 5.2% of subcontracts, or $12.2 billion, exceeding WOSB's subcontracting target of 5%.

“By expanding small business opportunities and building equity in federal procurement, we have helped to ensure that federal agencies can fully leverage the extraordinary talent and innovation delivered by our nation’s entrepreneurs. Building on the major procurement reforms announced last year; the SBA will continue to further progress in all federal procurement goals so more entrepreneurs can grow their businesses with government contracts, including those presented by President Biden’s Infrastructure Investment and Jobs Act,” noted Guzmán.

It is important to note that despite the overall increase in the dollar value of small business awards, the absolute number of small businesses receiving prime contracts with the federal government decreased again in FY21.

This multi-year trend in the decline of small business providers, dating back more than a decade, looks to be reversed for the next period. In December, the government issued a policy memorandum aimed at breaking this trend, especially by tracking new entrants to ensure that new government contractors enter and then find opportunities in the federal market.

Reactions

“Small businesses know how to get the job done, and they have a key role to play in delivering the generational infrastructure investment underway through the Bipartisan Infrastructure Law,” said U.S. Transportation Secretary Pete Buttigieg. “We know that it hasn’t been easy for small businesses – particularly those owned by women and people of color – to reap the benefits of past infrastructure investments, and we’re proud of the actions this Administration is taking to level the playing field, remove barriers to opportunities, and increase access to wealth creation for small businesses across America.”

“The Department of Homeland Security (DHS) is honored to receive an A+ for the sixth year in a row – the largest federal agency to have such a record - for the accomplishments of our acquisition professionals in maximizing opportunities for small businesses,” said Homeland Secretary Alejandro N. Mayorkas. “Last year alone, DHS obligated $8 billion to American small businesses working to support the homeland security mission. DHS will continue to lead in small business contracting by focusing on small business outreach and engagement as we support diversity, equity, and inclusion.”

“At NASA, we work to explore the secrets of the universe for the benefit of all, and a big part of that is how we improve life on Earth through innovation – including technology, medicine, and access to space,” said NASA Administrator Bill Nelson. “Our relationships with small businesses help NASA stay on the cutting edge of innovation while allowing us to achieve our small business prime contracting goal to make investments in this country’s future. We will continue to work to identify the barriers to access for small businesses and find ways to create more favorable, equitable procurement practices to help establish the future of space exploration, scientific discovery, and aeronautics research.”

“Small businesses play a vital role in the American economy, and they are essential to the mission of the Department of Defense (DoD), enabling us to develop, deliver and sustain critical capabilities to our Warfighter. DoD achieved our small business prime contracting goal for eight consecutive years. This shows our commitment to maximize opportunities for small businesses, which increases competition and strengthens our national and economic security,” said DOD Undersecretary William LaPlante.

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