MA

Government-wide Small Business Contracting Drops, Achieves Overall Target

Published: May 03, 2016

Acquisition ReformForecasts and SpendingSmall Business

At the end of April 2016, the Small Business Administration (SBA) released the federal scorecards for agency performance against FY 2015 small business contracting goals. Hitting the government-wide target, overall levels increased from 25.02% of eligible dollars in FY 2014 to 25.81% in FY 2015, but the actual dollars associated with those percentages show a decrease in the amount of spending small businesses received.

The methodology for assessing agency performance against their small business goals has been subject to criticism due to its reliance on prime contracts, the exclusion of certain types of contracts (e.g. leasing contracts or those for goods sold overseas), and the omission of entire agencies from the process (e.g. Federal Aviation Administration, Transportation Security Administration, Central Intelligence Agency). In previous years, calculations completed without the SBA’s exclusions have shown small business contracting at a notably lower level. The Office of Federal Procurement Policy has been working with the SBA to remove as many of these problematic exclusions as possible.

Even so, looking back on the shifts in overall eligible funds provides valuable context for the “A” grade issued on the government-wide scorecard. It’s worth noting that the scorecards rated agencies against prime contracting data from February 20, 2016 and subcontracting data from March 14, 2016. The chart below incorporates prime contracting data reported through the Small Business Dashboard as of May 03, 2016. Since reported spending data is not static, this difference in timing is likely to result in some variance in reported figures. Sure enough, the government-wide scorecard reflects $90.7 billion in small business contract spending while more recently pulled figures put that level at $91.2 billion.

 

This levels awarded to small businesses have achieved the established targets for the third year in a row and the share small business awards comprise of eligible contracts has grown steadily. At the same time, eligible funds declined by 3.8% and FY 2015 actual spending dropped more than three-quarters of a billion dollars from FY 2014. The measures for small businesses across different socio-economic categories illustrate how meager changes in actual dollars can produce greater swings in percentage as the total level drops. To be sure, agencies have been making progress towards their small business targets, but looking at the bigger picture highlights where there’s still room for improvement.