NASA Reaches 5-Year High in Small Business Spending

As FY 2024 comes to a close, NASA has already reached a five-year record high in small business (SB) obligations, positioning the agency to exceed this year’s overall 16.9% small business utilization goal. However, the distribution among the four SBA-tracked socio-economic goals needs improvement.

This article provides an in-depth analysis of NASA’s SB spending trends since FY 2019. Data for FY 2024 represents spending through Q3 only.

Contract Performance

Overall SB spending remained relatively flat from FY 2019 to 2023, but the agency consistently exceeded its goals. By the end of FY 2024 Q3, the agency had already awarded 16.3% ($4.4B) of prime contracting dollars to SB firms, $734M (20%) above FY 2023. The typical end-of-year spending surge and the anticipated $75M Aerospace Research Technology and Simulation (ARTS) contract award in mid-September will likely drive the final FY 2024 over the agency’s total SB goal once again. 

 

 

 

 

 

 

 

 

 

 

 

 

 

During the past five years, the agency awarded 28% ($6B) to SB firms in the four SBA-tracked socio-economic categories. Of these 4% were Sole Source awards.

While NASA’s overall SB performance has consistently exceeded goals, spending among the socio-economic categories shows room for improvement. Contract spending among HUBZone Firms remains well below the mark, achieving only 1% of its 3% goal and accounts for only 1% of total small business spending. This provides potential opportunities for HUBZone firms to pursue upcoming contracts as a sole provider or as lead provider through joint venture. Firms certified under the 8(a) program remain the most widely utilized set-aside group, representing $4.8B. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NASA awarded $21B to small businesses for Research & Development, Information Technology, Professional Services, Defense and Aerospace and Architecture, Engineering and Construction work. Of this, 20% of the obligations were in Maryland, home of the Godard Space Flight Center’s (GSFC) Electrical Engineering Systems Services (ESES III). Although this contract is winding down toward an extended December 2024 expiration, it was the highest funded over this period. The follow-on procurement remains in Source Selection status following a bid protest.

Subcontracting Performance

Agency subcontract awards continue a steadily increasing trend to $6B in FY 2023. Fiscal Year 2024 data is unavailable. Again, HUBZone utilization remains significantly below the remaining groups while WOSBs are only slightly higher than 8(a) awards.

 

 

 

 

 

 

 

 

 

 

 

 

 

So, does having a small business certification pay off? An analysis of how NASA distributed awards among the socio-economic categories revealed an interesting twist. Small businesses certified as 8(a), HUBZone and SDVOB firms received more awards and overall higher award dollars through SB set-asides versus unrestricted procurements. WOSBs received fewer awards under set-aside competitions (447) than under full and open competitions (341). However, the contract values for the set-aside awards were greater ($77M) than those awarded through unrestricted procurements ($15M). 

 

 

 

 

Contractor Implications

With NASA’s ongoing history of being a proponent of small businesses, firms certified under socio-economic categories can expect continued set-aside opportunities for contracts and subcontracts, especially for HUBZone and SDVOSB firms. Although the agency budget is expected to remain flat in FY 2025, the NASA’s agency forecasts projects billions of dollars in upcoming awards including detailed information on socio-economic preferences, value and estimated solicitation dates. Additionally, NASA’s Office of Small Business Programs hosts regular events that provide a venue for meeting SB program managers and networking opportunities with other firms. And don’t forget to track upcoming opportunities through Deltek’s GovWin solution.