Small Business: IT Contracting Trends and Issues

Published: May 18, 2023

FeaturedFederal Market AnalysisAcquisition ReformInformation TechnologyPolicy and LegislationSmall Business

Deltek's Small Business: IT Contracting Trends and Issues examines the trends, challenges, and initiatives impacting the small business federal IT contracting environment.

Increasing small business opportunity within the federal contracting market is a major Biden Administration priority, spurring efforts to lower barriers to entry and create opportunities for all socioeconomic small businesses. Federal initiatives to increase small business utilization continue to ramp up, as agencies develop strategies to meet White House small business equity targets.

Efforts to improve the ability of small businesses to compete, attract and retain small businesses to the market, and increase the share of contract dollars awarded to small disadvantaged businesses (SDBs) all contribute to a dynamic environment for small businesses to navigate.

Deltek’s Small Business: IT Contracting Trends and Issues examines the trends, challenges, and initiatives that are impacting small business utilization within the federal IT contracting environment.

Key Findings

  • Shrinking Industrial Base. Small business IT spending is increasing, however the declining number of small business participants continues to drive scrutiny of contributing factors such as inflation, contract financing, compliance costs and competition.
  • Diversifying Options. Small businesses are diversifying their set-aside options through multiple certifications. Many small business IT contractors have had more success winning set-asides other than those associated with their primary socioeconomic group.
  • Concentrated IT Spending. Agencies are under additional pressure to expand overall small business opportunities, however most agency small business IT spending is concentrated within five contract vehicles (including SEWP IV, GSA MAS and CIO-SP3 Small Business), making positioning on Best-in-Class contract vehicles especially critical for small IT vendors.
  • Equity Action Plans. Agency equity action plans and SBA 8(a) program initiatives ramping up in 2023 are designed to attract new entrants, which will increase competition.
  • Category Management Challenges. Category management continues to challenge small business participation, spurring GSA’s IT category leadership to continue to assess the impact on small business opportunities.
  • DOD Small Business Focus. DOD small business IT lags behind civilian agencies. Increasing small business contract awards has become so important to the DOD that the department has waived the mandatory use of Best-in-Class (BIC) contract vehicles to make an award if a small business that does not hold a BIC contract is found to work the requirement.
  • Critical Insight for Vendors

    This report delivers a comprehensive view of trends and issues facing small businesses and federal agencies within the federal IT contracting environment. Its purpose is to augment small IT firms’ business development planning through strategic and tactical insight into the federal contracting market.

    The report provides insights into:

  • The policy and legislative environment fostering small business acquisition reform
  • Small business spending trends shaping the federal IT market
  • Agency-specific small business IT spending patterns and preferences
  • Deltek's Small Business: IT Contracting Trends and Issues report is delivered in PowerPoint® format, including a PowerPoint® Executive Briefing, and an Excel® data workbook.

    Small Business: IT Contracting Trends and Issues

    Table of Contents


    Small Business Contracting Environment

  • Small Business Challenges: Inflation, Supply Chain, Interest Rates, etc.
  • Initiatives to Increase SB Participation: White House, OMB and agency policies to increase SB participation.
  • Small Business IT Spending Environment

  • FY 2024 IT Budget Request
  • Total Small Business Prime IT Spending
  • IT Set-Aside Spending
  • 8(a) Program Participation
  • Preferred IT Contract Vehicles
  • Small Business IT Spending by Contract Type
  • Small Business Spending by Technology Priorities
  • SBIR/STTR Awards
  • Agency Small Business IT Dashboards

    Top 10 Agency Spenders

  • Army
  • Defense Agencies
  • Navy
  • Air Force
  • Health and Human Services
  • Homeland Security
  • Veterans Affairs
  • Treasury
  • Justice
  • State
  • Conclusions and Recommendations