Federal agencies set small business contracting record even as opportunities decrease

The federal government exceeded its small business contracting goals in fiscal 2022 and awarded a record-breaking 26.5% of federal contracting dollars to smaller companies, White House officals said on Tuesday.

Despite the increase in federal dollars spent on small business contracts, the marketplace saw its nearly decade-long decline continue in the number of small businesses receiving prime contracts. Women-owned small businesses received over $26 billion in fiscal 2022 total eligible dollars, but the administration fell short of its goal to award 5% of all federal dollars to those companies.

The government also did not meet its goal of 3% of set-aside contracts for historically underutilized business zone small businesses, or HUBZone.

The Small Business Administration gave the federal government an overall “A” rating in its annual small business procurement scorecard. SBA also said that the record-level contracting opportunities amounted to more than $162 billion in federal dollars for small businesses nationwide.

SBA Administrator Isabella Casillas Guzman said in a statement on Tuesday that the federal investments in small businesses help support “over one million good-paying jobs in manufacturing, construction, research and development and other vital industries.”

The federal government exceeded its contracting goals for small disadvantaged businesses and service-disabled veteran-owned small businesses, according to the announcement, and met its small business subcontracting goals by awarding nearly $80 billion in that category.

The latest procurement scorecard comes amid a push by the White House to expand federal contracting opportunities for small and minority-owned businesses, including small disadvantaged businesses. 

The White House increased federal contracting goals for SDBs last year after awarding a record $62.4 billion to Black-owned, Latino-owned and other minority-owned businesses in 2021. 

Experts previously told Nextgov/FCW that SDBs and other small businesses face a variety of institutional challenges when competing for federal contracting opportunities, from fraud and misuse, to larger corporations using marginalized firms for "pass-through" work, which is when big businesses abuse mentor-protégé programs to secure federal spending.