If you follow this website, you know that I have been consistently critical of the government as it pertains to small business contracting. No this isn’t something that began under the Trump administration, but rather has been going on since Supplierty News was Global Diversity News (circa 2016). My issue with the government is how it awards and counts business that it describes as “small”. NAICS codes not withstanding, many large business are able to utilize smaller businesses / subsidiaries in alot of cases to win contracts that should otherwise be going to small suppliers. In addition, as one person commented the government uses “a grab bag approach and use(s) one company that has multiple designation to represent a false 1-1 ratio when scoring their goal achievements.”
Last month it was reported that the government received an “A” in its “annual scorecard measuring prime contracts to small businesses owned by women, small disadvantaged businesses, service-disabled veteran-owned small businesses, and small businesses located in Historically Underutilized Business Zones.” This was the first time the government received an overall A but, with my prior criticisms, I cannot give this much credence.
According to Washington Technology, during “fiscal year 2017, [government] agencies bought $105.7 billion in goods and services from small businesses, which captured 23.9 percent of prime contract dollars. That proportion was slightly below fiscal 2016 when they captured 24.34 percent.” Despite the lower percentage, this is the first time the government has spent more than $100 billion with small firms.
When breaking down the number by government agencies, the “Small Business Administration gave “A” grades to 20 agencies. Nine of those got an “A-plus” and 11 with an “A” grade. Two agencies received a “B” grade and one received “a” C grade — the U.S. Agency for International Development.”
In terms of classifications / categories;
- Women-owned small businesses have a goal of 5 percent but the government only spent 4.71 percent or $20.8 billion with these businesses, a decrease in percentage from 2016.
- Historically Underutilized Business Zone companies won just 1.65 percent, or $7.3 billion, against the 3 percent goal, a slight drop from 2016
- Small disadvantaged businesses won 9.1 percent of the prime contracts, worth $40.2 billion in fiscal 2017 against a 5 percent goal, a drop from 2016
- Service-disabled, veteran-owned small businesses won 4.05 percent of prime contract dollars or $17.9 billion against a 3 percent goal, an increase from 2016
- The overall subcontracting goal of 31.95 percent was not achieved. Small businesses won 31.4 percent of subcontract dollars.