Fiscal year 2008 was a banner year for small business procurement, as the federal government set a new record for prime contracts to smaller firms. According to the U.S. Small Business Administration's (SBA's) recently released third annual small business procurement scorecard, the sector won a total of $93.3 billion in contracts during the period, which ran from October 1, 2007 to September 30, 2008, marking an almost $10 billion jump from the prior year's figures.
Still, the record-breaking numbers have elicited muted celebration at best.
"This record $93.3 billion in contracts to small businesses is significant, however, across the federal government we are committed to ensuring that the 23% goal is met and even exceeded going forward," said SBA Administrator Karen Mills. "Especially during these tough economic times, federal contracts for small businesses can be just the opportunity they need to continue to grow and create jobs. At the same time, the federal government gets access to some of the most innovative and best products and services." Despite the broken record and the major increase in the contracting dollars reaching small businesses, the federal government as a whole still fell short of its statutory goal of 23% of all contracting dollars reserved for smaller firms. As much money as $93.3 billion is, it only amounts to 21.5% of all federal contracting dollars spent in FY2008.
Some agencies are more to blame than others. The SBA's scorecard grades on the completion of five different contracting goals for federal agencies, and for a five-out-of-five rating an agency needs to spend a certain percentage of its contracting dollars on certain specific sectors: 23% on small businesses as a whole, 5% on small disadvantaged businesses, 5% on women-owned businesses, 3% on service-disabled veteran-owned businesses and 3% on small businesses in HUBZones (historically underutilized business zones). Only one agency, the General Services Administration (GSA), met or surpassed all five goals, while large agencies like the Department of Defense (DOD), the Department of Justice (DOJ), the Social Security Administration (SSA) and the State Department met or surpassed only one of the five goals. Two agencies, the Office of Personnel Management (OPM) and the U.S. Agency for International Development (USAID), managed to meet none of the five goals.
"President Obama has made a commitment to ensuring that small businesses have greater access to federal contracting opportunities and it is a commitment shared across this Administration," said Mills. "We have already begun taking aggressive steps to connect small businesses with contracting opportunities, as well as increase our outreach to federal agency procurement officers to make sure they get the information and tools they need to help them connect with these good, innovative small companies."
In addition to being below the statutory limit, questions have been raised about whether or not the money included in the SBA's figures even went to small businesses at all, potentially flowing instead to much larger firms. "According to information from the Federal Procurement Data System - Next Generation (FPDS-NG), of the 10 largest recipients of federal small business contracts, 85.4% of the contracts went to large businesses," said the American Small Business League (ASBL) in a response to the figures. "Eight of the top 10 recipients of small business contracts were large businesses."
The ASBL has long criticized the White House, both former President George Bush Jr.'s and current president Barack Obama's, for its inaction on the issue of large companies getting small business contracts. According to the association, the top recipient of federal small business contracts in FY2008 was Textron, a Fortune 500 firm with 83,000 employees and over $25 billion in annual revenue that allegedly received $775.7 million in small business money during the period.
Other firms that the ASBL claims were included in the SBA's $93.3 billion figure were Lockheed Martin, Boeing, General Electric, Booz Allen Hamilton and Northrup Grumman.
Jacob Barron, NACM staff writer