Government gets a B in 2010 Small-Business Contracting

The Small Business Administration gave the government a B grade for its attempts to reach small-business contracting goals, including the annual 23 percent overall goal.

The government awarded 22.7 percent of its contracting dollars to small companies in fiscal 2010, compared to 21.9 percent the previous year. It awarded $97.9 billion to small businesses in 2010, compared with $96.8 billion in 2009, a $1.1 billion increase.

The B grade means that the government met 90 percent to 99 percent of its goals for the year.

In 2010, the government improved in four of the five categories of small businesses compared to SBA’s previous score card. There were increases in contract dollars and performance against statutory goals, except in the Historically Underutilized Business Zone (HUBZone) category.

Small disadvantaged businesses received $34.4 billion, or 8 percent of contracting dollars. The government surpassed the 5 percent goal for the category, as it did in 2009.

Woman-owned small businesses received $17.5 billion, or 4 percent of contracting dollars, in 2010. It was less than a point short of the 5 percent annual goal. In 2009, such companies received 3.7 percent of contracting dollars.

Small businesses owned by service-disabled veterans received $10.8 billion, or 2.5 percent of contracting dollars. The government was 0.5 percent below the 3 percent goal for such companies, although the percentage increased from just under 2 percent in 2009.

The HUBZone small-business category was the only one to experience a decline in 2010. Such companies received $11.97 billion, or 2.77 percent of contracting dollars. The goal is 3 percent. In 2009, the government had awarded HUBZone businesses $12.41 billion, or 2.81 percent of contracting dollars.

Last year, Congress settled a disagreement among the administration, lawmakers, the U.S. Court of Federal Claims and the Government Accountability Office about whether agencies are required to offer small-business set-aside contracts to HUBZone companies first. The debate was over the word “shall” in the law. In legislation passed toward the end of the year, Congress replaced the word with “may,” clearing up any confusion about the equality of small-business categories. Read more about the debate.