Small businesses make headway in government: Are you properly registered?

By Kevin P. Young, Consulting Market Analyst

There’s good news for small business federal government contractors in the recent announcement from the U.S. Small Business Administration (SBA) that the Biden-Harris Administration exceeded its small business federal contracting goal in 2021. According to the SBA, the administration awarded 27.2 percent, or $154.2 billion, in new contract dollars to small businesses – an increase of $8 billion increase from 2020.

The SBA has a goal of 23 percent to 26 percent of all System for Award Management (SAM)-registered federal procurements be targeted for small businesses – direct, via prime contractors and via procurement vehicles/channels.

Although the news is good and, despite the overall increase in the dollar value of small business awards, the absolute number of small businesses receiving prime contracts with the federal government decreased again in FY21.

This continues a multi-year trend of decreases in small business vendors, dating back over a decade. In December 2021, the government issued a policy memorandum intended to reverse the decline in the small business supplier base, in part by tracking new entrants to ensure new government contractors are entering and then finding opportunities in the federal market.

A recommitment to small business

The progress in small business awards is a result of President Biden’s recommitment to small business GovCons – specifically calling out Women-owned Small Businesses (WOSBs), Economically Disadvantaged WOSBs (EDWOSBs) and Historically Underutilized Business Zones (HUBZones).

That emphasis from the current administration clearly has paid off. According to SBA Administrator Isabella Casillas Guzman, the federal government earned an overall “A” on this year’s government-wide scorecard in small business contracting. Eleven federal agencies earned an “A+” and an additional ten agencies received an “A” grade.

“The Biden-Harris Administration set historic records in small business contracting, including the highest percentage spend to Small Disadvantaged Businesses (SDBs) and growth for our Service Disabled Veteran Owned Small Businesses (SDVOSB), which has advanced competition, strengthened local economies and supported job growth across the nation,” said Guzman.

“By expanding small business opportunities and building equity in federal procurement, we have helped to ensure agencies can fully leverage the extraordinary talent and innovation delivered by our nation’s entrepreneurs,” she continued. “Building on the major procurement reforms announced last year, the SBA will continue to further progress in all federal procurement goals so more entrepreneurs can grow their businesses with government contracts, including those presented by President Biden’s Infrastructure Investment and Jobs Act.”

Are you properly registered?

If your small business government contractor status is not correctly registered on SAM, or you are not taking full advantage of your social-economic status(es), you should make it a priority before the upcoming federal fiscal year. Start by contacting your regional SBA office and updating or correcting your online statuses.

Remember that set-aside statuses include not only the aforementioned WOSB, EDWOSB, HUBZone, SDBs, and SDVOSB but also the SBA 8(a) business development program – and, potentially, companies that are majority owned by Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, and Subcontinent Asian-Americans.

One bit of advice this author has found after 35 years in the industry: Always be 100% valid on your small business’ social-economic classifications as well as ownerships. For example, if you are registered as a WOSB, that means your company is majority owned and majority operated by a woman. I have seen too many cases of companies misrepresenting those factors – and either being “caught” by the SBA or “turned in” by a competitor. In either case, the ramifications and financial consequences are severe. 

Doing business the right way should yield many opportunities for your company over many years.

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