Wow! $120B in Government Contracts Awarded to Small Business in 2018, A New Record

The $500+ billion-a-year federal marketplace provides tremendous opportunities for small businesses. And the federal government goes out of its way to award the contracts to small entrepreneurs across the country. This has resulted in a banner year for 2018, with more than $120 billion in prime contracts awarded to small businesses.

For the sixth year in a row, the federal government has achieved its small business contracting goal. Not only that, more federal agencies are getting A+ ratings. This time around eight agencies attained the A+ rating in the FY2018 Small Business Federal Procurement Scorecard (PDF). And overall, the federal government earned an “A” on this year’s government-wide scorecard.

The Scorecard

The Small Business Administration (SBA) says the scorecard is an assessment tool with three primary goals. According to the SBA, the goals are:

• Measure how well federal agencies reach their small business and socio-economic prime contracting and subcontracting goals,
• Provide accurate and transparent contracting data,
• Report agency-specific progress.

The goals look to address the needs of small businesses, small businesses owned by women, small disadvantaged businesses, service-disabled veteran-owned small businesses, and small businesses located in Historically Underutilized Business Zones (HUBZones).

Why does the federal government put such an effort in ensuring small businesses are allocated a percentage of the contracts?  In the press release, Acting Administrator of the SBA, Chris Pilkerton, highlighted the importance of this support.

Pilkerton says, “Through these businesses, we strengthen the economy, and support the American workforce in the process.  For example, the federal prime and subcontract awarded to small businesses in FY18 equate to more than one million jobs created.”

Pilkerton adds, “Every contract that gets in the hands of a small business is a win-win for our nation, the entrepreneurs, their employees and the communities they support all across the country.”

Small Business Government Contracts in 2018

The sum total for the federal government as well as the socio-economic goals established by statute is 23%. This is the percentage which is allocated to small businesses.

While in the past getting a federal contract was cumbersome (which is putting it mildly), new legislative efforts have simplified the process. Two bills (H.R. 226 and H.R. 227) passed this year now make the process of going after federal contracts much easier for small business owners.

In addition to the overall record level, the service-disabled veteran-owned small business ($20.6B) and small disadvantaged business ($46.5B) goals also increased.

The contracts for women-owned businesses increased slightly from $20.8B to $20.9B from the previous year. Even though the 4.75% goal is short by a quarter percentage point of 5.0%, it is much better than the 3% of just five years ago.

Don’t Be Afraid to Go After Federal Contracts

As a small business, it is very important to not be afraid of going after federal contracts. After all, they can only say no. But the experience you gain from the process will help you next time.

The SBA has resources you can use to find contracts, bid on them, get counseling, contracting assistance, contracting guides and much more.

So good luck!

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