WHAT THE FEDERAL SMALL BUSINESS NUMBERS TELL YOU – AND WHAT THEY DON’T
Federal government use of small businesses continues to increase with 2019 marking the seventh straight year that agencies exceeded small business contracting goals. Nearly $133 billion in contract dollars were obligated to small firms in FY’19, an increase of $12 billion from FY’18. That’s good enough to beat the 23% small business contract goal by 3.5%. While there are many reasons why small business use numbers continue to increase, one is the speed and ease of use small business acquisitions offer to over-worked acquisition professionals. This can be especially important at this time of year when there are many procurement actions to be taken in a limited amount of time. Over 10.25% of small business dollars, for example, went to disadvantaged businesses last year, an area where streamlined acquisition methods predominate.
These numbers, however, don’t tell the entire story. There are definitely winners and losers in the small business contracting arena. Previous news stories have stated that thousands of small businesses leave the government market each year, likely due to new and costly rules. This year alone small business prime contractors are having to accommodate Cyber Maturity Model Certification (CMMC) requirements and review IT and telecommunications assets to ensure that prohibited sources aren’t used. This may be one reason why the newly-released small business subcontracting numbers show an uneven story. Only the overall goal and the women-owned subcontracting goal were met. New requirements continue to impact smaller small businesses, while larger small firms, especially those dedicated to federal business, are better able to absorb the costs.