The Office of Management and Budget (OMB) published a new 12% small, disadvantaged business (SDB) goal for FY’23 last week, meaning that federal agencies should try to award 12% of prime contracts to such businesses.  The new goal is 1% more than what federal agencies achieved last year, but still 3% short of the administration’s stated goal of awarding 15% of all prime business to SDB’s.  The 12% figure is a governmentwide goal, meaning that some agencies may conduct more than the targeted amount of business, while others may do less.  Each agency must set its own goal.  The increased role of such companies in the government contracting space should get the attention of all government contractors.  Large businesses, for example, may want to increasingly partner with such companies.  Indeed, SDB’s may play a growing role in large business partnership decisions. Such businesses, however, should carefully vet any potential partner.  Experience has shown that both legitimate and questionable companies will try to take advantage of any situation where the government targets money for specific groups.  Small businesses that do not have an SDB designation may want to adapt their federal business plans to succeed in an environment where SDB’s will now account for more than half of the government’s total small business goal.  Despite increases in federal small business use overall, it is very likely that small businesses carrying other designations will feel the squeeze.  Government contractors of all sizes know that their business is changing in several ways.  Adapting to the increased presence of SDB’s is just one task companies must address to succeed in the federal market this new year.