Small Businesses Win Record Share of Contracts

[The following article, written by David Phinney, appeared the April 5, 2004 issue of Federal Times.]

Small businesses won a greater share of federal contracts last year than ever before, the Small Business Administration announced.

Drawing upon data compiled by the Federal Procurement Data Center, SBA found that the government awarded more than a quarter of its prime contracting dollars to small businesses for the first time ever.

The data for fiscal 2003 indicates that small businesses won $62.7 billion in prime contracts, representing 25.4 percent of all government prime-contract-dollars. That is an increase of $9.7 billion over 2002, or 18.3 percent.

Every category of small business tracked by SBA showed impressive gains, SBA found. Small disadvantaged businesses received $18.2 billion in contracts, a $2.3 billion increase over 2002. Likewise, participants in the 8(a) business development program received nearly $4 billion more than in 2002, for a total of $9.6 billion in 2003.

Dollars to women-owned small businesses increased by $1.1 billion, to $7.9 billion. Service-disabled veterans also saw an impressive jump in the value of contracts awarded, receiving $510 million in 2003 as opposed to $298 million the year before.

The statutory goal for small-business contracting is 23 percent, said SBA Administrator Hector Barreto. "We not only exceeded those standards, but we set an all-time record, awarding a higher percentage of federal contracting dollars to America's small businesses than ever before."

The SBA estimates that the $62.7 billion in prime contracts awarded to small businesses created or retained 469,632 jobs.

The Bush administration's former administrator for procurement policy, Angela Styles, said she was amazed by the new numbers.

"A lot of work and a personal commitment by the president brought these numbers," said Styles, who resigned in September. "The only way they will remain this high is if the president and staff continue to focus on small-business issues."

Sen. Olympia Snowe, R-Maine, chairwoman of the Senate Small Business and Entrepreneurship Committee, greeted the news with some reservation. While the numbers indicate that the government is making progress, she said more could be done.

"I want to help (SBA) build on this progress," she said. "Obstacles still remain to hinder small firms from realizing greater business opportunities in both prime contracting and subcontracting areas."

Ronald Newlan, chairman of the HubZone Contractors National Council, agreed, His organization represents small businesses working in areas with high levels of poverty.

"On a micro-level sense, we need more energy, more commitment," he said.
The HubZone program, which just celebrated its fifth anniversary, was awarded $2.4 billion in contracts last year.

"By my calculations we did just under 1 percent last year of the HubZone 3 percent goal requirement," Newlan said. "That's one-third below and acceptable level, and we need to get the jobs where wages are low and unemployment high."

DAVID PHINNEY

MORE BUSINESS FOR SMALL FIRMS

Most Cabinet departments increased their contracting with small businesses in 2003:

  2002 2002 2003 2003
 
 Small business contracts(Dollars in billions) As percentage of all contract dollars Small business contracts(Dollars in billions) As percentage of all contract dollars
Agriculture
$1.8
48%
$2.1
51%
Commerce
0.8
52
0.8
53
Defense
32.8
21
40.0
25
Education
0.2
25
0.2
17
Energy
0.6
3
0.9
4
Health and Human Services
1.7
28
20
30
Homeland Security
n/a
n/a
1.0
41
Housing and Urban Development
0.4
38
0.5
54
Interior
1.2
50
1.7
48
Justic
1.6
31
1.3
33
Labor
0.4
27
0.4
28
State
0.8
47
1.1
48
Transportation
1.3
34
0.8
44
Treasury
0.8
28
0.5
27
Veterans Affairs
1.7
30
2.5
30
Government Total
$53.3
23%
$62.7
25%

SOURCE: Federal Procurement Data Center
GRAPHIC BY JOHN HARMAN
 
Content Archived: April 15, 2011