Small Business Startup News

U.S. Government Fails To Meet Small Business Contracting Goals For Twelfth Straight Year

Written by Tim Morral
Published: 7/15/2013

Newly released SBA data shows that the federal government failed to achieve the 23 percent small business contracting goal established by Congress for the 2012 fiscal year.

Smart small business owners understand the benefits of competition. But when it comes to government contracts, small companies often feel like they aren't competing on a level playing field.

Federal Small Business Contract Shortfall

Despite many politicians' insistence that small businesses are the backbone of the U.S. economy, the federal government failed to meet its self-prescribed small business contracting goals, making 2012 the twelfth straight year that the small business community has been underrepresented in the awarding of federal contracts.

According to recently released data by the U.S. Small Business Administration (SBA), small businesses were awarded 22.25 percent ($89.9 billion) of federal contracts during the 2012 fiscal year, short of the 23 percent goal established by Congress. Although this was higher than the 21.65 percent of federal contracts awarded in the previous year, the shortfall is a disappointment to entrepreneurs as well as those who have advocated for small companies to receive a larger share of federal dollars.

"The Administration must make meeting this goal a priority because it's efficient governance, and not just a law that makes small businesses feel good," House Small Business Committee Chairman Sam Graves (R-MO) told The Washington Post. "Improving small business opportunities through federal contracts creates jobs and saves taxpayer money because small businesses bring competition, innovation and lower prices."

The federal government also failed to meet contract goals for women and businesses in underserved areas. In the area of subcontracting, the 33.6 percent of subcontracts that went to small companies in 2012 fell far short of the government's goal of 36 percent.

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