The Washington Post

Federal government fails small businesses for eleventh straight year

The government missed its small business procurement goals for the eleventh straight year. (Win McNamee/GETTY IMAGES)

The federal government has yet again fallen short of its stated small-business contracting goals, extending a streak of coming up just shy for an eleventh consecutive year.

Federal agencies awarded a total of $91.5 billion to small companies in fiscal 2011, down 7 percent from $97.9 billion the year prior, according data released Tuesday by the Small Business Administration. That amounts to 21.7 percent of all prime government contracts, down from 22.7 percent in fiscal 2010 and even further short of the stated annual goal of 23 percent.

The government also missed its procurement goals for women-owned and service-disabled veteran-owned businesses, as well as those located in traditionally underserved and underemployed regions of the country.

“Releasing the numbers at this point really highlights where there are opportunities for improvement,” John Shokora, SBA associate administrator for government contracting, said in a media call. “This highlights the fact that we need to improve and highlights the agencies that need to focus on that improvement.”

The SBA also grades each agency on its success over the past year awarding contracts to small businesses. Notably, the Department of Energy, the second-largest government buyer, received a failing grade, signifying that it came up at least 30 percent short of meeting its procurement goals.

On the other hand, the Department of Health and Human Services, which spends the third most of any agency, received an ‘A’ for awarding 24 percent of its contracting dollars to small businesses.

Currently, there are no penalties in place for agencies that fall shy of their small business contracting goals. However, lawmakers in both chambers and on both sides of the aisle recently introduced bills that would either eliminate bonuses for department heads or reduce budgets for agencies that miss the mark.

Follow J.D. Harrison and On Small Business on Twitter.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he runs the On Small Business blog.



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