Existing laws which require the federal and state governments to award contracts to qualified small business vendors should be enforced with more detailed and timely reporting of compliance. Government agency contracting goals for small business owners, in all categories, should become mandatory.
Enforce federal, state and local contracting laws and goals
If small business employs about half of all private sector jobs and represents 99% of employer firms, shouldn’t small business owners get their fair share of federal government purchasing contracts? What’s not fair is when contracts that should have been allocated to small business owners get diverted to Fortune 500 companies and their subsidiaries.
The percentage share of total Federal Prime Contract dollars awarded to small business owners continues its steady decline. In 2005, small business received 23.4% of Federal prime contracts. In 2007, small business received approximately 22%. And this percentage only represents contracts in which the small business community was eligible to participate.
Under the Small Business Act 15(g)(1), the Federal Government and each of its reporting 86 “goaled” agencies is to award contracts for goods and services not less than:
23% to the greater small business community
5% to women and small-disadvantaged businesses
3% to service disabled veterans and certified HUB Zone small businesses
So how did our government do in meeting these nominal objectives? According to the SBA procurement data for the 2007 fiscal year, the following government agencies failed to achieve any of their per agency contracting goals to small business; women-owned small businesses, small disadvantaged businesses, Hub Zone businesses, and service-disabled veteran small business owners:
USAID
Department of Defense
The Department of Defense’s (“DOD”) failure to meet any of its small business procurement goals is especially costly to the small business community, given that it represents the largest contracting budget of any government agency. Each percentage difference in contract awards represents millions of dollars to small business owners, and of course job growth. The DOD enters TakeCommand’s “hall of shame” for not awarding its targeted share of contracts to veterans who became disabled during military service. The DOD awarded just .7% to disabled veterans which is a significant miss from its 3% goal.
The following agencies failed to achieve their contracting goals to the greater small business community:
USAID
Department of Commerce
Department of Defense
Department of Education
Department of Justice
National Science Foundation
Social Security Administration
Complete data results by agency and small business sector are available at the Small Business Administration Web site in the section “About SBA and SBA programs”
TakeCommand does acknowledge efforts within the Federal Government to correct system inefficiencies and loopholes that divert small business eligible contracts to large corporations and their subsidiaries or to small businesses that no longer qualify as a small business. But more work needs to be done.
Every Federal Government agency should achieve the minimum contracting targets to all small business contracting sectors. Further, we encourage corporations and state and local governments that receive TARP funding to report their annual utilization of small business vendors until project completion or loan repayment.
