Veterans Business Resources

a portal for all Veterans and SDV Small Business Owners

Inside the Numbers – A Closer Look

Each year, the U.S. Small Business Administration (SBA) negotiates socioeconomic procurement preference program, or ‘contracting,’ goals with Federal agencies. These goals are based on statute, and require that, in the aggregate, agencies award contracts as follows: 23% to small businesses; 5% to Small Disadvantaged Businesses; 5% to Women-Owned Small Businesses; 3% to HUBZone Small Businesses; and 3% to Service-Disabled Veteran-Owned Small Businesses.  In fiscal year 2009, the actual goal attainment was 21.9% or $96.8 billion. 

If true, the $96.8 billion would represent a hefty amount of money flowing into and through the Small Business community.  There however, exists several problems that greatly reduce that total dollar spend in the Small Business community.  Let’s’ just list a few; 1. Many contracts designated for small businesses go to a large business masquerading as a small business, 2. Many small businesses allow themselves to be used as pass throughs, resulting in the bulk of the money going to big business 3.  Many contracts that could/should go to small businesses are bundled with other requirements, thus exceeding the capacity and capabilities of most small businesses – effectively making the requirement large and taking it out of the small business arena and 4.  Actual contract awards are incorrectly recorded and counted against the goal attainment for small businesses.  

Depending on whom you talk to or where you choose to get your data, the federal government spend each year exceeds $1 trillion, which in turn sets the goal for small business spending at $230 billion, per year.  My friends, we are no where close to $230 billion per year coming to the Small Business community.  In this scenario, it appears the truth is a moving target, and, as we all know, a moving target is hard to hit. 

See you on the high ground!

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