Set-Aside Alert exclusive research:

8(a) set-asides continued slump in fiscal 2021 for fourth year

White House has raised SDB goal to 11% for fiscal 2022

      The latest federal data indicates that total 8(a) Business Development Program set-aside awards continued to be depressed for the fourth year in a row in fiscal 2021, according to an exclusive analysis by Set-Aside Alert.

      While total awards for the Small Business Administration’s 8(a) socio-economic program generally have been stable in recent years, the 8(a) set-asides took a steep dive in fiscal 2018.

      From $17.2 billion in fiscal 2017, the 8(a) set-asides plunged to $11.1 billion in fiscal 2018, according to USASpending.gov. That is a 36% drop.

      The 8(a) set-aside slump has continued since then, including in fiscal 2021, in which $11.6 billion in 8(a) set-asides have been reported to date. The 2021 fiscal year ended on Sept. 30, 2021, so the data should be nearly complete at this point in time.

      The trend may change and drive 8(a) set-aside awards upward this year due to recent actions by President Joe Biden. In December 2021, he issued an Executive Order raising the goal for procurements from Small Disadvantaged Businesses (SDBs) to 11% for fiscal 2022, rising to 15% by fiscal 2025. The SDB award category includes awards to 8(a) firms.

Set-Aside Alert’s analysis

      Set-Aside Alert examined data from USASpending.gov, the SBA and the Congressional Research Service (CRS).

      The 8(a) set-aside awards (including sole-source) hit their highest point in fiscal 2010, then were stagnant for a few years, before sharply dropping in fiscal 2018.

      The drop in 8(a) set-aside awards occurred while total 8(a) awards generally were increasing at a slow pace, according to a recent CRS report.

     The 8(a) set-aside awards averaged about a third to a half of the value of total 8(a) awards. Total awards were higher because many 8(a)s won awards competitively. Also, in some cases, an 8(a) company with multiple certifications may have won an award through a different type of set-aside. For example, if an 8(a) firm with an additional HUBZone certification wins a HUBZone set-aside award, it would be double-counted as a HUBZone and an 8(a) award in some data sets.

      Overall, 8(a) awards increased by 8.2% over 9 years, according to the CRS report. Meanwhile, SDB awards rose much more rapidly in recent years.

      Total SDB awards--which include all 8(a) awards--doubled from 2008 to 2020, from $29.3 billion to $59.0 billion, according to SBA data.

More information:
CRS report: https://bit.ly/3kPNKTV
SBA data: https://bit.ly/3o3p5vI

(URLs in Set-Aside Alert have been shortened by the bit.ly URL shortener)

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