The Small Business Administration is forecasting a $4 billion reduction in small business federal contracting this year as a result of sequestration, which started on March 1.

SBA Administrator Karen Mills offered that estimate in a recent letter to a Senate panel.

“Under sequestration, there would be both fewer federal contracts for small businesses to win, and less technical assistance to help small businesses compete for those opportunities,” Mills wrote.

Under the sequester, federal agencies are to suffer an $85 billion spending cut in fiscal 2013.

According to the Office of Management and Budget, the SBA is set to lose more than $92 million through sequestration, of which about $69 million will be taken from disaster loans and business loan guarantees.

Sequestration would take away loan guarantees for $902 million worth of loans for 1,928 small businesses, Mills wrote.

Regarding federal contractors, Mills said SBA would do 350 fewer 8(a) reviews and 40 fewer HUBZone reviews as a result of sequestration.

Also, the SBA’s 900 Small Business Development Centers would assist 2,000 fewer small businesses; the 110 Women’s Business Centers would serve 12,000 fewer; the 350 chapters of SCORE would serve 19,000 fewer; and the Advanced Manufacturing Clusters would lose all funding, Mills wrote.

The SBA will rely on staff early retirements to meet the spending goals, and will not take furloughs, according to the Associated Press.

At the Defense Department, military officials told House Armed Services Committee members of severe consequences to readiness, planning and productivity and warned that small contractors in particular would be hurt by sequestration.

Lt. General Charles Davis said cuts in operations and maintenance budgets would be especially damaging to small firms.

“Anything across our bases and installations, just the most routine services, those are generally all set aside for small businesses,” he said, Davis said at the hearing, according to FederalNewsRadio.

“A very large chunk of that goes to small businesses to do maintenance on buildings, to do military construction, which we have virtually no money for,” David said.

“We know we’re already $170 million behind on our small business contracting goals compared to this point last year. That’s because base commanders have started pulling back their obligations on O&M because they know what’s coming,” Davis said at the hearing.

More information:
Small Business Dashboard: http://smallbusiness.data.gov/