For the seventh year in a row, the federal government fell short of its goal of awarding 23% of eligible contracts to small businesses for fiscal 2012.

The dollar value of contracts with small vendors dipped, but not as much as the overall drop in federal prime contract spending.

Federal agencies did much better for service-disabled veteran-owned small businesses and for disadvantaged small firms, including 8(a)s.

The federal government awarded 22.25% of contracts to small vendors in fiscal 2012, totaling $89.9 billion in sales, the Small Business Administration announced in its annual procurement scorecard.

The percentage was an improvement over the fiscal 2011 total of 21.65%.

The government did not meet the 23% goal from fiscal 2006 through fiscal 2012, according to the SBA scorecards for those years.

The last time the executive branch achieved the 23% goal--just barely--was in fiscal 2005, according to a 2008 report by the Government Accountability Office.

In the last 13 years, the goal has been met only three times--in fiscal 2003, 2004 and 2005, according to the SBA and GAO reports.

Congress established the 23% goal in 1997. Previously, it had been 20%.

The government awarded $89.9 billion to small businesses in fiscal 2012, down from $91.5 billion in fiscal 2011, which was a 1.7% drop, the SBA indicated.

However, that reduction was less than the 4% decrease in total federal prime contract spending in fiscal 2012. The total fell from $539.1 billion in fiscal 2011 to $517 billion in fiscal 2012, USASpending.gov shows.

The results were brighter for service-disabled veteran-owned (SDVO) firms and for disadvantaged small vendors.

For the first time since at least fiscal 2006, the federal government exceeded its 3% goal for procurements from small firms owned by service-disabled veterans, the SBA indicated. (Note: Set-Aside Alert predicted in the Feb. 22, 2013 issue that the goal was likely to be met.) The percentage going to such firms was 3.03% in fiscal 2012, totaling $12.3 billion, the SBA said.

That was a boost over fiscal 2011, in which 2.65% went to the SDVO firms, $11.2 billion.

In addition, awards to small disadvantaged firms, including 8(a)s, totaled 8%, the highest in at least seven years, exceeding the 5% goal. Those awards totaled $32.3 billion.

By comparison, small disadvantaged businesses received 7.67% of procurements in fiscal 2011, totaling $32.4 billion.

Women-owned small businesses won 4% of federal contracts in fiscal 2012, which was short of the 5% goal, the SBA said. Those purchases totaled $16.2 billion.

That was a mixed result in comparison to fiscal 2011, in which the women-owned companies were awarded $16.8 billion in contracts, or 3.98% of eligible awards. Procurements from HUBZone vendors showed declines. The HUBZone firms were awarded 2.01%, failing to meet the 3% goal, in the latest report. Their awards totaled $8.1 billion in fiscal 2012.

That compares to 2.35% awarded, totaling $9.9 billion, in fiscal 2011. The decrease could be linked with the shrinkage in HUBZone firms. More than 2,500 HUBZone firms were decertified in fiscal 2012 as a result of population changes in the 2010 census (See Set-Aside Alert issue of Nov. 9, 2012)

Federal agencies awarding a high percentage of contracts to small businesses included the SBA, 71%; DOI, 56%; USDA, 53%; DOT, 45%; and HUD, 40%.

On the opposite end, the agencies with relatively low percentages of awards to small firms included DOE, 5%; AID, 12%; NSF, 15%; Education, 20%; OPM, 20% and DOD, 20%.

Reaction to the goaling results was divided. “The fact that the federal government hasn’t met this meager 23 percent small business contracting goal for seven years is simply unacceptable,” Rep. Sam Graves, R-Mo., who chairs the House Small Business Committee, said in a statement.

But administration supporters said the results were relatively positive, considering the circumstances. Small business purchasing dipped to a lesser degree than did federal agency budgets overall, which were down sharply due to sequestration, they said.

A few activists, including Lloyd Chapman, president of the American Small Business League, and Raul Espinosa, manager partner of the Umbrella Initiative, have questioned the accuracy of the small business data.

Click for our exclusive Set-Aside Alert Insert:
FY2012 Small Business Goals Scorecard