July 13 2012 Copyright (c) 2012 Business Research Services Inc. 301-229-5561 All rights reserved.

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  • US agencies fail to meet small biz procurement goal

    The U.S. government once again fell short of its 23% small-business prime contracting goal in fiscal 2011, although several high-performing agencies exceeded the target.

    Overall, federal agencies awarded 21.65% of their eligible contracts to small businesses in the fiscal year that ended on Sept. 30, 2011, according to the updated scorecard released by the Small Business Administration.

    The total amount of small business contracts dropped to $91.5 billion, from $97.9 billion in fiscal 2010, which was a 7% reduction.

    However, the three-year spending pattern is upward, John Shoraka, the SBA’s associate administrator for government contracting and business development, wrote in a blog post on the SBA website.

    “During the first three years of the Obama Administration, the federal government awarded $286.3 billion or 22.07% in federal contracting dollars to small businesses. This is a $32 billion increase over the three preceding years even as contracting spending overall has declined across the federal government,” Shoraka wrote.

    It was at least the sixth year in a row that the federal government has missed the 23% target for small business procurement, according to SBA data.

    Agencies missed four of five statutory goals, including the 23% overall small business procurement goal. The other unachieved goals were for women-owned, service-disabled veteran-owned and Historically Underutilized Businesses Zones (HUBZone).

    On the other hand, the executive branch reported it exceeded the 5% goal for small disadvantaged businesses: 7.67% of contracts went to those companies.

    Government-wide, the administration gave itself a “B” grade for progress reported by 24 agencies toward attaining goals for contracting with businesses characterized as small, small disadvantaged, women-owned, service-disabled veteran-owned and HUBzone in fiscal 2011. While the broad goal is 23%, agencies may negotiate lower goals for themselves with the SBA.

    The stand-outs for fiscal 2011 were the General Services Administration and Treasury Department, earning “A+” scores for small business goal attainment. Thirteen other agencies earned an “A,” including Health & Human Services, Homeland Security, Interior, Labor, State, Transportation, USDA and the SBA.

    Scoring a “B” on the scorecard were the Defense Department, Education, NASA, National Science Foundation and Veterans Affairs, while HUD, Justice and the Office of Personnel Management received a “C” grade.

    The lowest-scoring department was Energy, which received an “F.”

    The highest-performing agencies in specific categories were HUD for women-owned small businesses, 36.06%; SBA for small disadvantaged business, 47.39%; VA for service-disabled veteran-owned businesses, 18.22%; and Interior for HUBZone businesses, 9.39%.

    Lawmakers, contractors and industry groups said the failure to the meet the procurement goal was disheartening.

    “I remain dismayed that yet again the federal government has failed to meet its statutory government-wide goal, not just for small business overall, but for women, HUBZones, and service-disabled veteran-owned small businesses,” said Sen. Olympia Snowe, R-Maine, ranking member of the Senate Committee on Small Business and Entrepreneurship.

    However, Stan Soloway, president of the Professional Services Council, cautioned against reading too much into the drop in revenues.

    “2011 was a very difficult year with the debt ceiling debate and the late-year appropriations,” Soloway said. “I am not sure (the drop) is that significant.”

    The American Small Business League and other watchdogs have charged that the SBA scorecard is innaccurate because it is likely to include contracts and revenues going to larger companies.


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