Fewer small firms win US contracts

Big drop in small businesses winning federal contracts as primes

      The number of small businesses winning federal contracts as prime contractors has fallen by 22% since 2011, according to a recent analysis by Deltek.

      While the dollar value of federal small business prime contracts has exceeded the government’s 23% goal in the last four years--and rose by $9 billion in fiscal 2016 alone--the number of small businesses receiving federal contracts has dropped.

      From 138,000 small firms receiving federal contract spending in 2011, the number of such firms decreased to 107,000 in 2016, Kevin Plexico, vice president of information solutions for Deltek, wrote in the report. The number fell each year.

      “Key reasons for the decline in small business primes appears to be centered around contract consolidation. As government buyers shift dollars to indefinite delivery, indefinite quantity (IDIQ) task and delivery order based contracts, they are narrowing the field of contracts and contractors that they use,” Plexico wrote.

      Small firms generally prefer prime contracting to subcontracting, Plexico added.

      That is because being a prime offers more control over one’s role and performance, and greater leverage over future work, he wrote.

More Information: GovWin release: http://goo.gl/XhhcwG

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