Again, 2021 has been a pretty good year for small business entrepreneurs, despite the continued downward trend in the number of small businesses working with the government.
Federal agencies hit another milestone after awarding $154.2 billion in contracts to small businesses last fiscal year. The figure puts him $8.5 billion more than fiscal 2020, another record year, and represents about 27% of the total number of federal contracts the government has awarded.
Notably, this is a few percentage points above the target of 23%, but overall the number of small entrepreneurs is declining. 65,000 small businesses signed contracts in fiscal year 2021, down 40% from the last decade, according to the company. Isabel Guzmán, SBA administrator, who recognized the problem and proposed a solution.
“We need to promote competition and ensure fairness so that federal spending can take advantage of all these great products and services available in the marketplace,” Guzman said. Ltd. in an exclusive interview.
According to the SBA, one of the main problems behind this phenomenon is bundling, a practice of consolidation where contracts become so large that small businesses cannot accept them. The SBA said in another call to media and others on Tuesday that the agency is working with ministers to crack down on the practice.
He’s also working on improving stats on carveouts. Unfavorable small business spending reached 11% for the first time last year. The federal agency also paid his $72 billion to small business contractors during the same period.
However, the contract value awarded to women-owned small businesses fell short of the 5% annual target set by the SBA. In fiscal year 2021, this group’s spending hit 4.63% compared to her 4.85% the previous year. The agency nearly six-fold increased the number of certified businesses while expanding eligibility for the North American Industry Classification System (NAICS) code, making women-owned businesses in more diverse industries eligible for federal spending programs. is.
The government also failed to meet its target of 3 percent employment for small businesses in historically underutilized business zones (HUBZone), including businesses located in some tribal and rural areas. did. These companies are still winning a record $14.3 billion in contracts, representing 2.53% of eligible dollars.
Guzman said the agency is working to expand its small business supplier base so that more small businesses can participate. And the agency wants to continue fine-tuning the application process. The SBA asked for comment in late April on a proposed rule that would change NAICS’ company size standards for his nine sectors. Such changes expand eligibility for the Agency Agreement Program. “SBA is trying to create simpler solutions to help businesses navigate federal programs more easily,” he says. Ltd.