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Feds fall short on small biz contracts

By Kent Hoover
Sacramento Business Journal
September 10, 2010

The federal government once again missed its goal for contracting with small businesses in 2009, awarding slightly less than 22 percent of its procurement dollars to small firms.

Congress has directed the government to award 23 percent of its contracts to small businesses.

Federal agencies awarded $96.8 billion in prime contracts to small businesses last year, according to the Small Business Administration. That’s up by more than $3 billion from 2008, when agencies awarded 21.5 percent of their procurement dollars to small firms.

”There was an increase in both dollars and contracting share for every small-business category,” said SBA administrator Karen Mills. “This represents real progress, but not enough. We must reaffirm our commitment to ensuring that the 23 percent goal is met and exceeded."

More than 7.5 percent of contracts went to minority-owned businesses, exceeding the 5 percent goal for that type of small business. The government fell short of its goals, however, for women-owned businesses, firms in low-income Hubzones, and businesses owned by service-disabled veterans.

More than 30 percent of contracts funded by the economic stimulus bill went to small businesses, the SBA noted.

The American Small Business League, a Petaluma-based organization, contends the SBA’s small-business contracting numbers are inflated. Its own analysis of federal contracting dollars found that many large businesses received contracts that were counted toward the small-business goal.

”Every year billions of dollars in federal contracts are diverted to Fortune 500 corporations and other large businesses, and every year the government fabricates its numbers,” said ASBL president Lloyd Chapman.

SBA spokesman Mike Stamler said, however, the agency is “continuing to work with federal agency procurement staff to strengthen the integrity of contracting data.”

Read more: Feds fall short on small biz contracts - Sacramento Business Journal



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