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By Danielle Ivory - Jul 4,
2012 12:00 AM ET
The U.S. government missed its
small- business contracting goal in fiscal 2011 for at least the 11th
straight year and may be on its way to the 12th.
The U.S. has a target of
awarding 23 percent of eligible prime, or direct, contracts to small
businesses. It awarded them 21.7 percent of more than $423 billion in such
awards in the fiscal year that ended Sept. 30, down from 22.7 percent the
previous year, according to data released by the Small Business
Administration yesterday.
Federal agencies have awarded
17.8 percent of about $212 billion in eligible contract dollars to small
business so far in fiscal 2012, according to the Small Business Dashboard,
a government-run website.
The SBA released its report on
the government's 2011 performance yesterday, three months before the 2012
fiscal year ends, so it may be too late for agencies to substantially boost
awards to small businesses, Michael Golden, who formerly led the Government
Accountability Office's procurement law unit, said in a phone interview.
"The question is whether
agencies can change their contract strategy within a 90-day period,"
Golden, a Washington-based partner for the law firm Pepper Hamilton LLP.
"For agencies that haven't made it, I think they will try, but it'll
be a challenge for them."
Monthly contract spending
generally almost doubles each September from the previous month as
contracting officers rush to spend money before the end of the fiscal year,
according to data compiled by Bloomberg.
'
Need to Improve'
"Releasing the numbers at
this point really highlights where there are opportunities for improvement
and really puts the attention on the agencies," John Shoraka,
associate administrator for government contracting at the SBA, said
yesterday in a phone call with reporters. "This highlights the fact
that we need to improve and highlights the agencies that need to focus on
that improvement."
Shoraka said the timing of the
report would have a "good impact" on fourth-quarter activity,
when spending tends to surge.
"Releasing the scorecard
showing that the government missed its small business goal, yet again, this
late in the fiscal year, and on a day before a national holiday is
unfortunate," D.J. Jordan, spokesman for the U.S. House Committee on
Small Business, said in an e-mail. "Their hope was obviously that no
one would pay attention to this embarrassing news."
Both Parties
Small companies face barriers as
they compete with larger rivals for federal work, including budget cuts,
in-sourcing and the tapering off of stimulus contracts, Shoraka said.
The Pentagon, which represents
more than two-thirds of all prime contract revenue, has also missed its
small-business goal for 10 years.
The government's shortfalls have
spanned both Republican and Democratic administrations. President Barack
Obama's Office of Management and Budget told agencies in a February 2011
memo that their underachievement deprives taxpayers and "takes away
opportunities for small businesses to create jobs and drive the economy
forward."
"It is extremely
disappointing that the federal government has again failed to meet its
small business contracting goals," U.S. Representative Sam Graves, a
Missouri Republican who is chairman of the House Committee on Small
Business, said in an e- mailed statement. "If the administration takes
this priority seriously, these goals are very achievable."
Agency Grades
Each year, the SBA calculates
scorecards that measure how well the government and each federal agency did
in awarding contracts to small businesses, defined generally as those with
$7 million or less in annual revenue or fewer than 500 employees in most
industries.
The scorecards include total
spending with small companies and with specific groups, such as those owned
by women, service- disabled veterans and minorities.
The reports, which include prime
contract dollars and subcontracts to small business, also feature a letter
grade from A to F. Agencies that received an A+ met at least 120 percent of
their goals, while those given an F achieved 70 percent or less of their
goals, according to the SBA.
The Department of Energy, the
second-largest government buyer, received an F grade. The department missed
its goal of 6 percent last year, awarding $1.3 billion, or 5.3 percent, to
small businesses.
Women-Owned Businesses
The Department of Health and
Human Services, the third- largest buyer, received an A, exceeding its goal
of 19.5 percent and awarding $4.5 billion, or 24 percent, to small firms.
The Defense Department earned a B.
The federal government received
a B grade overall. It missed goals for women-owned small firms,
service-disabled veterans and businesses based in areas that historically
have had high unemployment and low incomes.
Even as 2011 marked the first
year of a set-aside program for small businesses owned by women, contracts
to the firms declined last year for the first time in more than a decade.
Women-owned small businesses
received $16.8 billion, or 4 percent, of eligible contract dollars,
according to the SBA. The government set a goal in 1994 of awarding at
least 5 percent of the total value of eligible contracts to women-owned
businesses. It has never met it.
Contracts to black-owned firms
dropped 8 percent to $7.12 billion from fiscal 2010 to 2011. Awards to
Hispanic-owned businesses decreased 7 percent to $7.89 billion. Contracts
to the two minority groups fell at a faster pace than all contracts, which
dipped 1 percent as the U.S. government slowed spending to help reduce the
federal deficit.
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