Each year, more than 10% of the US federal budget goes to private contractors. In 2020, this translated to more than $665 billion, up from less than $595 billion the year before, and $536.8 billion in FY2011.
A government-wide push to award 25% of all government contracts to small businesses exceeded its goal in 2020, when more than 26% of all contracts went to small businesses, for a historic record of nearly $145.7 billion. The percentage of small-business awards represents a slight drop from 2019’s pace of 26.5% but increased government spending, much of it in response to the COVID-19 pandemic, added more than $14 billion to FY2020’s award total.
Women-Owned SMBS increase contract wins by more than 55%
Compare that to FY2010, when the government failed to meet the SBA’s goal of 23% and awarded $97.94 billion in prime contracts to small businesses.
Women-owned small businesses were awarded $27.14 billion in prime contracts in FY2020, compared to $17.45B in FY 2010. Service-disabled veteran-owned small businesses posted their fifth straight year of percentage gains to 4.28% in FY2020. Since FY2010, these numbers have climbed steadily from 2.50% of prime contracts.
Nearly $24 billion in government contracts went to such businesses in FY2020 up from $10.79 billion in FY2010. HUBZone-qualifying small businesses missed the SBA’s target of 3% of all government contract awards but continued to reverse a trend that saw their share drop to just 1.7% in both FY2016 and FY2017. Their 2.44% share exceeded FY2010’s 2.77% for the first time in a decade, and awards to HUBZone companies rose from $11.96 billion in FY2010 to $13.64 billion.
“…We know that there’s much more to do to ensure all of our small businesses can get contract-ready and have the opportunities they need to engage,” said SBA Administrator Isabel Guzman in a news release.
FY 2021 sees overall decline in contract spending
Deltek’s GovWin IQ reported last week that U.S. fed gov spending during fiscal year 2021 totaled $629 billion, with more than 60% of that used for defense-related contracts. This represents a decrease from the $665 billion spent in fiscal year 2021.
“While overall contract spending dipped slightly compared to 2020, several departments and market segments saw a significant increase in spending, especially from within civilian agencies,” reported Kevin Plexico, senior vice president of information solutions at Deltek.
There are not details at this point on how much of those contract dollars were funneled to small businesses, but we will update our Blog when those numbers become available.
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