Taking Steps to Bolster Small Business Participation in the Federal Marketplace
The Biden-Harris Administration is committed to ensuring that federal investments build wealth and opportunity for underserved entrepreneurs and small business owners. To ensure we are best delivering for the American people, today, the Office of Management and Budget (OMB) is issuing guidance to help more small businesses participate in federal contracts. This step will enable the federal government, the largest purchaser of goods and services in the world, to support a diverse and resilient federal marketplace, drive procurement cost savings, and improve the overall supply chain.
This guidance will advance the President’s Investing in America agenda—a key pillar of Bidenomics—and his bold goal of increasing the share of federal contracts going to small businesses owned and controlled by socially and economically disadvantaged individuals (SDBs) to 15% by Fiscal Year (FY) 2025, a 50% increase from spending levels when he first took office. For the last three fiscal years, the Administration has achieved record levels of spending on contracts to small businesses, with small businesses receiving nearly $163 billion in federal contracts in FY 2022. A record nearly $70 billion of that went to SDBs.
The guidance addresses small business participation on “multiple-award contracts,” a popular buying tool used for nearly $160 billion of total contract spending in FY 2022 – over 20 percent. These contracts allow agencies to meet mission needs in a timely, cost-effective manner by awarding tasks to contractors using streamlined competitions. The guidance encourages earlier engagement and planning with agencies for multiple-award contracts to maximize opportunities for small business contract holders; express consideration of “on-ramps” to allow for businesses to be added during the performance period of the multiple-award contract; and the use of small business set aside orders for competition just among small businesses.
“This guidance takes an important step in ensuring our diverse base of small businesses have opportunities in a greater diversity of acquisition strategies,” said Small Business Administration (SBA) Administrator Isabel Casillas Guzman. “By taking advantage of the strategies in this guidance, the Federal Government will be able to increase the number of small business firms in the Federal supplier base and increase contracting opportunities for small disadvantaged businesses (SDBs). This is critical as agencies work towards cumulatively awarding 13 percent of total contract spend to SDBs in FY 2024 and 15 percent beginning in FY 2025.”
“Small business procurement is a critically important dimension of economic activity,” said OMB Deputy Director for Management Jason Miller. “Each year, tens of thousands of small businesses serve as contractors for the federal government, providing a variety of goods and services. Supporting small businesses’ involvement in government contracting both strengthens our ability to get the goods and services the government needs to fulfill its missions, and promotes more resilient supply chains, job creation in local communities, a vibrant and innovative industrial base for national security, and more diverse, competitive, and dynamic markets.”
During the Biden-Harris Administration, federal agencies have made significant progress in using acquisition as a catalyst to improve how the federal government works for the American taxpayer. These improvements are driven, in large part, through the pursuit of two inter-related contracting strategies – the President’s Management Agenda and Better Contracting Initiative; buying as an organized entity to get better outcomes from our contracts; and creating a diverse and resilient federal marketplace that leverages the broad talents of SDBs.
For more information on the Biden-Harris Administration’s commitment to bolstering small business, see here.
