The federal government has boosted its goals for procurement from small businesses, in guidance issued by the Office of Management and Budget last week.
OMB's Office of Federal Procurement Policy pushed the annual governmentwide goal for prime contract awards to small businesses from 20 percent to 23 percent. A policy letter issued by OFPP Administrator Deidre Lee also called for 5 percent of prime contract awards to go to women-owned small businesses and 5 percent to go to small disadvantaged businesses. Another 5 percent of subcontract awards should go to each of those sectors, Lee said.
The guidance also requires agencies to issue 3 percent of prime contracts to HUBZone small businesses by 2003. The goal for fiscal 2000 is 1.5 percent. HUBZone businesses, which receive their designation from the Small Business Administration, are located in impoverished areas.
Lee's letter replaces previous guidance on small business procurement goals that did not include statutory changes to federal procurement rules made in 1994 and 1997.
Each agency must negotiate its own small business contracting goals with the Small Business Administration every year. Under the OFPP guidance, if an agency fails to meet its goals, the agency must explain to SBA how it plans to improve its performance.
According to SBA, 23.4 percent of prime federal contracts went to small businesses in 1998. The government is lagging, however, in contracting with women-owned small businesses. Over the last five years, an average of only 1.84 percent of federal procurement dollars went to such businesses.
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