Small business share of contracts shrunk slightly in 2011, SBA reports

The Small Business Administration on Tuesday released its annual score card on federal contract dollars won by small businesses, reporting that contractors meeting the eligibility criteria were awarded $91.5 billion in government work in fiscal 2011, or 21.65 percent of the total.

Current law requires agencies to reach for a goal of awarding 23 percent of contract dollars to qualified small businesses. In the Obama administration’s first three years, SBA reported, the 24 major agencies awarded a total of $286.2 billion in contracts to small businesses, or 22.07 percent, just short of the target. SBA said this represented a $32 billion increase over the three preceding years even as contract spending dropped governmentwide.

Some lawmakers have proposed raising the goal to 25 percent in a bid to help create jobs during the weak economy.

“Federal contracting with small businesses is a win-win,” John Shoraka, SBA’s associate administrator for government contracting and business development, wrote in a blog post. “Small businesses get the revenue they need to grow their revenues and create jobs. Meanwhile, the federal government gets the chance to work with some of the most responsive, innovative and nimble companies in the United States -- often with a direct line to their [chief executive officer].” But, Shoraka added, the fiscal 2011 score card “reflects the need for improvement in small business procurement across the federal government.”

The score card showed an overall drop in the share of small business awards since fiscal 2010, with an increase only in the category of small businesses owned by service-disabled veterans. Contract dollars as a percentage of overall spending dropped slightly in the categories of women-owned small businesses, small disadvantaged businesses and businesses in Historically Underutilized Business Zones.

The Petaluma, Calif.-based American Small Business League gave the score card a thumbs down. The group has long challenged the score card’s methodology and has argued that far fewer small businesses actually are winning contracts. “Since 2003, more than a dozen federal investigations have found billions of dollars in federal small business contracts flowing into the hands of corporate giants,” it said in a Tuesday statement.

“I endorsed Barack Obama for president, but I couldn’t be more disappointed,” said Lloyd Chapman, the league’s president and founder. “During his campaign, President Obama promised to end the diversion of federal small business contracts to corporate giants, but has done nothing since. President Obama must force the SBA to stop fabricating these numbers.”