Big Competition

Small business gains pale as focus shifts to large-scale contracts.

In fiscal 2008, much of the focus on small business contracting centered on specific segments of that community. Battles over implementing the women-owned small business contracting

program-which would help federal agencies award 5 percent of contracting dollars to these firms-raged on, courts addressed the constitutionality of the 8(a) program for minority-owned, economically disabled small businesses, and the government began trying to prioritize procurement goals for small business groups.

According to data compiled by Eagle Eye Publishers Inc., federal spending with small business increased by more than $10 billion from fiscal 2007 to 2008. But the 12 percent jump lags behind the total federal procurement spending increase of 18 percent. While small business contracts are on the rise, these firms are capturing a smaller piece of the pie at a time when spending is ballooning.

A number of industry groups and research firms say small businesses are unable to keep up with spending increases because such a large percentage of procurement involves multiple award agreements, such as the General Services Administration's schedules of governmentwide acquisition contracts. Some multiple award contracts are tailored for small businesses, but critics believe the general trend toward these large-scale agreements limits competition and excludes small firms. As spending under these vehicles accelerates, they will become even more important to small businesses hoping to break into the federal marketplace

As the early indicators of a recession began to affect companies, small firms turned to the government for help accessing credit and low-interest loans. Congress and the Small Business Administration turned their attention to cross-industry assistance, forcing them to leave behind small business contracting reforms that were already struggling. The large-scale initiatives that dominated fiscal 2007 largely waned, and concerns about the constitutionality of race and gender-based procurement programs came to the forefront of the debate.

SBA has been stalling on the implementation of the women's small-business procurement program for years, and this year it teamed with the Justice Department to say additional research was needed to ensure the program could withstand constitutional scrutiny. Originally dismissed by critics as yet another foot-dragging maneuver, their concerns might have been legitimized in November by an appellate court decision that determined the Defense Department's price preference program for 8(a) firms was unconstitutional. Legal opinions on the ramifications of this decision differ widely, but some agencies are working with Justice to review existing programs to ensure they can withstand legal challenges.

SBA says it improved tracking and transparency in reporting its fiscal 2007 contracting data, but small business advocacy groups remain skeptical. The American Small Business League, in particular, says SBA's failure to accurately track and honestly report small business contracting figures is allowing large firms to capture procurement dollars meant for up-and-coming companies. This debate, like so many others involving federal opportunities for small firms, seems to be perennial. Priorities for the small business community remain stable, but the procurement environment is changing. Advocates acknowledge that tone and tactics are likely to shift and small companies will have to stay nimble to guarantee their fair share of the opportunities ahead.

Click here for the top 50 small business contractors.
Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


When you download a report, your information may be shared with the underwriters of that document.