Small Businesses Scrambling More for Federal Contracts

Tighter agency budgets have forced small businesses to step up their efforts to win federal contracts, though overall bidding activity over the past five years has dropped, according to a survey by American Express OPEN.

Though the companies surveyed -- many of them owned by women and minorities -- have boosted their investments of time and money in federal contracting, their average number of prime contracting bids has declined from 19.5 in 2007-2009 to only 5.5 during 2010-2012, the analysis found. Small business contractors on average invested $128,638 in time and resources seeking government contracting opportunities in 2012, a 49 percent increase from 2010.

At the same time, small companies have improved their “batting averages” when looking at contracts won versus number of bids. “With fewer bidding opportunities, active small business contractors are bidding smarter,” the analysis stated.

The prime contracting success rate is now 55 percent, up from 41 percent three years earlier. The subcontracting success rate is 86 percent, down just slightly from the 90 percent reported in 2007-2009.

The analysis is based on an online questionnaire completed in February and March by 684 small business owners active in federal contracting.

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