WASHINGTON — The U.S. government has missed its small-business contracting goal every year in the past decade, a sign of the continuing barriers facing companies competing with larger rivals for federal work.
The government has a target of awarding 23 percent of eligible prime, or direct, contracts to small businesses. It awarded 21.8 percent of $423 billion in such awards in the fiscal year that ended Sept. 30. The Pentagon, which represents more than two-thirds of all prime contract revenue, has also missed its goal for 10 years, according to federal procurement data.
The shortfalls have spanned both Republican and Democratic administrations, which have prodded officials to boost small-business awards. President Barack Obama’s Office of Management and Budget told agencies in a February 2011 memo that their underachievement deprives taxpayers and “takes away opportunities for small businesses to create jobs and drive the economy forward.”
The government’s track record is “a real eye-opener,” said Robert Burton, former acting administrator of the Office of Federal Procurement Policy and now a partner at the law firm Venable LLP in Washington. “As goes the Department of Defense, goes the rest of the agencies. If DoD doesn’t make it, probably the rest of the government isn’t going to make it.”
Agencies may be reluctant to take chances on small businesses, defined by the government as having fewer than 500 employees or less than $7 million in average annual sales. They generally don’t have the performance records of large corporations that are “known quantities,” Burton said.
“I’m convinced that if the government wanted to meet the goal, they could do it, but I don’t know that the government really wants to do it,” he said.
The Small Business Administration is working with agencies to help them meet their goals, John Shoraka, a SBA acting associate administrator, said in an e-mail.
“The goal is to make the goal,” Shoraka said. “Twenty-three percent is within reach, and the SBA thinks it should be the government’s objective to meet that goal.”
The federal government has “lofty goals,” said Steve Westerlund, president of Aquasis Services, a small business in Pensacola, Fla., that collapsed after doing work for the Department of Defense for 27 years. “But nothing ever happens.”
It’s getting harder to win federal awards, said Annette Wright, president of Toledo, Ohio-based Unity Cable Technologies Inc., which has done work for the Pentagon and the Department of Homeland Security.
Wright started her company in 1994 as a wireless cable and electrical product supplier. She said she once had three employees, and that she now can’t afford to support anyone besides herself.
“I can’t pay anybody if I’m not winning contracts,” Wright said. “I will bid on supplying blankets these days if I can find them and be competitive on it.”