Recently, we discussed the federal government's success in meeting the small business prime contracting goal in FY 2013. Unfortunately, federal contractors did not have as much success when it comes to small business subcontracting.
Like small business prime contracting, federal agencies set goals for the percentage of subcontracts that will be awarded by federal contractors to small businesses. To achieve these goals, the government requires many federal contractors to submit small business subcontracting plans that outline how small businesses will participate in contract performance.
In the Small Business Procurement Scorecard, published annually by the U.S. Small Business Administration ("SBA"), the SBA reported the following subcontracting goals and achievement for FY 2013:
While federal agencies did not meet the 36.00% subcontracting goal for FY 2013, many of the figures are an improvement from FY 2012. Small business subcontracting (34.00% in 2013) increased from 33.60% in 2012, albeit decreasing from 35.00% in 2011. Subcontract achievement for WOSB concerns (6.60% in 2013) increased from 5.60% in 2012 and SDB subcontracting (6.70% in 2013) increased from 5.10% in 2012.
SDVOSB and HUBZone concerns, on the other hand, continue to experience a drop off in subcontracting awards. SDVOSB concerns (1.70% in 2013) are experiencing a steady decrease from 1.80% in 2012 and 2.10% in 2011. Similarly, subcontracting to HUBZone concerns (1.20% in 2013) decreased from 1.30% in 2012 and 1.90% in 2011.
Once again, the Scorecard Summary revealed a few standout federal agencies. The Department of Housing and Urban Development and Department of Labor both exceeded their 55.00% small business subcontracting goal. The Department of Defense ("DOD"), which has the greatest total eligible dollars (by a landslide), reported that 35.40% of subcontracts were awarded to small businesses. While this falls short of DOD's 36.70% goal, DOD still made a sizable impact on federal dollars flowing down to small business subcontractors.
Overall, there is still much to look forward to for small businesses. With an incentive to meet small business subcontracting goals in the coming years, federal agencies may place an even greater emphasis on ensuring that small business concerns receive their fair share of subcontracts. As always, feel free to reach out if you have any questions on how to pursue federal contracting and subcontracting opportunities.
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