“The number of small businesses receiving government contracts dropped yet again in Fiscal Year 2020–and the four-year decline is 12.7%.
In its FY 2020 goaling scorecard, the SBA reported that 45,661 distinct small businesses received contracts in the top 100 NAICS codes. The previous fiscal year, 46,661 distinct small businesses received contracts. Four years ago, when SBA first started including this statistic in its annual reports, the number stood at 51,866. Clearly, the numbers are going in the wrong direction…”
“The formula calls for 50% of SBA’s grade to be based on the prime contract dollars awarded to small businesses, with 20% of the grade based on subcontracting dollars. In contrast, only about 10% of the government’s grade is related to the number of small businesses receiving prime contract awards. In other words, under the SBA’s formula, dollars are seven times more important than the number of distinct small businesses awarded contracts. (The remaining 20% of the formula involves requirements for the agencies’ Offices of Small and Disadvantaged Business Utilization).
On top of that, the scoring for the ‘distinct number’ category is extremely generous, with essentially no way for an agency to fail no matter how far the number of awardees drops. Under the formula, a year-to-year ‘no change’ in the numbers earns a nice, round ‘1.’ A decrease of up to five percent is scored–wait for it–“0.9.” Yep, an agency can lose 4.9% of its small business awardees and suffer only a 0.1 score drop. Even a decrease of ‘10% of more’ generates a score of ‘0.7.’ There is no lower score possible, even if an agency loses 100% of its small business awardees…”
“Don’t get me wrong–the goaling scorecard is an excellent idea in theory and can help hold federal agencies’ feet to the fire when it comes to small business contracting. But something is wrong with the SBA scorecard when the government can run around touting its “A” grades like a high school valedictorian while the number of small businesses actually selling goods and services to Uncle Sam continues to plummet precipitously…” Read the full article here.
Source: Number of Small Businesses Awarded Federal Government Contracts Has Dropped 12.7% in Four Years – By Steven Koprince, August 19, 2021. SmallGovCon.
