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Fewer SMALLER BUSINESSES Are Lining Up for Federal Contracts. THE ONES THAT Did Booked an archive $154 Billion in 2021

Once more, 2021was a fairly good year to become a small company contractor regardless of thecontinued downward trendinthe level of small businesses dealing with the federal government.

Federal agencies hit a fresh milestone after awarding $154.2 billion in contracts to smaller businesses within the last fiscal year. That figure, which was$8.5 billion higher in comparison to FY2020–another record-breaking year–amounts to roughly 27 percent of the full total amount of federal contracts awarded by the federal government.

Notably, that is clearly a few percentage points north of itsstated 23 percent goal, however the overall amount of small contractors has dwindled. In FY2021, sixty-five thousand small businessesreceived contracts, down about 40 percent during the last decade,in accordance with SBA Administrator Isabel Guzman, who acknowledged the issue and offered fixes.

“We have to increase competition, and we have to ensure equity in order that we are able to leverage all those great services and products that are offered out there available on the market through our federal spending,” Guzman tells Inc. within an exclusive interview.

Among the major issues behind thisphenomenon, the SBA says, isbundling, or the practice ofconsolidation which makes contractsso large that small and medium-sized businesses cannot take them on. The SBA signaled throughout a separate ask Tuesdayfor media among others that the agency is dealing with cabinet members to clamp down with this behavior.

It is also focusing on improving its stats regarding carve-outs. Small disadvantaged business spending hit 11 percent for the very first time over the last fiscal year. Federal agencies also shelled out $72 billionto small company subcontractors over that same period.

However the quantity of contracting dollars awarded to women-owned small businessesfell lacking the SBA’s stated 5 percent goal for the entire year. In FY2021, the spending among this group clockedin at 4.63 percent, from 4.85 percent the entire year prior. The agency isincreasing the amount of certified firms nearly sixfold alongside expanding UNITED STATES Industry Classification System (NAICS) code eligibility, making women-owned businesses in more diverse industries qualified to receive for federal spending programs.

The federal government also missed its mark in achieving the three percent contracting goal for Historically Underutilized Business Zone (HUBZone)smaller businesses, that may includecompanies situated in certain tribal regions or rural areas.Those businesses still received an archive $14.3 billion in contract awards, or an award of 2.53 percent of eligible dollars.

Guzman says that the agency is working towards expanding the small-business supplier base to make sure that more smaller businesses can participate. And the agency really wants to continue adjusting the application form process; the SBA sought comment in late April on a proposed rule that seeks to change size standards for businesses in nine NAICS sectors–such changes would expand eligibility for the agency’s contracting programs.”SBA is considering creating more standard solutions in order that businesses can easier navigate the government programs,” she tells Inc.

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