Small Businesses Short-Changed on Contracts for 10 Years

March 29, 2012

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." 

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