For the first time in eight years, the U.S. government has attained its goal for federal contracting with small businesses, the Small Business Administration announced.  Federal agencies awarded 23.39% of eligible contract dollars to small businesses in fiscal 2013, surpassing the government’s 23% goal for the first time since fiscal 2005.

The fiscal 2013 achievement was an improvement from the previous year, in which 22.25% went to small vendors.  However, due in part to budget cuts and sequestration, the total amount of dollars awarded to small vendors decreased from $89 billion in fiscal 2012, to $83 billion in fiscal 2013. That’s a 7.6% reduction.

But that was not as steep of a drop as the decrease in total federal contract dollars for which small vendors are eligible, which fell from $404 billion in fiscal 2012 to $355 billion in fiscal 2013, a decline of 12%.

In the most recent fiscal year, the government also met its 3% goal for contracts with small businesses owned by service-disabled veterans, along with its 5% goal for contracting with small disadvantaged businesses. However, federal agencies fell short on contracting with women-owned small businesses and with small firms in HUBZones.

SBA Administrator Maria Contreras-Sweet announced the annual Small Business Procurement Scorecard Overview, along with goal achievements for 24 federal departments and agencies (see page 4), at NASA Goddard Space Flight Center in Maryland. “Thanks to the President’s leadership and a team effort among all federal agencies, we were able to meet this goal,” Contreras-Sweet said at the event.

John Shoraka, the SBA’s associate administrator for government contracting and business development, also credited a team effort for reaching three out of the five small business goals. “This is a groundbreaking and proud achievement for the federal government and especially for our small businesses, ” Shoraka wrote in a blog entry.

“Despite shifting budgetary priorities and a decline in overall spending, the federal government was still successful in increasing the overall percentage of contracts that were awarded to small businesses,” Shoraka wrote.

Each year, the SBA publishes the annual scorecard showing overall small business federal contracting goal achievement for the U.S. government.

In addition, the SBA publishes goal achievement percentages and grades for each of the major federal agencies each year. Each agency negotiates its small business contracting goals separately with the SBA, with some goals set higher or lower than 23%. The SBA’s goal, for example, was 67% and it achieved 72% in fiscal 2013, while the Energy Department’s goal was 7% and it achieved 5.7%.

The SBA also reports grades for each agency, based on peer-reviewed “success factors” such as quality of data, training and communications about the goals.

In fiscal 2013, three federal agencies received an “A+” grade– the Interior and Transportation departments and the White House’s Office of Personnel Management.  Interior had a goal of 52%, and it achieved 59%. Transportation had a goal of 38% and it achieved 43%. The personnel office had a goal of 20% and it achieved 30%.

An additional 17 federal agencies received an “A” grade; three received a “B”; and one agency, Energy, received an “F.”

Overall, service-disabled veteran-owned small businesses (SDVOSBs) were awarded 3.38% of eligible contracts, totaling $12 billion, in fiscal 2013.  In the previous year, the SDVOSBs gained 3.03% in contracts–reaching the 3% goal– totaling $12.3 billion.

(Editor’s note: As additional data was reported months after fiscal 2012 had closed, the SDVOSB goal achievement for fiscal 2012 later fell below the goal in a White House database, raising questions about the meaning of the goal achievements, according to a recent Set-Aside Alert analysis in the July 11, 2014 issue).

Small disadvantaged firms won 8.61% of eligible contracts in fiscal 2013, totaling $30.6 billion and surpassing the 5% goal. In the previous year, those vendors were awarded 8% of eligible contracts, totaling $32.3 billion.

But the government did not meet all its small business goals. Women-owned small businesses were awarded 4.32% of eligible contracts in fiscal 2013, coming up short on the 5% goal for at least eight years in a row, since at least fiscal 2006. The awards in fiscal 2013 totaled $15.4 billion.  In the previous fiscal year, the women-owned small firms won 4%, totaling $16.2 billion.

HUBZone firms also did not attain the 3% goal, falling far short at 1.76%, with $6.2 billion awarded.  That was a reduction from fiscal 2012, when there were 2.01% of contracts awarded to HUBZone firms, totaling $8 billion.

Responding to the SBA report, House Small Business Committee Chairman Sam Graves, R-MO, said the goal should be raised to 25%.