Study Analyzes Small Business Opportunities in Government Procurement

June 9, 2014

The Office of Advocacy, an independent office within the Small Business Administration, released a report entitled, Evaluation of the Small Business Procurement Goals Established in Section 15(g) of the Small Business Act.  The study, authored by Henry B.R. Beale, is an independent assessment of the small business procurement goals as ordered in the National Defense Authorization Act for FY 2013.    The report investigates the characteristics of companies seeking federal contracts and evaluates the overall procurement process to determine how contracting goals are established, what data is available, and what barriers still exist that inhibit small business entry.

“I constantly hear from our nation’s small businesses about their desire to enter into the government marketplace.  Today’s study demonstrates how our nation’s entrepreneurs are playing in the procurement field.  It is interesting to note that this report illustrates specific sectors where small businesses are having success,” said Dr. Winslow Sargeant, Chief Counsel for Advocacy.

“I hope in the near future our government will also develop a database for all the subcontracting information as well.  We know there is a great window of opportunity for small business involvement in subcontracting, but we still lack access to this data and a well-developed system for analyzing how to improve small business subcontracting.”

Some highlights of the study include:

  • Procurement is highly concentrated in four main industries: manufacturing; professional, scientific and technical services; administrative and support, waste management and remediation services; and construction.
  • Of the four main industries, construction awards the most small business contracts, with close to 45% going to small business.
  • Increasing small business procurement in the top sectors, especially manufacturing where the small business share is not quite 12%, is essential to improving the overall small business procurement rate.
  • Stronger market research is needed to match small business capabilities with procurement requirements.