The White House plans to significantly increase the share of federal contracts awarded to Small Disadvantaged Businesses (SDBs) by 50% by 2025. This ambitious goal translates to awarding an additional $100 billion to SDBs over the next five years. Currently, the target for SDBs is set at 5% of federal contracting dollars, but recent data shows that federal agencies have been exceeding this goal, awarding an average of 9.8%. The new goal aims to raise this share to nearly 15% by 2025.
Disaggregating Data
Detailed Analysis
The White House intends to disaggregate federal contracting data into more specific categories such as Black-owned, Women-owned, Asian-owned, and Hispanic-owned businesses. This process will provide a granular view of how different groups are represented and will help identify disparities in contract awards. By understanding which groups are under-served, targeted measures can be implemented to address these gaps and create more federal contracting opportunities for these businesses.
Improved Tracking
This detailed data tracking will also enhance transparency and accountability, ensuring that the efforts to support disadvantaged businesses are effectively monitored and adjusted as needed. Improved tracking systems will allow for a more accurate assessment of progress towards the new contracting goals, ensuring that each group’s needs are addressed.
Reforming Category Management
Incentives for SDB Procurement
The reform of category management aims to improve the way credit is given to agencies for awarding contracts to SDBs. Currently, category management practices can sometimes result in fewer contracts being awarded to socio-economic small businesses, including SDBs. To counter this, the White House plans to implement reforms that will automatically provide agencies with credit under category management for all awards made to socio-economic small businesses. This will help create a more inclusive environment for small business and government contracts.
Encouraging Diverse Suppliers
These changes are expected to boost the diversity of suppliers within federal agencies, as agencies will be incentivized to include more SDBs in their procurement processes. By aligning category management with diversity goals, the White House aims to foster a more equitable procurement environment.
Organizational Changes
Evaluation Criteria for Executives
Compliance with the new contracting goals will become a key component of the evaluation criteria for individuals in the Senior Executive Service (SES). This change is designed to ensure that agency leaders are directly accountable for meeting the new goals, creating a strong incentive for them to prioritize SDB participation in federal contracts. This adjustment will also impact how government contractor services are evaluated and managed, aligning executive performance with the new diversity objectives.
Enhanced OSBDU Access
Federal Offices of Small and Disadvantaged Business Utilization (OSBDUs) will gain more direct access to senior leadership within agencies. This will facilitate better support and resources for SDBs, helping them navigate the federal procurement process and secure contracts more effectively. Enhanced access to decision-makers will ensure that SDBs receive the necessary support to succeed in federal contracting.
Increasing Market Entry
Addressing Declines in New Entrants
The initiative aims to reverse a troubling trend of a 60% decline in new entrants to the federal marketplace. By removing barriers that prevent new firms from entering the market, the White House hopes to foster a more competitive environment where start-ups and emerging businesses can compete alongside established players. This includes creating more government acquisition pathways to facilitate entry and ensure that new businesses have the opportunities they need to thrive.
Supporting Start-ups
Special emphasis will be placed on creating opportunities for start-ups, ensuring they have the resources and support needed to participate in federal contracts and grow their businesses. By addressing the challenges faced by new entrants and providing targeted support, the White House aims to stimulate innovation and competition within the federal contracting space.
Call to Action
For businesses seeking assistance with obtaining certifications or pursuing government contracts, attending relevant events and workshops can provide valuable guidance and support. Consider participating in upcoming events organized by government associations to learn more about navigating the federal procurement process and taking advantage of new opportunities.
For more information and to register for events, visit: GovAssociation Events.For more information and to register for events, visit: GovAssociation Events.
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