Small Businesses and the Procurement of Federal Contracts

procurement of federal contracts, small business procurement goals, Gierach Law Firm, small businesses, small business operations, Illinois small business law attorneysThis year, the federal Small Business Administration’s Office of Advocacy released a detailed report containing an independent assessment of the implementation of the small business procurement goals that were ordered by the National Defense Authorization Act of 2013 (NDA). Section 15 (g) of the NDA created federal procurement goals aimed at assisting small businesses nationwide with procuring federal work contracts.

The report evaluated the overall federal contract procurement process in order to discern how contracting goals are established, identified existing barriers to entry facing small businesses, assessed the quality of existing data available about procurement projects, and also provided an in-depth investigation of the makeup and characteristics of those companies that pursued and successfully bid on federal work contracts. This report represents an important piece of data for any small business looking to expand existing business through the procurement of federal contracts.

The Report on Federal Work Contract Procurement

The SBA negotiates the goals for contract procurement with federal agencies and small businesses throughout the U.S. In the role of negotiator, the SBA seeks to make the federal contract procurement goals a reality for underrepresented small business owners such as women, veterans, minorities, and small businesses located in underutilized business zones.

The main call to action that came from the NDA was the need for enhanced coordination between the U.S. Department of Defense (DOD) and the SBA’s Independent Office of Advocacy. This is significant because the DOD is responsible for a substantial amount of federal contracts awarded to businesses throughout the U.S.

The report revealed four main trends in the procurement of federal contracts. First, it was revealed the federal contract procurement was extremely concentrated in the industries of construction, professional, scientific and technical services, manufacturing, administrative support, remediation solutions, and waste management.

Second, out of these main industries, small businesses were most successful at obtaining construction awards. In fact, the report states that almost 45 percent of federal construction contracts are awarded to small businesses.

Third, small businesses were increasingly procuring federal contracts in top sectors such as manufacturing. The study believes that the increased procurement of contracts in top sectors will be very important in improving the quality and rate at which small businesses obtain federal work contracts.

Fourth, the report found that more enhanced market research and data was still required to assist in the matching of small businesses’ capabilities with federal contract procurement guidelines and regulations.

The report discovered that small businesses are being underutilized in terms of how much money they are awarded for contracts, and not as much in the overall amount of small businesses being granted federal contracts. A direct correlation was discovered between those high small business procurement rates and also high registration rates with the federal System for Award Management (SAM), the federal databased where businesses seeking to procure federal contracts register.

If you are interested in procuring a government contract, or have any other business law questions, we can help. Contact the Illinois small business law attorneys at the Gierach Law Firm for professional assistance.