Agencies awarded record-breaking $179B to small businesses in FY23

Small businesses received a record-breaking total of federal contracting dollars in fiscal year 2023, with more than 28% of government contract spending going to smaller companies, according to data released by the Biden administration on Monday. 

The Small Business Administration’s annual procurement scorecard found that almost $179 billion in prime contracts went to smaller companies in the previous fiscal year, an increase of approximately $16 billion from FY22. The scorecard assesses how well federal agencies are meeting their small-business goals and achievements.

The federal government was awarded an overall “A” rating on the scorecard, while 22 agencies received an “A” rating or higher. Only two agencies — the Environmental Protection Agency and the Department of Health and Human Services — received “B” grades, which were the lowest recorded. 

The government exceeded its goals for directing federal contracting dollars to several historically underrepresented groups, including setting new highs in awards given to small disadvantaged businesses and service-disabled, veteran-owned small businesses. 

Record-breaking federal contract awards were also given to historically underutilized business zone small businesses — or HUBZones — and women-owned small businesses, although the government fell short of its goal of awarding 3% and 5% respectively to these companies.

SBA determines whether companies are considered small businesses based on their total number of employees or their average annual receipts, although the agency said the determination varies by industry.

Some of the federal agencies that received the highest grade on SBA’s scorecard touted their ongoing efforts to direct contracting dollars to small businesses, with a focus on awards going to underrepresented firms. 

The Department of Homeland Security, which received an “A+” grade on SBA’s scorecard, said it awarded over 38% of eligible contracting dollars to small companies. DHS said this included awarding approximately $5 billion to small, disadvantaged businesses, citing “the department’s increased targeted small business outreach efforts, which include a focus on underserved vendor communities.”

“Our achievements are the result of collaboration between DHS leadership and the acquisition workforce,” Darlene Bullock, executive director of DHS' office of small and disadvantaged business utilization, said in a statement. “DHS will continue to implement various programs and policies to support small business participation.”

The release of SBA’s scorecard coincides with National Small Business Week and a corresponding push by the White House to highlight the administration’s efforts to support small businesses. 

The Biden administration also released its third-annual Small Business Boom Report on Monday, which outlined the White House’s progress on 35 commitments to boost small business activity across the country.