Federal Agencies Break Records with Peak Small Business Grants in 2024
In fiscal year 2024, the federal government surpassed its socio-economic goals for small business contract awards, reaching a record $183.5 billion awarded to small business prime contractors. This figure represented 28.76% of all federal contracting dollars, a significant increase from the overall small business contracting goal of 23% for that year [1].
The Small Business Administration (SBA) oversees the performance of 24 Executive Branch agencies to ensure that targets for socio-economic categories, including women-owned small businesses (WOSB), service-disabled veteran-owned small businesses (SDVOSB), and HUBZone-certified firms, are met [3]. To guarantee procurement opportunities for these designated groups, contracting officers have the authority to set aside certain contracts exclusively for them [3]. The HUBZone program, in particular, helps small businesses gain preferential access by requiring certification that the business maintains its principal office in a historically underutilized zone and employs staff from those areas [3].
The record spending in 2024 included $31.7 billion for WOSB, an increase of $800 million over 2023 [1]. Agencies also awarded a record $69.6 billion through small business set-aside contracts [1]. However, the number of vendors across all socio-economic categories increased except for WOSB, which saw a slight drop of about 200 companies no longer considered prime contractors [1].
Retired federal contracts attorney Steve Koprince expressed concern over the amount spent with WOSB, calling it "extremely underwhelming" on LinkedIn [6]. Meanwhile, the government reached its goal for awarding at least 5% of all contracts to SDVOSB [1]. NASA, the Department of Health and Human Services, and the U.S. Agency for International Development did not meet their small business goals in 2024 [4].
The Office of Management and Budget (OMB) issued guidance on creating a more diverse and resilient federal marketplace through increased participation of new and recent entrants [8]. The bill, sponsored by Rep. Nydia Velázquez (D-NY), aims to codify the Rule of Two, requiring agencies to set aside contracts for small business only competitions when market research shows that there are at least two qualified bidders [7].
The SBA reported that governors of 19 states added over 300 rural Governor-designated HUBZones to the HUBZone map in 2024, with over 1,000 firms becoming certified as HUBZone firms, setting a record for the year with the highest number of approved applications in the program's history [2].
In 2024, agencies spent $183.5 billion with small firms, topping the government's record in 2023 by $5 billion [1]. Agencies also achieved their goals for small business set-aside contracts [1]. The annual small business scorecard released by the SBA on Monday showed that agencies awarded more total dollars to companies in all socio-economic categories compared to previous years [5].
In summary, the federal government is progressing well in meeting and exceeding contracting goals for WOSB, SDVOSB, and HUBZone small businesses as of the latest FY2024 data, with ongoing monitoring and adjustments to policies intended to sustain or improve these outcomes [1][3].
[1] https://www.sba.gov/offices/headquarters/ovcd/fed-contracting/scorecard [2] https://www.sba.gov/press-office/headlines/governors-add-over-300-rural-hubzones-hubzone-map-2024 [3] https://www.sba.gov/offices/headquarters/ovcd/fed-contracting/scorecard/scorecard-executive-summary [4] https://www.sba.gov/press-office/headlines/agencies-did-not-meet-small-business-goals-2024 [5] https://www.sba.gov/press-office/headlines/agencies-awarded-record-dollars-companies-all-socio-economic-categories-2024 [6] https://www.linkedin.com/in/steve-koprince-615402/ [7] https://www.congress.gov/bill/117th-congress/house-bill/3642 [8] https://www.whitehouse.gov/omb/memoranda/2021/21-39/
- The federal workforce is making strides in achieving the socio-economic goals for federal contracts, especially for women-owned small businesses (WOSB) and HUBZone-certified firms, as indicated by the record $31.7 billion spent on WOSB in 2024.
- To further diversify the federal marketplace and ensure a resilient business environment, the Office of Management and Budget (OMB) has issued guidance, aiming to increase participation of new and recent entrants, including small businesses, in federal workforce reimagined initiatives.
