Small business grants reach a new peak in 2024 as per agency decisions
The Small Business Administration (SBA) has announced its annual scorecard, revealing that federal agencies awarded more than 28% of all eligible prime contracts to small businesses in fiscal year 2024, setting a new record. Agencies spent a total of $183.5 billion with small firms, surpassing the 2023 record by $5 billion.
This achievement includes contracts awarded to all small business socioeconomic categories, such as Small Disadvantaged Businesses (SDB), Women-Owned Small Businesses (WOSB), Historically Underutilized Business Zone (HUBZone) firms, and the 8(a) Business Development program.
However, the SBA has made significant adjustments for fiscal year 2025. The goals for Small Disadvantaged Businesses have been decreased, and targets have been standardized across agencies, moving certain goals closer to historic levels rather than increasing them as was sometimes the trend.
In 2024, SDBs received $78.3 billion in total obligations, up from $59 billion in 2020 and $76.2 billion in 2023. Yet, the amount spent with women-owned small firms was "extremely underwhelming," according to Steve Koprince, a retired federal contracts attorney. SBA's data shows that women-owned small businesses won $31.7 billion in 2024, an increase of $800 million over 2023.
The number of vendors increased across all socio-economic categories except for women-owned small businesses, which saw a slight drop of about 200 companies no longer considered prime contractors. The number of small business prime contractors dropped to 60,951 in 2024, down from 61,298 in 2023.
On the positive side, over 1,000 firms became certified as HUBZone firms, setting a record for the year with the highest number of approved applications in the program's history. Governors of 19 states added over 300 rural Governor-designated HUBZones to the HUBZone map.
The performance of federal agencies in meeting their small business contracting goals is closely monitored. In 2024, 21 out of 24 agencies received an "A" or "A+" on their individual scorecard. Notably, 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.
The Protecting Small Business Competitions Act has gained support from hundreds of small firms, as they express concerns about the decrease in small business contracting goals, particularly for disadvantaged businesses. The bill, sponsored by Rep. Nydia Velázquez (D-NY), aims to codify the Rule of Two, which requires agencies to set aside contracts for small business only competitions when market research shows that there are at least two qualified bidders.
This captures the most current status through mid-2025 as per SBA announcements and federal government reports. The focus on general small business contracting, while maintaining diversity and resilience in the federal marketplace, continues to be a priority for the Office of Management and Budget.
[1] Office of Management and Budget guidance on creating a more diverse and resilient federal marketplace [2] SBA's annual report on small business contracting goals for 2025 [3] SBA's 2024 small business scorecard report [4] SBA's press release on the 2024 small business contracting achievements
- The Office of Management and Budget is focusing on creating a more diverse and resilient federal marketplace, leveraging the achievements from fiscal year 2024 where federal agencies awarded 28% of all eligible prime contracts to small businesses.
- For fiscal year 2025, the Small Business Administration (SBA) has made significant adjustments to small business contracting goals, decreasing targets for Small Disadvantaged Businesses (SDB) and standardizing them across agencies.
- In an effort to support small-business and maintain diversity, Rep. Nydia Velázquez (D-NY) has sponsored the Protecting Small Business Competitions Act, aiming to codify the Rule of Two, which requires agencies to set aside contracts for small business only competitions when there are at least two qualified bidders.
