White House Announces Reforms to Increase Federal Contracting Opportunities for Small Disadvantaged Businesses

On December 2, 2021, the White House released a Fact Sheet, announcing a number of significant reforms intended to increase federal procurement opportunities for small disadvantaged businesses (SDBs), including but not limited to:

• directing agencies to more than double their annual SDB contracting goals for FY2022 to result in 11% of contracting dollars being awarded to SDBs (up from the current statutory goal of 5%) with the long-term goal of increasing SDB participation to 15% of federal contracts by 2025;
• increasing transparency through releasing on an annual basis, starting this year, disaggregated data of federal procurement spending by race and ethnicity of business owner;
• issuing revised guidance on the use of “category management” in order to decentralize federal contracting in a manner that boosts contracting opportunities for small businesses;
• tasking agencies with developing innovative strategies for increasing the number of new SDB entrants to the Federal marketplace; and
• adopting management practices intended to hold agency acquisition executives accountable for achieving small business contracting goals.

The White House further announced that over the course of 2022, it intends to provide updated procurement goals for other “socioeconomic” categories of small businesses, including women-owned small businesses, service-disabled veteran-owned small businesses, and HUBZone businesses. SBA Administrator Guzman also released a statement, emphasizing that these critical reforms are needed “to widen the door for opportunity so that all federal agencies can take full advantage of the talents and ideas in every corner of the contracting community.”

The Fact Sheet demonstrates the attention that the Administration is giving to increasing federal procurement opportunities for socially disadvantaged small businesses. Crowell & Moring will continue to monitor the developments in this area and our team is available to help companies better understand these emerging opportunities.