White House Publishes New Targets for Small Disadvantaged Business Contracting Goals
On October 4, 2022, Shalanda D. Young, Director of the Office of Management and Budget ("OMB") published a memorandum on increasing small disadvantaged business ("SDB") contracting goals to 12 percent of federal contract spending.
The memo says that increasing contracting dollars to SDBs provides for a "more dynamic and resilient supplier base and create opportunities for entities owned by underrepresented individuals." According to the Small Business Administration ("SBA"), in FY2021, federal agencies awarded SDBs a record $62.4 billion, which amounted to 11.01 percent of all contracting dollars.
For FY2023, the memo directs agencies and SBA to "negotiate SDB contracting goals that will allow the Federal Government to cumulatively award at least 12 percent of Federal contract spending to SDBs." The agencies to which the memo refers are the Chief Financial Officers Act agencies, 31 U.S.C. § 901, which includes, for example, the USDA, Commerce, Defense, Energy, Homeland Security, Justice, State, and Transportation; the EPA; and NASA.
The memorandum also says that OMB will continue to work with SBA (and others), and that their efforts will focus on lowering barriers to entry and creating opportunities for SDBs, WOSBs, SDVOSBs, and HUBZone concerns so that they may compete effectively for federal contracts.
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