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SBA Releases its Small Business Contracting Scorecard

On May 18, 2017, the Small Business Administration (“SBA”) released its annual small business contracting scorecard. This scorecard is a measure of how selected agencies are doing in regard to meeting their small business contracting goals. It should be noted that the scorecard only measures the performance of 24 agencies. Thus, it does not evaluate how all agencies are doing in meeting their small business goals.

As described by the SBA, the annual Scorecard is an assessment tool which measures:

(1) how well federal agencies reach their small business and socio-economic prime contracting and subcontracting goals; and

(2) agency-specific progress in meeting their Small Business Utilization Plans.

Each agency’s scorecard grade consists of its achievements in three areas: prime contracting achievement (80%), subcontracting achievement (10%) and plan progress (10%). In regard to plan progress, SBA uses seven “success factors” such as commitment to small business utilization, bundling avoidance, mitigation and justification, and training of acquisition staff.

In accordance with 15 U.S.C. §644, there are government-wide goals for the award of procurement contracts to small business (“SB”) concerns (23%), Service-Disabled Veteran-Owned Small Businesses (“SDVOSB”) (3%), Small Disadvantaged Businesses (“SDBs”) (5%), the Historically Underutilized Business Zones (“HUBZone”) SBs (3%), and Women-Owned Small Businesses (“WOSB”) (5%). These percentages relate to the value of all prime contracts and subcontracts, except for small business concerns where the percentage relates only to prime contracts.

Note that there is no goal for 8(a) concerns. Instead, 8(a) concerns are included in the SDB goals although there is no contracting program for SDBs like there is for 8(a) concerns. Further, while the Federal Acquisition Regulation (“FAR”) has separate requirements for awarding contracts to WOSBs and Economically Disadvantaged WOSBs (“EDWOSBs”), the WOSB goals include both WOSBS and EDWOSBs. Finally, veteran-owned small businesses (“VOSBs”) are not included in this calculation although prime contractors are to include goals for subcontract awards to VOSBs in their small business subcontracting plans required by FAR 52.219-9.

In addition to the government-wide goals, each agency is required to negotiate agency-specific goals with the SBA for each category of small business listed. These goals are negotiated every two years. The scorecard measures agency compliance against these agency-specific goals, with an overall comparison against the government-wide goals.

For 2016, 19 of the 24 agencies evaluated received overall scores of A. None received lower than a C.

In regard to overall goals, the agencies exceeded their goals for awards to small business concerns, SDVOSBs and SDBs, but did not meet their goals for WOSBs and HUBZone SBs.

As for individual agencies, by far, the Department of Defense (“DoD”) had the most procurement dollars in 2016 with $252 billion in procurement contracts. This was well over half of the $411 billion procurement dollars spent in 2016 by the 24 agencies. The agency with the next largest amount was Energy with only $26 billion. Like the government as a whole, DoD exceeded its contracting goals except in regard to WOSBs and HUBZone concerns.

Because the scorecard is based on annual achievements, it does not shed much light on the effect the Supreme Court’s June 2016 decision in Kingdomware will have on the amount of awards going to SDVOSBs. In Kingdomware, the Court was faced with the question of whether the Department of Veterans Affairs (“VA”) statutory preference for awards to SDVOSBs applied to orders placed against General Services Administration Federal Supply Schedule contracts. In the Supreme Court’s opinion, it does. Therefore, it will be interesting to see what impact this decision has on the VA’s scorecard in the coming years. Although the Kingdomware decision dealt with a statute that applies only to the VA, it is our understanding that the SBA is examining it to determine if any changes should be made to its rules.

A complete copy of the scorecard can be found on the SBA website.

If you have any questions or concerns about the information discussed above, please do not hesitate to contact one of our experienced GovCon professionals for assistance.

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