One of the things that has often been irksome to some of the nation’s leading small business advocacy groups is the way in which the federal government has repeatedly set goals for itself in terms of contracting with independent companies, but continually failed to reach those goals for a number of reasons. However, new data suggests that it has finally fulfilled such benchmarks.
The federal government spent some $83.2 billion on small company contracts in the most recent fiscal year, comprising about 23 percent of all federal contracts (the long-standing but rarely-reached goal in question), which themselves totaled roughly $355 billion during that time, according to a report from the Washington Post. Consequently, last fiscal year was the first since 2006 in which it reached that 23 percent level, and now it appears as though some lawmakers are poised to introduce new legislation that would further increase that goal.
U.S. Rep. Sam Graves, a Missouri Republican who chairs the House Small Business Committee, recently said that he wants that new goal set at 25 percent, which would essentially put an additional $10 billion combined into the coffers of small businesses across the country, the report said. Moreover, the government would also be required to try to urge subcontracting deals with small businesses to increase to 40 percent of all agreements made with primary contractors, up from the current 35.9 percent.
“The federal government spends nearly half a trillion dollars on contracted goods and services,” Graves said, according to the newspaper. “[W]e must ensure that the money is being spent efficiently, and small businesses have proven that they can do quality work cheaper and often faster.”
Some potential issues
However, despite this positive step forward, it seems that some experts are still wary of just how accurate the data is, the report said. In the past, it’s been difficult to determine exactly how much of that 23 percent is actually going to small businesses, as some contracts that went to larger companies in the past have been misreported as being granted to smaller ones. Further, it’s important to note that the current data is only preliminary, and won’t be finalized until later this year.
Owners worried about the ways in which they’re able to contract with the federal government to keep their bottom lines healthy might want to consider other ways of staying afloat, including finding more affordable small business insurance. Cutting costs for errors and omissions insurance, for instance, can reduce expenses by thousands of dollars per year.