Statement by Administrator Guzman on SBA-Proposed Reforms to Increase Equity in Federal Buying
[ Article was originally posted on www.sba.gov ]
“President Biden issued a powerful challenge in Tulsa earlier this year to harness the buying power of the U.S. government—the largest purchaser of goods and services in the world—to invest in equity and open doors of opportunity to America’s 32.5 million small businesses and innovative startups, including many more underrepresented entrepreneurs and small businesses in underserved communities,” said Administrator Guzman. “Today’s historic release of federal contracting data disaggregated by race, ethnicity, and geography, and our corresponding reforms to federal strategic sourcing strategies known as ‘category management,’ will help guarantee greater transparency and accountability in federal contracting and put more small businesses in a position to start doing business with the United States government.”
Among the key policy modifications recommended and advocated for by the SBA are changes to the government’s approach to encourage and score 24 federal agencies to bundle contracts. Over the last five years, this system, called Category Management, has favored major corporations and made far too many contracts out of reach for small businesses, which has a far-reaching impact on the U.S. economy. Today’s changes will help increase contracting opportunities for over 30,000 underserved small businesses and give America’s 32.5 million small businesses a seat at the table by making the SBA a voting member of the Category Management Leadership Council, the interagency governing body that oversees contract bundling activities.
In addition to changes to category management, the Administration is unveiling fiscal year (FY) 2020 disaggregated contracting data - analyzed by the SBA – which tracks the Federal Fovernment’s contracting with small and minority-owned firms and breaks that information down across several racial and ethnic categories - a move Administrator Guzman has consistently pushed for to create transparency and accountability in contracting. Under the previous Administration, more than 80 percent of small businesses – half of which were from historically disadvantaged socioeconomic groups – had been nearly left out of the federal contracting space, losing billions of dollars in opportunities every year.
“As a first step to creating meaningful change, the SBA and its Office of Government Contracting and Business Development have worked closely with the White House, the Office of Management and Budget, and the Department of Defense to lead the effort across all of government to reform category management, the Federal Government’s buying strategy for managing the purchase of goods and services,” added Bibi Hidalgo, Associate Administrator for SBA’s Office of Government Contracting and Business Development. “These reforms, which take place immediately, will ensure agencies are not docked for contracting with a socioeconomic business and will begin to reverse the decline of our small business industrial contracting base. We know that small businesses are agile and innovative, and we must continue to widen the door of opportunity so that all federal agencies can take full advantage of the talents and ideas in every corner of the contracting community.”
About the U.S. Small Business Administration
The U.S. Small Business Administration makes the American dream of business ownership a reality. As the only go-to resource and voice for small businesses backed by the strength of the Federal Government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.
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