FACT SHEET: Biden-Harris Administration Announces New Actions to Expand Small Business Access to Federal Contracts
Office of Management and Budget guidance expands access for small businesses to high value and high use contracts; Small Business Administration revamps mentoring programs for underserved businesses interested in doing business with the government and releases new demographic data on government contracts
Today, the Biden-Harris Administration announced its latest actions to expand access for small businesses to the over $700 billion spent through federal contracts each year, particularly for those owned by individuals from underrepresented communities. The federal government is the largest purchaser of goods and services in the world, making federal contracts a powerful tool to build wealth in underserved communities and ensure that the federal government is leveraging talent from all corners of the country. These new initiatives will advance the President’s Investing in America agenda and bold goal of increasing the share of federal contracting dollars going to small businesses owned and controlled by socially and economically disadvantaged individuals (SDBs) to 15% by Fiscal Year (FY) 2025, a 50% increase from spending levels when he first took office.
In each of the last three fiscal years, the Administration has increased spending on contracts to small businesses on the way to this goal, with small businesses receiving nearly $163 billion in federal contracting dollars in FY 2022, $70 billion of which was earned by SDBs. Supporting small businesses and giving entrepreneurs the tools to thrive is a key pillar of Bidenomics. Under President Biden, a record 16 million new business applications have been filed, while the share of Black households owning a business has more than doubled, and the share of Latino households owning a business has increased by 40%.
In 2021, President Biden took the historic step of ordering the public release of federal contract data broken down by business owner race and ethnicity to bring increased transparency to federal contracting. New data for FY22 released today shows that businesses owned by historically underrepresented groups earned more through federal contracts across every category.
The Administration continues to stand behind our programs to support small businesses, and today, the Administration is announcing new actions to help small businesses access federal contracts, including issuing new guidance to federal agencies from the Office of Management and Budget (OMB), providing new technical resources to SDBs to help them obtain contracts and expand revenue, and sharing data on federal contracts to traditionally underserved small businesses. Actions include:
New OMB guidance to all federal agencies to help more small businesses participate in high use federal contracts. Today, OMB issued guidance on strategies federal agencies should adopt so that small businesses can participate in multiple-award contracts – a contract vehicle that accounts for nearly $160 billion, or over 20%, of all federal government contract dollars. Agencies rely on multiple-award contracts because they allow agencies to meet mission needs with more timely, cost-effective and streamlined competitions. To ensure that small businesses have opportunities to participate in multiple-award contracts, the guidance encourages earlier engagement and planning for multiple-award contracts to maximize opportunities for small business contract holders; additional consideration of “on-ramps” to allow for businesses to be added during the performance period of the multiple-award contract; and the use of small business set aside orders for competition among small businesses. These changes will help more small businesses participate in federal contracts, support a and resilient federal marketplace and ensure federal contracts are best delivering for the American people.
Improved technical assistance opportunities for small businesses looking to do business with the federal government. The Small Business Administration (SBA) is announcing a slate of major improvements to the popular 7(j) technical assistance program – now called Empower to Grow (E2G) – which is available to SDBs located in areas of high unemployment or low income. The improved E2G program will offer customized one-on-one training tailored to small business needs and guide them through the process of pursuing government contracts, convening networking and matchmaking events between government agencies and prime contractors. In FY 2023, the E2G program provided support to 6,000 small businesses and helped 2,000 small businesses grow their participation in federal contracting. Small businesses that received training reported, on average, a 45% increase in annual revenue.
Today’s actions build on significant steps the Biden-Harris Administration has already taken to support small businesses. This includes:
SBA expanded its lending program focused on underserved communities for the first time in 40 years and made critical program changes to increase lending to underserved small businesses. This fall, the SBA issued new licenses to lenders in the Small Business Lending Company (SBLC) program for the first time in 40 years. The lenders in this program have a track record of strong lending to traditionally underserved communities, and the new lenders each specialize in delivering capital to sectors and groups that face persistent capital access gaps. SBA also made critical reforms to its loan programs in 2023 that supported significant progress in addressing barriers to capital facing small business owners. In FY 2023, SBA made record gains in lending to Black, Latino, Native, AAPI, women, and veteran entrepreneurs – including $1.5 billion in loans to Black-owned businesses and $3 billion to Latino-owned businesses. Total loans and total loan dollars to Black-owned businesses more than doubled under the Biden-Harris Administration, and total loans to Latino-owned businesses doubled with total loan dollars increasing by more than 80%.
The Department of the Treasury administers $10 billion State Small Business Initiative (SSBCI). Funded by the American Rescue Plan, Treasury’s SSBCI program delivers funding to states, territories, and tribal governments that spur lending and investing in small businesses, and provides critical technical assistance. So far, Treasury has approved $7.7 billion in allocations to 54 states and territories and 25 tribal governments. In addition, Treasury announced a $75 million competitive grant program for states to provide services to help very small and underserved businesses access opportunities created by the President’s Investing in America agenda – which includes the historic investments made by the Bipartisan Infrastructure Law, Inflation Reduction Act, CHIPS and Science Act, and American Rescue Plan – by offering them technical assistance.
The Minority Business Development Agency’s (MBDA) Capital Readiness Program is investing in small business incubators and accelerators. The MBDA’s Capital Readiness Program awarded $125 million to 43 non-profit community-based organizations to help underserved entrepreneurs launch and scale their small businesses. This program, funded through the American Rescue Plan, is the largest-ever direct federal investment in small business incubators and accelerators of its kind.
SBA’s Community Navigators Program provides critical technical assistance. In December 2023, the SBA released a report that found that its more than 50 American Rescue Plan-funded Community Navigators grantees had already helped to secure more than $270 million in approved funding for small businesses, trained over 350,000 business owners, and conducted 175,000 hours of one-on-one counseling. With funding set to expire by the end of this year, the Biden-Harris Administration proposed additional funding for the program in its FY24 Budget proposal and has called on Congress to continue the program.
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