Opinion: Coast Guard Head of Contracting Activity Michael Derrios on Why Federal Small Business Spending is Flat

“Have you ever had one of those moments where your eyes are scrolling the screen carefree on an article and then, for some reason, you feel the need to scroll back up – several times – and re-read the content because you saw something that, at first glance, would have ordinarily gone unnoticed but your subconscious forces you to focus on it because something doesn’t seem quite right? While doing research recently for another upcoming blog post, I stumbled across some statistics that were really a head-scratcher for me and caused that very reaction. While Fiscal Year 2019 is still fresh out of the oven, and federal procurement stats are still being calculated, I found this article from earlier in the year that offered some trend data from the last five fiscal years (2014-2018) and two very important pieces of information stood out to me. Small business spending has remained relatively flat while the amount of money the Federal government spends on contracts has increased every year.

The Federal government, including both DoD and Civilian agencies, increased spending on contracts at an average rate of 5.8% annually between fiscal years 2014-2018, with almost $560 billion spent in 2018, which nearly matches a high of $562 billion in 2010. But as federal contract spending rose, between those same fiscal years the share that was won by small businesses hovered around 22% each year. So, from 2014 to 2018 there was a $112 billion uptick in overall federal spending but the amount that went to the small business community didn’t see any commensurate hikes. Am I the only one that finds that counterintuitive? At the U.S. Coast Guard, I’m responsible for an annual average spend of $3 billion…” Read the full article here.

Source: Why Is Federal Small Business Spending Flat? – By Michael W. Derrios, December 8, 2019. Michael W. Derrios.

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