Federal Administrations Establish Record-Breaking Small Business Honors in 2024
In a significant stride towards supporting small businesses, the federal government awarded a record-breaking $183.5 billion to small firms in 2024, accounting for 28.35% of total eligible contracting dollars. This figure marks a new high, surpassing the previous year's total by $4.9 billion [1].
The year 2024 also witnessed a record number of over 1,000 firms becoming certified as HUBZone firms, setting a new benchmark for the program's history [2]. The HUBZone program, designed to aid and empower small businesses in historically underutilized business zones, saw an increase of $100 million in contracts awarded to HUBZone firms compared to the previous year [3].
However, the current federal goal for Small Disadvantaged Businesses (SDBs) in federal contracting stands at 5% of prime contract dollars, a reduction from the previous 15% goal under the Biden administration. This shift has raised concerns among some senators and advocates who view it as potentially undermining minority and disadvantaged entrepreneurs [4].
Despite the revised goals, agencies performed admirably in meeting small business contracting targets. In 2024, agencies awarded more than 28% of all eligible prime contracts to small businesses, with spending on SDBs reaching $76.2 billion, surpassing the 12% goal that was effective at that time [2].
Agencies were graded on their small business contracting performance, including SDB contracting, via the SBA’s Small Business Procurement Scorecard. Many agencies, including the Small Business Administration (SBA), the United States Department of Agriculture (USDA), and the Department of Homeland Security (DHS), received top grades such as A+ and A for their performance in 2024 [1][2].
The Biden administration had initially set a 13% goal for small disadvantaged businesses, aiming to push the government-wide goal to 15% by 2025. However, the new SBA goals introduced in 2025 have significantly decreased the target for SDBs to 5%, while other small business categories have seen less dramatic changes or even increases in some agency-specific goals [1][3].
The Office of Management and Budget (OMB) issued guidance in 2024 on creating a more diverse and resilient federal marketplace through increased participation of new and recent entrants. Additionally, the Protecting Small Business Competitions Act, sponsored by Rep. Nydia Velázquez (D-NY), aims to codify the Rule of Two, requiring agencies to set aside contracts for small business only competitions when there are at least two qualified bidders [5].
The record-breaking figures for small business contracts in 2024 come as hundreds of small firms expressed their support for the Protecting Small Business Competitions Act, stating it is "timely and necessary" [5]. The ongoing debate surrounding the effectiveness and equity of the revised goals for SDB contracting continues, with concerns about the potential impact on disadvantaged businesses [4].
The federal government's $183.5 billion allocation to small businesses in 2024, a significant portion of which was awarded to HUBZone firms, reimagined the federal workforce by fostering growth in small, historically underutilized businesses. This shift in focus, however, coincides with a reduction in the federal goal for Small Disadvantaged Businesses (SDBs) in federal contracting, from 15% under the Biden administration to 5%, which has sparked discussions about the potential impact on finance and business operations for these companies.
