Biden Admin reforms aim to level the playing field for small business owners

President Joe Biden and Vice President Kamala Harris on Thursday announced a package of reforms to the federal contracting process to help meet an ambitious goal of increasing the share of federal contracts with disadvantaged small businesses (SDBs) to move forward the president’s management program and increase opportunities for any underserved businesses.

The actions include, for the first time, asking agencies to increase their targets so that government-wide spending translates to 11% of procurement dollars awarded to disadvantaged small businesses, up from the previous year. current statutory target of 5%.

“This is the first step towards achieving the president’s goal of ensuring that 15% of federal contracts will go to SDBs by 2025,” the White House noted in a backgrounder.

The administration also, for the first time, called for the release of disaggregated data on federal contract spending by race / ethnicity of the business owner, which officials called a powerful transparency and managerial tool.

The administration also plans to implement major changes in the federal government’s use of “category management” to boost contracting opportunities for underserved small businesses, increase the number of new entrants to the market. federal market and reverse the decline in the small business supplier base.

Biden and Harris also adopt key management practices to foster accountability and institutionalize the achievement of small business contracting goals.

According to the backgrounder, for the first time, agencies are being asked to create ambitious goals to exceed the existing statutory target of 5% by spending 11% of government-wide procurement dollars for the fiscal year 2022 in disadvantaged small businesses.

“Small business contracting goals are a key part of our federal procurement system, determining the priorities of nearly 40,000 federal contracting officers,” administration officials wrote.

The action puts agencies on track to meet the president’s goal of increasing annual SDB spending from an average of 9.8% over the past five years to 15% by fiscal 2025 .

“The reforms we are putting in place now will help increase the amount of money going to SDBs in the years to come and will keep us on track to meet the President’s goal of an additional $ 100 billion for SDBs over the course of the year. the next five years, “he added. said the White House.

Over the next year, the federal government will also update targets for other ‘socioeconomic’ categories of small businesses, including small women-owned businesses, small businesses owned by veterans with disabilities, and businesses. HUBZone.

The administration noted that the federal government is the largest purchaser of goods and services in the world, purchasing everything from software and building construction to financial and asset management, making its purchases a powerful tool in moving forward. equity and creating wealth in underserved communities.

“Despite this, less than 10% of total eligible contract dollars from federal agencies typically go to disadvantaged small businesses, a category under federal law in which businesses owned by Blacks, Latinos and other minorities are presumed to qualify, ”the White House said. “Plus, while women own about 20% of all small businesses in the economy as a whole, less than 5% of federal contracting dollars goes to small businesses owned by women. Increased federal spending with underserved businesses is not only helping more Americans achieve their entrepreneurial dreams, but also narrows lingering wealth disparities. “

According to a new analysis by the White House Council of Economic Advisers, based on data provided by the Small Business Administration (SBA), differences in business ownership account for 20% of the wealth gap between average white households and black.

For this reason, on the June 1 centenary of the Tulsa race massacre, Biden announced a bold new goal: to increase the share of contracts going to underprivileged small businesses by 50% by 2025 – an unprecedented goal that should translate into an additional $ 100 billion. to bathrooms over five years.

The White House said the announcement was based on Day 1 Presidential Executive Order 13985, which directed agencies to work to make procurement opportunities more readily available to all eligible companies and remove barriers. encountered by underserved people and communities.

Additionally, on November 18, the Biden administration launched its Vision for the President’s Management Program (PMA).

The PMA’s third priority – managing government affairs to rebuild better – recognizes that fostering lasting improvements to the federal procurement system can create opportunities for underserved communities, the White House noted.

The PMA Vision states, “By creating more opportunities for all types of underserved businesses and entrepreneurs to compete for federal contracts, the federal market can serve as a platform to create a more equitable economy. “

Photo by Stacy M. Brown

Stacy M. Brown

I’ve worked for the Los Angeles Daily News, LA Times, Gannet, and Times-Tribune, and contributed to the Pocono Record, New York Post, and New York Times. TV news opportunities include: NBC, MSNBC, Scarborough Country, The Abrams Report, Today, Good Morning America, NBC Nightly News, Imus in the Morning and Anderson Cooper 360. Radio shows like Wendy Williams Experience, Tom Joyner Morning Show and the Howard Stern Show also gave me the opportunity to share my perspective.

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