Small Businesses Actually Getting Federal Recovery Act Dollars

Small Businesses Actually Getting Federal Recovery Act DollarsFinally, there’s some good news coming out of Capitol Hill about federal government contracting and small businesses. Government Executive reports more than $1 of every $4 spent on federal Recovery Act contracts so far has gone to small businesses.

According to what Joe Jordan, Associate Administrator for Government Contracting Business Development at the Small Business Administration, told a Senate panel, as of October 2, nearly 26 percent of stimulus contracts had been awarded to small businesses. Not every agency has fallen in line though; a few large agencies are lagging in awarding contracts to small firms. But the overall picture is positive.

The general guidelines request federal agencies follow the government’s overall goal that 23 percent of prime contracting monies be directed to small companies. (The Recovery Act does not specify a goal for small-business contracting.) Achieving that 23 percent goal means about $13 billion of the approximately $60 billion in stimulus-related federal contracts would go to small businesses.

And the good news doesn’t stop there. In addition to the positive results for small business in general, some specific small-business subcategories are doing exceptionally well in garnering government stimulus contracts. Jordan reported that small disadvantaged businesses have so far received 11 percent of stimulus contracts-more than the goal of 5 percent. Businesses owned by service-disabled veterans and businesses located in HUB Zones (historically underutilized business zones) have received 4 percent and 7 percent of stimulus contracts, respectively-more than the 3-percent goal.

Unfortunately, one category that’s falling short is women business owners. Women-owned businesses have gotten 4 percent of federal stimulus contracts so far, but the overall goal is 5 percent. To help improve those numbers, the SBA has launched its first online training module for women in contracting.

One surprise is that the Defense Department, which typically falls short in awarding contracts to small business, has awarded some 58 percent of its Recovery Act contracts to small firms. Among the agencies falling behind in awarding contracts to small businesses: the Energy Department’s Office of Environmental Management, the Social Security Administration, and NASA.

The Senate Small Business and Entrepreneurship Committee is keeping on top of the situation to ensure that small businesses don’t get shortchanged. “We cannot wait until the money is spent to start evaluating whether small businesses are being included,” said Chairwoman Mary Landrieu (D.-LA). She has asked each agency that gets Recovery Act funds for a rundown of their contracting numbers by the 15th of each month.

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About the Author: Rieva Lesonsky is CEO of GrowBiz Media, a content and consulting company that helps entrepreneurs start and grow their businesses. A nationally known speaker and authority on entrepreneurship, Rieva has been covering America ‘s entrepreneurs for nearly 30 years. Follow her on Twitter @Rieva and visit SmallBizDaily to read more of her insights on small business.


Rieva Lesonsky Rieva Lesonsky is a Columnist for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her blog, SmallBizDaily, to get the scoop on business trends and free TrendCast reports.

5 Reactions
  1. Hi Rieva!
    Thank you for this important news…

    Now, can you see what you can do about the franchise start-up side of small business? We need a little help.

    The Franchise King
    Joel Libava

  2. Good to hear some positive news amongst the naysayers and critics.

  3. Last year I contacted the SBA and was told that the only group in Arizona helping small businesses get government work was for Native Americans. A lot of help that was.

  4. Hi – I believe this is a nice start, however, as the owner of 2 small manufacturing businesses, we cannot even begin to to the the bank for loans on equipment, etc. if we don’t have customers! Along with helping ease lending to small businesses, they need to stimulate the end user – everyone’s customer! Then we will be willing to risk our homes again to borrow from the bank! Thanks and keep up the fight! JoAnn

  5. I think this is a great sign and a good first step. We need to keep up the pressure, tell our elected representatives what we need. But we have to do our part. Invest in new equipment, shop locally, pay our employees fairly. If we’re all on the same page, the economy will recover and small businesses will soar.