Decrease in First-Time Federal Small Business Contractors

Decreasing numbers of first-time federal vendors in three closely watched small business categories; small disadvantaged businesses, women-owned small businesses, and companies in Historically Underutilized Business zones, are sparking worries about federal agencies’ ability to attract and retain a diverse supplier base. A House passed bill (H.R. 7988) by Rep. Stauber (R-MN) would require the SBA to add counts and achievement scores for new market entrants broken out by agency to its annual scorecard. Additionally, the House-passed fiscal 2025 defense authorization bill (H.R. 8070) would direct the Defense Department to take several steps to attract small businesses. Those steps are in addition to the solutions suggested in the National Defense Industrial Strategy, which includes accelerating payments to small businesses; putting pressure on large prime contractors to meet small business subcontracting plans; attracting participation from companies in commercial industries not traditionally involved in defense work; and expanding loan and innovation programs.