February 3rd 2024.
The U.S. Small Business Administration is hoping to provide billions of dollars in federal contracting opportunities to Black businesses annually, following a successful year of record-breaking numbers. This increase in funding could be made possible through an upgraded government contract training program and other efforts.
The SBA has recently revitalized its SBA 7 Training Program, now renamed as Empower to Grow, with the goal of improving the readiness of small, disadvantaged businesses for federal contracting. According to an SBA press release, this revised program is just one part of the Biden-Harris Administration's efforts to expand small business access to federal contracts.
In fiscal years 2022 and 2021, small businesses in nearly every demographic saw a significant increase in federal contracting dollars. The Biden-Harris administration has also announced actions to support small businesses and build wealth in underserved communities, recognizing the federal government as the largest purchaser of goods and services worldwide. The White House has specifically mentioned the E2G program as a part of these efforts.
President Joe Biden has set a goal of awarding 15% of federal prime contracts to small, disadvantaged businesses by fiscal year 2025 – a 50% increase from when he first took office. This increase could potentially result in a $100 billion boost for minority-owned and underserved businesses.
The SBA reports that the E2G program has already led to a half-billion-dollar increase in federal contracts going to Black-owned small businesses in 2023. SBA Administrator Isabel Casillas Guzman states that small business growth is crucial for job creation and strengthening communities, which is why the Biden-Harris Administration continues to prioritize equity and a level playing field for all small business owners.
The latest data from the SBA shows that Black-owned small businesses received $9.5 billion in federal contracts in 2022, a $490 million increase from the previous year. Native American businesses saw an even more significant increase of $1.62 billion, with $19 billion in federal contracts awarded in 2021. However, these numbers are still relatively small compared to the total amount of federal contracts awarded that year, which was almost $163 billion.
According to an SBA spokesperson, there are existing disparities that the agency is working to address. These disparities include barriers for entry for Black businesses seeking government contracts, such as the weight given to past performance in contract decisions. The SBA is adding more resources to help disadvantaged business owners, including Black-owned firms, overcome these barriers.
The revamped E2G program offers customizable one-on-one coaching to meet Black business owners' specific needs and help them start or grow their contracting revenue. The program also provides tools and resources for accessing state and local bid opportunities, including market intelligence, training, and technical assistance. This matchmaking process aims to connect Black-owned firms with more state and local contracting opportunities.
Data shows that the number of Black families reporting business ownership has doubled from 4.8% in 2019 to 11% in 2022. The SBA says that the program's impact on contracting dollars for Black-owned businesses will depend on how many businesses choose to participate. However, the agency reports that contractors using the 7 services in the past have had a bid win rate of around 60%, which could increase with the added resources and emphasis on E2G.
Business leaders have praised the rebranded small business program, and more details can be found in the comments section of the SBA's website. This revamped program is just one of the many steps being taken by the Biden Administration to support and empower Black-owned businesses, with SBA loans reaching a milestone of $1 billion. The agency and the White House are working together to achieve their goal of eclipsing the record for federal contracting with Black businesses, ultimately leading to more opportunities and growth for underserved communities.
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