Last week we looked at DoD Small Business set-aside sales as a whole, today we’ll take a quick look at the breakdown which includes Small Business, Small Disadvantaged Business (SDB), Women Owned Small Business (WOSB), Service Disabled Veteran Owned Business (SDVOSB), and HUBZone Small Business.
The chart above shows the total sales over the past 3 years for each of the small business set-aside sectors. These are all prime contracts such as items sold direct to the Department of Defense (DoD). Each year since 2015 the DoD awarded contract sales to each group has risen except within the HUBZone sector which has grown slowly. This is probably due to not enough HUBZone companies answering government solicitations.
The chart above shows the total DoD sales to all small business set-aside sectors for FY 2018 year to date as of June 2018. With 3 months left of the U.S. Governments fiscal year it appears that the trend is continuing as the sales relate to each sector except the overall budget is higher so we expect the totals in September 2018 to be higher than last year.
BidLink has been a leading provider of industry marketing data relating to DoD procurement for the past 18 years. Find defense contracts and research competition. Learn more at www.bidlink.net
The Geographical location of your company has an impact on winning government contracts. One of the small business set-aside programs SBA manages is the Historically Underutilized Business Zones or HUBZone. It’s a program where the U.S. Government limits competition for certain contracts to businesses located in specific regions of the country. Several sets of government data are used to help determine which areas are designated HUBZones such as U.S. Census and labor statistics data. In many cases theses areas have high unemployment rates, low household incomes, and can be located in Military base closures areas.
The HUBZone program is probably one of biggest unadvertised and underutilized programs (by government contractors) the government has based on some research we performed. It’s actually sad how few government contractors participate in the HUBZone program. If you simply look at the land mass and HUBZone maps you’ll see. The entire state of California only has 0.96% certified HUBZone companies, the entire state of Pennsylvania only 0.54% and Vermont 1.5%.
We decided to look a little deeper into the state of Vermont HUBZone companies. Currently there are 1,330 active Cage codes in the state of Vermont as of July 2018. Only 21 are of them are HUBZone certified companies a mere 1.5%. How is this possible when most of the entire state of Vermont is listed as a HUBZone? Are companies not looking to see if they reside in a HUBZone?
There are few qualifications a company must meet to be certified HUBZone. You must be a small business, your principal office must be located in a HUBZone and at least 35 percent of its employees live in a HUBZone. If you look at the HUBZone maps you’ll see if you’re located in one.
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To continue with our research we had the question – Are companies missing out on certification?
We randomly checked a few of the Non-HUBZone Cage codes and based on the companies zip codes and they all fell within in a HUBZone. So they potentially could qualify for certification if they meet the other qualifications. If the U.S. Government is offering preferential consideration, companies should at least take a look into it.
We dove a little further into this research using the BidLink database and search engine, this is where the majority of research was performed for this article. We had a few questions about the distribution or the type of company and sales they had in order to prove a few theories for the Vermont HUBZone companies.
What basic service or function did the companies provide?
Services (other than construction): 11 Companies listed
Manufacturing: 5 Companies Listed
Construction: 5 Companies listed
Which Group was most successful (sales) over the past 20 years?
Two (2) of the Five (5) manufacturing companies were very successful and currently active selling to DoD.
Both the construction and services group had little to no sales at all.
One reason why the manufacturers are successful is because when DoD buys things the location of the production facility is usually irrelevant – you ship the item to them. Whereas if you provide a service to DoD it may require you to physically be at that location to provide the service.
Currently the U.S. Federal Government’s goal is to award at least three percent (3%) of all federal contracting dollars to HUBZone-certified small businesses each year. Every day I see solicitations with HUBZone set-asides for items the DoD is looking to buy, and some cases no one answers them. Individuals or companies looking for some preferential treatment should at least check to see if you qualify for HUBZone certification.
BidLink has been a leading provider of industry marketing data relating to DoD procurement for the past 18 years. Find defense contracts and research competition. Learn more at www.bidlink.net
Over the past 3 years small businesses sales to the Department of Defense (DoD) have been steadily increasing. In fact yearly sales have risen on average 4.5 Billion dollars each year and this year it’s even higher. The chart above shows the total small business sales to DoD was $31.5 Billion dollars in 2017 compared to $39.6 Billion in sales as of June 25, 2018 up almost 26% from last year. Small businesses received $8.1 Billion dollars more in prime contracts selling to the DoD than they did last year, this trend is likely to continue till the end of the year.
Small Business set-asides are specific procurement goals which Congress puts forth under the Small Business Act in order to set-aside a percentage of U.S. Government contracts to small businesses.
The U. S. Small Business Administration (SBA) is responsible for ensuring government participation of these goals. The 2018 small business goal for DoD is to have 22% of their contracts awarded to small businesses. DoD monitors all contract awards to small business daily in order to keep meeting these goals. This chart above was created from data gathered from these awards on June 25, 2018.
The DoD budget increased by $33 Billion from 2017 to 2018 this is also an indicator for an increase in small businesses sales as the goal is based percentages of sales. In fact the DoD budget has increased by over $20 Billion dollars every year since 2015. With only 3 months of Government spending left this year in order for DoD to continue to meet their small business procurement goals they need to award more government contracts to small businesses, probably close to $20 Billion or more this year.
Meeting DoD small business procurement goals is not just a concern of the U.S. Government it should also be a concern of every small business to help them meet or exceed their goals. Actively searching for Government contracts and taking advantage of these set-asides is a crucial activity often missed even by the “seasoned contractor”. As part of research for this article we used the BidLink database and search engine reviewing NSN’s, parts which had been solicited using set-asides such as HUBZone, small business. There were government solicitations we found with no associated contract award possibly due to the fact that no companies with the correct set-aside responded. Are some of the government contractors sleeping on the job and missing these government opportunities?
BidLink has been a leading provider of industry marketing data relating to DoD procurement for the past 18 years. Find defense contracts and research competition. Learn more at www.bidlink.net
