Is COVID-19 Affecting Small Business Awards?

While we know that both small and large businesses alike, especially within the services industry are taking a HUGE hit due to COVID-19, how is overall small business spending faring within the federal government?

Open, close, open, close, only outdoor patronage. These are common themes that are going on right now in the U.S. in regards to how restaurants, salons and gyms can operate. It is taking a huge toll on the businesses, economy and mental health. We hear about this daily on the news. I wanted to take a look at other trends that may be occurring due to the pandemic — specifically overall small business spending within the federal government. Let’s take a look at a few different agencies to start —

Treasury In Q3 of FY19, there were 2,358 actions totaling $420,835,425 awarded to 1,021 small businesses. During this same time period in FY20, there have been 2,781 actions totaling $988,887,436 awarded to 1,079 small businesses. This trend actually seems promising as actions, dollars and number of companies have all increased. Dollars were doubled during the same Q in both FY. Let’s take a look at another agency for comparison.

DHS In Q3 of FY19, there were 9,888 actions totaling $1,600,871,747 awarded to 3,553 total companies. Within the same time period this FY, there have been 9,260 actions totaling $1,966,771,591 awarded to 3,404 small businesses. In this case, the dollars have increased while the actions and number of companies have remained relatively the same. Let’s take a look at one last agency for comparison, HHS.

HHS We all know that most COVID-19 spending is coming from HHS, VA and Defense agencies. Has small business spending increased at HHS since FY19? In Q3 of FY19, there were 9,683 actions totaling $1,337,318,043 awarded to 3,099 small businesses. During this same time period this FY there have been 10,306 actions totaling $2,694,515,944 awarded to 3,235 small businesses. As you can see there have been increases in all three areas, # actions, $ and # of companies. How much of this small business spending is actually directly related to the virus? Interestingly, only 6.5% of the actions, 31% of the dollars and 10% of the companies are going toward COVID-19 at HHS. That is a good amount of the dollars but the rest is relatively low.

So what does this tell us? In my opinion, if you can break into the federal market as a small business right now, it is the place to be. Regardless of whether or not you are selling goods/services to support the pandemic. The government still has to meet its small business goals. Certainly, if you are selling goods/services to support COVID-19 relief efforts that is a plus. These numbers also don’t take into account the small businesses that are performing subcontract work.

I wanted to take another look at spending related to small businesses and this time government wide. In Fedmine, we have a report titled First Timers — this report shows companies who are winning a contract for the first time with the federal government. They may be a startup or an established company within the commercial sector, but regardless, this is the first time they are winning a PRIME contract award from the federal government.

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We work with a company who helps small businesses register with SAM. All businesses must register with SAM in order to work with the government. This company is Federal Award Management Registration. I meet with them monthly and since the pandemic they have been BUSY, busier than usual. I thought about it and its because so many businesses are now pivoting and trying to provide a different good or service that supports the pandemic. The first timers report is a great way to show how many new businesses are entering the market. Last FY, there were 7,223 small businesses that won a contract for the first time, this FY there are already 5,244. We still have one whole Q of spending AND there is always a 90 day lag with Defense reporting. At this time last FY, there were only 4,870 small businesses who won an award for the first time.

 What does it all mean? Like I said above, the pandemic does not change the fact that agencies need to meet their small business goals. Based on what I’ve outlined, it actually seems that small business spending as well as awards made to new small businesses are increasing. A bit of good news amongst it all. 😊 Hopefully by this time next year this pandemic will be well behind us.

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Lindsay Carry

Written by Lindsay Carry