Small business prime awards fell in fiscal 2025
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By
Ross Wilkers
The Small Business Administration releases its newest annual grading of how agencies worked to meet their small business contracting goals.
Agencies exceeded the government-wide goal of awarding 23% of prime contracts to small businesses in federal fiscal year 2025, even as total dollars fell and storm clouds loom over this portion of the market.
The Small Business Administration released its annual procurement scorecard Thursday, which evaluates how agencies work to fulfill their small business contract goals. SBA found the share of prime contracts to small firms hit 28% in FY 2025, representing the government’s third straight year of hitting that figure.
Total prime contracting dollars fell 2% year-over-year to $183.5 billion, while activity in every socio-economic category also declined in terms of both percentage and total dollars awarded.
The overall number of small business contractors also declined 6.9% from the prior fiscal year to 56,725.
Prime awards to small disadvantaged businesses noticeably fell in FY 2025, which can be attributed to the Trump administration’s scrutiny on the 8(a) program and overall contracting activity with SDB companies.
SBA’s audit of the 8(a) program has resulted in the removal of around 800 companies, whom the agency claims did not turn over financial and other records for review. That amounted to an 18% reduction of 8(a) participants.
The Trump administration also reduced the SDB goal back to the 5% statutorily required figure in January, whereas the Biden administration had set a goal of 15%.
Awards to SDB companies in FY 2025 totaled $75.3 billion to represent 11.6% of all prime contracts, compared to FY 2024’s respective figures of $78.3 billion and 12.3%. Awards to 8(a) firms fell 5.8% year-over-year to $24.3 billion.
In addition to award activity, the number of SDB companies in the market declined 4.7% year-over-year to 23,129.
Agencies fell just short of the 3% goal for awards to HUBZone firms, who received 2.6% of all prime contracts. Awards to woman-owned firms came in at 4.2%, below the goal of 5%.
Agencies did meet the goal of awarding 5% of prime contracts to service-disabled/veteran-owned small businesses, who received $32 billion in awards.
The General Services Administration received an A-plus grade for its small business activity, as did the departments of Commerce and Housing and Urban Development.
NASA, the National Science Foundation and Social Security Administration each received “B” grades for not fully achieving their goals. The remaining agencies SBA looked at all received “A” grades.