So far, we have reviewed the procurement trends for small businesses, 8(a), HUBZone and SDVOSB. Overall, it has been very discouraging. The only program doing well so far has been the Service-Disabled Veteran-Owned Small Businesses. But hold your horses we have not discussed the Woman-Owned Small Business Program. Are you an Economically Disadvantaged Woman-Owned Small Business? Don’t fret, as we will be including you in today’s episode. But before we delve into the trends let’s start by looking at government contracting overall.
Federal Government Contracting Trends
First, we need to look at government contracting trends overall before we delve into the WOSB set-aside program. The average contract spending over the last ten years has been $492 Billion. Based on the Chart in Figure 1, we see that contract spending hit a high in 2010 of $561 Billion. Then it started a downward trend until 2015 where it bottomed out at $409 Billion. From 2015 till 2018 it started its upward trend again. 2019 numbers have not been finalized when I gathered the information from USASpending.gov. Though it is at $510 Billion so far.
What Have We Learned?
What do we know based on this chart? Well, we know that government contract spending is higher than it has in the past. For a decade now, the government has been saying that contract spending averages approximately $450 Billion. The actual average is now $492 Billion. We also know that government spending is not a constant number that is volatile just like the stock market. Now if we had just looked at the last five years, we would have saw just the increase in government spending. By looking at a decade of data we can see the ups and downs. If we had collected the data over a 20-year period we would have seen a different picture. Unfortunately, the government only tracks the last ten years.
We also know that 5% of prime contract dollars needs to be set-aside for Woman-Owned Small Business Program. By looking at the chart in Figure 1 we can expect to see a similar trend in WOSB contracting dollars. Now that we know this let’s look at the chart for WOSB.
Trends for WOSB
Before we go into detail, we must remember that there will not be any data prior to 2011. The WOSB program was not in effect at that time. We can see that the program has skyrocketed from 2011 until 2017 when it dipped and then started another upward trend. Now, this trend is not what I expected!!!
Total Contract spending showed, Figure 1, a downward trend starting in 2011 and ending in 2015. From 2015 till 2018 it was an upward trend. It started a downward trend in 2018 but rebounded in 2019. This is nothing like the trends we have seen in any of the other programs. Now we can look at the Economically Disadvantaged Woman Owned Small Business chart and see how well they faired.
Economically Disadvantaged Woman Owned Small Business
As shown in Figure 3, the Economically Disadvantaged Woman Owned Small Businesses saw their trend skyrocket until 2015 where it levels off then started a downward trend. With this program being new to the government we can understand the increase in contracting dollars. What is troublesome to me is the decrease that started in 2017. From the chart, in Figure 1 we would have expected it to continue to grow and start s a slight downward trend in 2018.
Why the significant drop off? That is a question that I don’t know the answer to. One possible reason is that the number of economically disadvantaged businesses decreased. However, I don’t believe the government tracks that data. Now the one piece of data that I have not shown yet is how WOSB compares to Small Business. Let’s look at that next.
Small Business versus Woman Owned Small Business.
Figure 4 shows a similar trend between small businesses and WOSB. This is the expected result. Since 5% of Prime contracting Dollars need to be set aside for WOSB. Overall the WOSB and EDWOSB are faring well in government contracting. This is a nice change from what we have seen with 8(a) and HUBZone programs.
The only downside has been in the EDWOSB. Without further data, we would only be speculating on what is transpiring there. Since this program is relatively new we would expect to see the numbers climbing. It will be interesting to see what transpires in the next ten years.
Overall the WOSB are receiving their share of the pie with the only decline being the Economically Disadvantaged Woman-Owned Small Business. These programs are doing better than the HUBZone and 8(a) programs. The only other program doing well is the Service-Disabled Veteran-Owned Small Business.
However, we would expect these two programs to explode as they were recently introduced. These programs have been embraced by many contracting officers. It will be interesting to see how another ten years’ worth of data reveals about the program. Meanwhile, Woman-Owned Small Businesses in the United States that perform government contracting should be rejoicing.
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