The Department of Energy Ranks Among Top Agencies Exceeding FY 2023 Small Business Contracting Goals

The Department of Energy (DOE) awarded a record high of $12B in SB contracting dollars last year, contributing to the federal government’s historical level of $178B. This earned the Department an “A” rating for the eighth consecutive year, reflecting its commitment to SB utilization.

According to the Small Business Administration (SBA) Annual Small Business Procurement Scorecard released April 29, DOE spending increased about $2B above FY 2022. This contributed to the Department achieving 116% of its overall goals and placed it among three other agencies earning A’s for reaching between 100% and 119% of their goals.

The annual SBA Small Business Procurement Scorecard measures how effectively federal agencies reach their small business prime contracting and subcontracting goals. The assessment also measures the distribution of those awards among small, disadvantaged businesses (SDB), women-owned small businesses (WOSB), service-disabled veteran-owned small businesses (SDVOSB), and small businesses located in Historically Underutilized Business Zones (HUBZones). The SDB category also includes minority-owned companies. The score calculation methods are available here.

SBA Administrator, Isabel Casillas Guzman announced last week that federal SB spending increased by $15.7B and reached an all-time high of 28.4%, exceeding the 23% goal.

“The Biden-Harris Administration is proud of the federal government’s record-high of $178.6 billion in contract spending with small businesses, including veteran-owned and small disadvantaged businesses, while also continuing to make significant strides in contracts to HUBZones and women-owned businesses,” Guzman said.

DOE Prime Contracting Performance

DOE’s contribution to this included awarding $10.4B (23.96%) in SB prime contracts, and $1.9B (50.2%) in SB subcontracts, exceeding the 17% and 49% respective goals. Despite these successes, the scorecard showed the Department continues missing the mark for its WOSB, SDVOSB, and HUBZone prime contracting goals. The charts below show current and historical prime contracting performance over the past three fiscal years.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DOE Subcontracting Performance

DOE performed stronger in SB subcontract spending and exceeded goals in all four socio-economic categories: WOSB and SDB 5%, and SDVOSB and HUBZone 3%. This is unsurprising as the agency’s large management and operations contracts and remediation contracts included substantial subcontracting requirements. FY 2023 subcontracting awards were SDB $505.4M, WOSB $461.6M, SDVOSB $166.6M, and HUBZone $203.7M. The SBA also recognized DOE for going above and beyond the small business goals by obligating more than $1.4B in Financial Assistance Obligations and more than $71M in non-appropriated. The scorecard does not measure these awards. The Agency’s commitment to small business utilization remains evident in the current and 10-year historic spending trends below.

 

 

 

 

 

 

 

 

 

Contractor Implications

The DOE overall score reflects the agency’s continued commitment to small business. However, the agency continues underachieving on prime contract awards to WOSBs, SDVOSBs, and HUBZone firms. Recent SBA initiatives will help DOE and other federal agencies improve SB participation by ensuring small firms in underserved communities can compete. In addition to the Bipartisan Infrastructure Law, the CHIPS and Science Act, the SBA initiatives include:

• Providing guidance on “Creating a More Diverse and Resilient Federal Marketplace through Increased Participation of New and Recent Entrance.” The Supplier Base Dashboard will encourage new entrants to the federal procurement arena and track participation.
• Issuing Office of Federal Procurement Policy directives to apply the small-business Rule of Two when using multiple-award contracts. The Rule states a small business must receive a purchase if two or more small businesses can do the work. This will increase small businesses’ access to competition on those contracts. 
• Launching the “Empower to Grow” program to strengthen SDB contractor readiness. The program includes training, coaching, and tools to assist these firms in preparing for federal contract competitions.
• Revising small business procurement methods to track and evaluate socio-economic contracting goals and reforming the Category Management program.
• Increasing contracting opportunities for 8(a) certified SDBs through special contract procedures for 8(a) firms competing on the GSA Multiple Award Schedule.
• Reviewing and revising current small business size standards.

Going forward

For FY 2024, the National Defense Authorization increased the prime contracting and subcontracting goals for SDVOSB’s to 5%, and the Office of Management and Budget set an FY 2024 federal collective goal for SDBs at 13% with plans to increase this to 15% by FY 2025. FY 2024 Goals are:

• SB: 4.5%
• SDB 13%
• WOSB: 5%
• SDVOSB: 5%
• HUBZone SB: 3%.

Small business firms in these categories should capitalize on the new initiatives and DOE's need to strengthen their SB prime contracting awards. Winning a spot on the GSA MAS catalog will provide government-wide opportunities and increase presence and competitiveness in the federal contracting space. Proactive marketing to the Offices of Small and Disadvantaged Businesses can also impact final decisions on whether contracts are set aside for small businesses.

GovWin offers numerous resources to enhance small business competitiveness including federal market reports and webinars on Strategic Planning, Capture Planning, and Proposal Writing. Visit GovWin’s Contracting Market Analysis and  GovWin’s Events and Training Calendar sites to tap into these resources.