Get All Access for $5/mo

U.S. Federal Spending at Small Businesses Misses Mark. Again. The Small Business Administration releases its scorecard measuring federal procurement in fiscal year 2012.

By Catherine Clifford

Opinions expressed by Entrepreneur contributors are their own.

Uncle Sam can't seem to spend enough money on Main Street.

The U.S. government awarded 22.25 percent of its contracts to small businesses in the 2012 fiscal year, which ended in September, according to a scorecard released by the U.S. Small Business Administration today. According to the Small Business Act of 1953, 23 percent of all government spending is supposed to go toward small business contracts.

The shortfall amounts to billions of dollars that are not getting into the hands of small-business owners.

Related: Still Waiting for Obama's SBA Chief Nominee

The $89.9 billion awarded to small-business contractors in 2012 is 22.25 percent of more than $400 billion spent by the U.S. government that year. That's a slight increase over the 21.65 percent of spending that went to small businesses in 2011, but lower than the 22.66 percent that went to small-business contractors in 2010, according to SBA scorecards.

Pressure on Washington, D.C., to cut its overall spending has resulted in fewer government contracts available for all businesses, says John Shoraka, associate administrator for government contracting and business development at the SBA, in a conference call with reporters. "The overall pie of dollars for small businesses is down, but the portion of that pie that is available to small-business owners is up," Shoraka says of the U.S. government's improved performance from 2011 to 2012.

Related: Women Entrepreneurs Can Win Larger Contracts Through SBA Set-Aside Program

Meanwhile, House Small Business Committee Chairman Sam Graves (R., Mo.) lambasted the Obama Administration for its failure to meet the small-business contracting threshold. This is the seventh year in a row the small-business contracting target has been missed, according to a statement from the House Small Business Committee.

"The fact that the federal government hasn't met this meager 23 percent small-business contracting goal for seven years is simply unacceptable, and further proof that our government continues to give lip service to small companies," says Graves in a statement. "Improving small-business opportunities through federal contracts creates jobs and saves taxpayer money because small businesses bring competition, innovation and lower prices."

Related: SBA Secures Pledge from Banks to Lend More to Veteran Entrepreneurs

Catherine Clifford

Senior Entrepreneurship Writer at CNBC

Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick


Are Your Business's Local Listings Accurate and Up-to-Date? Here Are the Consequences You Could Face If Not.

Why accurate local listings are crucial for business success — and how to avoid the pitfalls of outdated information.

Money & Finance

Day Traders Often Ignore This One Topic At Their Peril

Boring things — like taxes — can sometimes be highly profitable.


Want to Be More Productive Than Ever? Treat Your Personal Life Like a Work Project.

It pays to emphasize efficiency and efficacy when managing personal time.

Business News

'Passing By Wide Margins': Elon Musk Celebrates His 'Guaranteed Win' of the Highest Pay Package in U.S. Corporate History

Musk's Tesla pay package is almost 140 times higher than the annual pay of other high-performing CEOs.

Growing a Business

He Immigrated to the U.S. and Got a Job at McDonald's — Then His Aversion to Being 'Too Comfortable' Led to a Fast-Growing Company That's Hard to Miss

Voyo Popovic launched his moving and storage company in 2018 — and he's been innovating in the industry ever since.

Starting a Business

I Left the Corporate World to Start a Chicken Coop Business — Here Are 3 Valuable Lessons I Learned Along the Way

Board meetings were traded for barnyards as a thriving new venture hatched.