Working with the Government as a Small Business

The U.S. government is the world’s largest buyer of goods and services. It supplies non-profits, organizations, research facilities, and every other type of business with a platform for long-lasting success. In fact, federal and state agencies provide small and large businesses with long-term stability and profitability that makes it essential for new businesses and existing businesses to attempt to enter the federal procurement environment.

total 2013 government spending
2015 total federal procurement spending

All entrepreneurs should know that the government sets aside a portion of their federal procurement money for small businesses. Their annual goal is to commit 23 percent of the federal budget to small businesses. The federal government exceeded their goal in 2014, resulting in 91.7 billion being awarded to small business contractors. The FY 2015 small business procurement prime contracting breakdown looks like this:

  • Small disadvantaged firms – 9.46 percent of all federal contracts, equaling $35.4 billion.
  • Service-disabled veterans – 3.68 percent of all federal contracts, equaling $13.8 billion.
  • Women-owned small business – 4.68 percent of all federal contracts, equaling $17.8 billion.
  • HUBZone (Historically Underutilized Business Zones) – 1.82 percent of all federal contracts, equaling $6.4 billion.

Small Business State Profiles

Small businesses should look to both the federal government and state governments for contracting opportunities. States provide small businesses with a less competitive and profitable opportunity to grow their business. For a more in-depth look at the government contracting environment for the state you are interested in, select the state below:

Number of small businesses in the state: 572,546
Number of workers employed by small businesses: 1 million
Increase in minority ownership: 43.9%*
Federal Contract Dollars to Businesses in FY2016
Total =$8.3 billion**

*Diversity statistic tracks changes between 2007 and 2012 based on the Survey of Business Owners (SBO) 2015 release.

**States represent where contract work was performed. Amounts are in 2016 dollars. Represents ALL contract work performed in the state, including small and large businesses. Information via