What Are the Opportunities?

April 13, 2006

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How much opportunity is there in doing business with the government? Maybe these fiscal year 2002 statistics will begin to give you some idea of the magnitude.

How much opportunity is there in doing business with the government? Some statistics from fiscal year 2003 will give you an idea of how much opportunity there is. (While Fiscal Year 2004 figures were not yet available, recent reports indicate that procurement spending continues to grow about 10 percent per year.)

In Fiscal year 2003, the federal government wrote 11.5 million "actions," commonly referred to as "contracts," for products and services needed during the year. In addition to this activity, the federal government's use of credit cards resulted in another 26.5 million transactions. This is a lot of activity, but what are the dollars? The contracts represented over $305 billion, while the credit cards amounted to sales of an additional $16.4 billion. Looking at it from a different perspective, 91.5 percent of the contacts were under $25,000 in value and were reserved for only small business participation. That is a lot of "bread and butter" for your table. An interesting trend emerging from the data was the service area reported more dollars than the supply/equipment area.

Government Prime Contract Goals

The government has the following designated goals* for awarding prime contracts to small businesses:

23% to small businesses
5% to small disadvantaged businesses for prime and subcontracts
5% to small women-owned businesses for prime and subcontracts
3% to HUBZone small businesses
3% to small service-disabled, veteran-owned businesses for prime and subcontracts

*Keep in mind that these are government goals, not government quotas. Quotas are set objectives that one must achieve; goals are set objectives that one must attempt to achieve. In any event, you probably will not get a contract just to help the government reach its goal. As in any commercial setting, contracts are awarded on the basis of what makes good business sense, with price, quality, and performance being the ruling factors.