SBA Report: ED Rates an "A" on Small Business Utilization - with Room for Improvement

The U.S. Small Business Administration (SBA) recently released its annual scorecards for all Federal agencies indicating the degree to which each attained small business prime and subcontracting goals for FY2013.  The U.S. Department of Education (ED), which hires Private Collection Agencies (PCAs), incentivizes those PCAs to subcontract to small businesses, and remains the largest Federal buyer of collection agency services, received an “A” grade for FY2013, with room for improvement in a few areas.  Click here for a copy of all reports and here for ED’s report.

In FY2012, for all purchases (to include PCAs), ED contracted out more than $400 million directly to small businesses and more than $600 million through subcontracting programs, for a total of more than $1 billion in small business contracting expenditures.  However, during that year, ED achieved only 29.5% small business subcontracting utilization against a goal of 43.5%, while slightly exceeding its prime contracting goal for small businesses.

In FY2013, ED contracted out more than $600 million to small businesses directly and more than $1 billion through subcontracting programs, for a total of more than $1.6 billion in small business contracting expenditures.   During that time ED again exceeded its prime contracting goal for small businesses, but came much closer to meeting its subcontracting goal for small businesses.

In both years, ED did not meet any of its goals for two categories considered special designations by the SBA: HUBZone small businesses and Service Disabled Veteran-Owned small businesses (SDVOSBs).  Over that timeframe, ED was only able to reach about a third of its goal for direct contracting to HUBZone and a much smaller fraction of its goal for SDVOSBs.  Similar shortfalls were evident in small business subcontracting within those categories for both years.

Fed Cetera is a company in the collection industry that helps companies pursue opportunities with the Federal government.  Its Subcontractor Network is a program in which it matches small businesses with large, prime contractors on Federal contracts like the ED PCA task order.  Large firms on the ED PCA task order have an incentive to hire small businesses as subcontractors to improve their scorecard performance and maximize market share. Companies working with Fed Cetera to pursue subcontracting opportunities recently surpassed $25,000,000 in total billings for their work provided as subcontractors to ED PCAs. Click here to learn more.