Report — A Troubling Trend: The Rapid Decline of Small Business Participation in the Federal Marketplace

Summary

A report titled A Troubling Trend: The Rapid Decline of Small Business Participation in the Federal Marketplace, on the U.S. Government's engagement with small business contractors. Its key takeaways state that the government has lost approximately half of its small business vendors since Fiscal Year 2008, the peak year (144,774), and that the 74,716 vendors of FY 2023 were nearly unchanged from 74,042 in FY 2003, while SBA-reported small business awards rose from $90.7 billion in FY 2015 to $178.6 billion in FY 2023. The report reads the rising dollars as consolidation that entrenches established contractors. It argues that small businesses drive competition, innovation and the national defense, citing a Department of Defense Inspector General audit that found TransDigm Group Inc. earned excess profits of at least $20.8 million. Agency-by-agency vendor charts fill an appendix.

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Issuer: Congressional materials
Document type: Report
Case: Troubling Trends Contracting Report

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“Report — A Troubling Trend: The Rapid Decline of Small Business Participation in the Federal Marketplace.” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/troubling-trends-contracting-report/, SHA-256 31927dffdbd2e876cf37a085030a221868ff75acd3a71f1b56dc36705cc26ff4.

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A TROUBLING TREND:
THE RAPID DECLINE OF SMALL
BUSINESS PARTICIPATION IN THE
FEDERAL MARKETPLACE
EXECUTIVE SUMMARY
Small businesses1 are crucial to the United States Federal Government (USG). They represent a significant portion of the
workforce and perform an array of overlooked, yet necessary, tasks that make the American way of life possible. Small businesses
operate at the vanguard of new innovations, bringing vital technologies to bear. They are the linchpin to a strong national defense,
fortifying military supply chains, and providing a myriad of goods and services necessary to maintain combat readiness. They
drive necessary competition, challenging established vendors with forward-thinking ideas and new solutions and encouraging
better pricing, ultimately saving taxpayers’ dollars. Therefore, it is imperative to understand the current state of the USG’s
engagement with this crucial sector of firms, and aggressively work to encourage and enhance small business engagement within
the federal marketplace.

KEY TAKEAWAYS
• Small business engagement is in steep decline. The USG has lost approximately half of its small business
vendors since Fiscal Year (FY) 2008, the year with the highest level of small business engagement
(144,774). In FY 2023, the number of individual small business vendors (74,716) remained nearly
unchanged compared to 20 years prior (74,042 small business vendors in FY 2003). This reveals a
concerning stagnancy that belies the USG’s inability to attract and retain capable small businesses and
suppliers.

• Despite declining engagement, the reported government dollars allocated to remaining small businesses
is increasing. Since FY 2015 the U.S. Small Business Administration (SBA) has reported yearly increases
in government-wide small business spending. These awards totaled $90.7 billion in FY 2015, $100
billion in FY 2016, $105.7 billion in FY 2017, $120.8 billion in FY 2018, $132.9 billion in FY 2019,
$145.7 billion in FY 2020, $154.2 billion in FY 2021, $162.9 billion in FY 2022, and $178.6 billion to
small businesses in FY 2023.2 This trend seems to indicate a willingness within the USG to award
contracts to small businesses. In reality it signals an unhealthy consolidation within the federal supplier
base and an entrenchment of established contractors capturing a growing market share of overall small
business dollars, to the detriment of new and emerging firms seeking to capture the same market share.

1 Small businesses, for the purposes of federal procurement, are defined in 15 U.S.C. 632 as a business that is “independently owned and operated and
which is not dominant in its field of operation.” The statute further establishes the development of size standards by which a business concern may be
determined to be small, which includes revenue or employee-based size standards corresponding to a particular industry.
2 Prior to FY 2015, small business spending hovered at approximately $90-80 billion (B), with the SBA reporting $91.7B in FY 2014, $83.1B in FY
2013, $89.9B in FY 2012, $91.5B FY 2011, $97.9B in FY 2010, $96.8B in FY 2009, $93.3B in FY 2008, and $83.2B in FY 2007. FY 2007 was the
first year the SBA began publicly reporting small business spending data. See SBA, Small Business Procurement Scorecard Overview, available at
https://www.sba.gov/document/support-small-business-procurement-scorecard-overview (last visited Jul. 25, 2024).

1
WHAT IS THE FEDERAL SUPPLIER BASE?

The Federal Supplier Base (FSB) includes an array of entities, including large contractors, small businesses, research institutions,
and various service providers.3 This multifaceted network is critical for building resilient supply chains, establishing economic
stability, maintaining military readiness, and spurring innovation. 4 Within the FSB is the “Defense Industrial Base” (DIB),
which refers to the collective infrastructure and “domestic sources which are providing, or which would be reasonably expected to
provide, materials or services to meet national defense requirements during peacetime, national emergency, or war.”

IMPORTANCE OF SMALL BUSINESSES IN THE FEDERAL SUPPLIER BASE

Small businesses play a pivotal role in the FSB, contributing to the rapid development of new technologies, and providing
flexibility and speed in the delivery of goods and services to all government customers. As will be discussed in detail below, small
businesses drive competition, spur innovation, and are critical to the national defense.

SMALL BUSINESSES DRIVE NECESSARY COMPETITION

The level of competition present in the federal marketplace is an indicator of the range of FSB capabilities, which are used to
meet USG objectives. Lower levels of competition indicate a narrower selection of services due to business consolidation, which
negatively affects the overall efficiency of the federal marketplace. Such inefficiencies may manifest in supply shortages, devel-
oping single points of failure, and gaps in service and product delivery at scale within relevant timeframes.5 These weaknesses may
be consequential in situations involving national security, disaster aid, and other time-sensitive governmental services. 6
Lack of competition can also result in higher costs to taxpayers as acquisition costs rise, due to a diminished motivation by
contractors to offer fair pricing and enhance cost efficiency, as well as innovation and performance stagnation.7 Established firms
may leverage their strong market position to charge more to the federal government.8 These monopolistic behaviors raise the risk
of unregulated costs, which wastes taxpayers’ dollars.9

3 For the purposes of this report, the FSB refers to the collection of businesses providing goods and services as part of the federal marketplace.
4 LUKE A. NICASTRO, CONG. RSCH. SERV. (IF10548), DEFENSE PRIMER: U.S. DEFENSE INDUSTRIAL BASE (Apr. 17, 2023), available
at https://www.crs.gov/Reports/IF10548?source=search.
5 50 U.S.C. §4552(7).
6 OFFICE OF THE UNDER SECRETARY OF DEFENSE FOR ACQUISITION AND SUSTAINMENT, DEPARTMENT OF DEFENSE,
STATE OF COMPETITION WITHIN THE DEFENSE INDUSTRIAL BASE (Feb. 2022), available at https:/ media.defense.gov/2022/Feb/15/2002939087/-1/--
1/1/STATE-OF-COMPETITION-WITHIN-THE-DEFENSE-INDUSTRIAL-BASE.PDF [hereinafter Feb. 2022 DOD DIB Report].
7 DEPARTMENT OF DEFENSE, NATIONAL DEFENSE INDUSTRIAL STRATEGY (Nov. 2023), available at https://www.businessdefense.
gov/docs/ndis/2023-NDIS.pdf [hereinafter DOD Industrial Strategy]; see also Feb. 2022 DOD DIB Report, supra note 6.
[hereinafter DOD Small Business Strategy].
8
DEPARTMENT OF DEFENSE, SMALL BUSIzNESS STRATEGY 5 ( Jan. 26, 2023), available at https://media.defense.gov/2023/
Jan/26/2003150linch429/-1/-1/0/SMALL-BUSINESS-STRATEGY.PDF or https://www.defense.gov/News/Releases/Release/Article/3279279/
dod-releases-small-business-strategy/ [hereinafter DOD Small Business Strategy].
9 Feb. 2022 DOD DIB Report, supra note 6

2
For example, a 2019 Department of Defense Office of Inspector
General (DoD OIG) report found a global leader in engineered
aerospace products, TransDigm Group Inc., had amassed “excess
profit” on 46 of the 47 types of parts that were sold to the
Defense Logistics Agency (DLA) and the United States Army.10
A follow-up audit by the DoD OIG in 2021 discovered that
although contracts were awarded in accordance with policy,
TransDigm garnered excess profits of at least $20.8 million for
105 spare parts on 150 contracts.11 This raises concerns that if
business consolidation continues, established contractors like
TransDigm will be at the liberty to continue raising prices,
creating a dangerous cycle in which USG expenses increase
unnecessarily and newer, smaller businesses are discouraged
from entering the market.12 The presence of new firms in the
federal vendor pipeline creates necessary competition. This is
critical to generating cost savings and preventing monopolistic
practices, and their entrance is contingent on a federal marketplace that is friendly and accessible to newcomers.

SMALL BUSINESSES GENERATE NEW INNOVATIONS AND TECHNOLOGIES

As the nation continues to evolve, so does the composition of the FSB and the DIB. According to the Government Account-
ability Office (GAO), the DIB is shifting away from a concentration on heavy industrial manufacturing and moving toward new
technology which necessitates the involvement of different industry partners, including contractors who do not typically work
with the Department of Defense (DoD) (i.e. small and nontraditional contractors).13 In FY 2021, small businesses made up 77
percent of the research and development (R&D) companies that did business with the DoD.14 More broadly, small companies
hire 43 percent of all high tech jobs in the country, generating 16.5 times more patents than their large counterparts.15 Typi-
cally, small businesses can outturn new prototypes at a faster rate than large corporations, which allows for rapid adaptation to
changing geopolitical conditions and reinforcement of military readiness.16 Through sustained competition and subsequent
growth, these firms represent the next generation of businesses poised to deliver the next generation of products and services
necessary to foster a dynamic and resilient domestic defense ecosystem.

SMALL BUSINESSES ARE CRITICAL TO THE NATIONAL DEFENSE

As the global geopolitical landscape evolves, the USG must continually assess and strengthen its DIB to ensure the nation’s
ability to defend itself and maintain strategic advantages against foreign adversaries.17 A strong DIB is not measured solely by the
strength of the largest defense contractors, but rather the health of the unsung heroes of the defense ecosystem: America’s small
businesses that support these large prime contractors. In FY 2021, small business subcontractors constituted 73 percent of all
businesses who worked with the DoD.18 Furthermore, a 2023 DoD Contract Finance Study cited a 2010 GAO estimate that 60
percent to 70 percent of all defense work is being performed by subcontractors, and certain industries aim to outsource up to 80
percent of the work.19

10
DOD Industrial Strategy, supra note 7.
11
INSPECTOR GENERAL, DOD, DODIG-2019-060, REVIEW OF PARTS PURCHASED FROM TRANSDIGM GROUP, INC. 7 (Feb. 25,
2019), available at https://media.defense.gov/2019/Feb/27/2002093922/-1/-1/1/DODIG-2019-060.PDF.
12
INSPECTOR GENERAL, DOD, DODIG-2022-043, (U) AUDIT OF THE BUSINESS MODEL FOR TRANSDIGM GROUP INC. AND
ITS IMPACT ON DEPARTMENT OF DEFENSE SPARE PARTS PRICING 37 (Dec. 13, 2021), available at https://media.defense.gov/2021/
Dec/27/2002914678/-1/-1/1/DODIG-2022-043%20508.PDF.
13
AMANDA BRESLER & ALEX BRESLER, ANALYZING THE COMPOSITION OF THE DEPARTMENT OF DEFENSE SMALL BUSI-
NESS INDUSTRIAL BASE (May 2, 2022), available at https://dair.nps.edu/bitstream/123456789/4550/1/SYM-AM-22-037.pdf.
14
GAO, GAO-19-406, CONTRACT FINANCING: DOD SHOULD COMPREHENSIVELY ASSESS HOW ITS POLICIES AFFECT THE
DEFENSE INDUSTRY 19 ( Jun. 27, 2019), available at https://www.gao.gov/assets/gao-19-406.pdf.
15
DOD Small Business Strategy, supra note 8.
16
Id.
17
DOD Industrial Strategy, supra note 7.
18
DOD Small Business Strategy, supra note 8; see also SEN. ROGER WICKER, 21ST CENTURY PEACE THROUGH STRENGTH: A
GENERATIONAL INVESTMENT IN THE U.S. MILITARY 1-4 (May 29, 2024), available at https://www.wicker.senate.gov/services/files/
bc957888-0a93-432f-a49e-6202768a9ce0.
19
DOD Small Business Strategy, supra note 8.

3
From its highest levels, the DoD has acknowledged a growing recognition of the value small businesses bring to the defense
mission. In a 2023 statement by Deputy Secretary of Defense Dr. Kathleen Hicks, she noted “(f )rom manufacturers providing
the critical parts that we need for our arsenal – to technology companies developing innovative systems and capabilities – small
businesses are vital along the entire spectrum of the Department’s needs.”20 Small businesses fortify military supply chains and
provide a myriad of goods and services necessary to maintain combat readiness. With technology experiencing quantum leaps
in advancement over these past decades, small businesses are leading the way, allowing the DoD to stay on the cutting edge. This
sentiment is echoed at the DoD procurement level by Dr. William LaPlante, Under Secretary of Defense for Acquisition and
Sustainment, who highlighted the benefits that small businesses have in “developing, delivering, and sustaining the critical
capabili-ties that are required to further implement the National Defense Strategy.”21

Despite this growing recognition, the DIB continues to experience a small business exodus, declining over 40 percent in the past
decade.22 Years-long consolidation in the defense marketplace exposed concerning vulnerabilities in the DIB, such as supply chain
fragility and the reduction of competition and innovation needed to provide optimal support to the warfighter.23 Since the
1990s, the DIB has been consolidated from 51 to 5 aerospace and defense prime contractors.24 According to the DoD’s 2023
Contract Finance Study Report, the top ten firms in the Aerospace & Defense sector accounted for 80 percent of the total
revenue in a data set of 146 firms.25 The top four largest firms accounted for 50 percent of total revenue.26

According to military experts, “the biggest risk for the Pentagon is that it receives no bids for some programs, or only from a
company that can’t fully meet project specifications.”27 As the DIB experiences greater contraction, power becomes concentrated
among established contractors, which may dissuade new players from entering the federal marketplace. Not only does this limit
competition as described previously, but more concerningly, limits the diversity of skills and expertise available to the DoD in
service to the national defense. Thus, the DoD must take immediate action to understand its weaknesses and shortcomings within
the small business DIB. Further, the DoD must actively and aggressively work to harness the full power and potential of small
businesses within the defense arsenal.

DATA SHOWS SIGNIFICANT LOSS OF SMALL BUSINESSES WITHIN THE FSB
Despite that nearly every year over the past decade the SBA has touted “record-breaking” increases in the USG’s small business
awards, the number of small businesses receiving awards continues to spiral downward.28 Since its peak of 144,744 small
businesses in FY 2008, the small business vendor base has nearly halved, experiencing a 48.4 percent decrease in the number of
individual small businesses awarded contracts in FY 2023 (74,617 small businesses). Even when considering only the
procurement activities of the past decade (FY 2013-FY 2023), the USG has seen a 33 percent decrease in small business
vendors.29 Conversely, the USG has awarded an increasing amount of dollars to small businesses between 2001-2023, reaching
year-over-year record highs since FY 2015.30

20
DEFENSE PRICING AND CONTRACTING, OFFICE OF THE UNDER SECRETARY OF DEFENSE FOR ACQUISITION AND
SUSTAINMENT, DEPARTMENT OF DEFENSE, CONTRACT FINANCE STUDY REPORT 6 (Apr. 6, 2023), available at https://www.acq.
osd.mil/asda/dpc/pcf/docs/finance-study/FINAL%20-%20Defense%20Contract%20Finance%20Study%20Report%204.6.23.pdf [hereinafter DOD
Contract Finance Study]; see also GAO, GAO-11-61R, DEFENSE ACQUISITIONS: ADDITIONAL GUIDANCE NEEDED TO IMPROVE
VISIBILITY INTO THE STRUCTURE AND MANAGEMENT OF MAJOR WEAPON SYSTEM SUBCONTRACTS (Oct. 28, 2010),
available at https://www.gao.gov/assets/gao-11-61r.pdf.
21
Press Release, DOD, DoD Releases Small Business Strategy ( Jan. 26, 2023), available at https://www.defense.gov/News/Releases/Release/
Article/3279279/dod-releases-small-business-strategy/.
22
Id.
23
DOD Small Business Strategy, supra note 8.
24
Id.
25
COMMISSION ON THE FUTURE OF THE UNITED STATES AEROSPACE INDUSTRY, NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION, FINAL REPORT OF THE COMMISSION ON THE FUTURE OF THE UNITED STATES AEROSPACE
INDUSTRY (Nov. 2002), available at https://www.nasa.gov/wp-content/uploads/2024/01/aerocommissionfinalreport.pdf.
26
DOD Contract Finance Study, supra note 20.
27
Id.
28
Doug Cameron & Drew FitzGerald, Why Defense Contractors Are Saying No to Their Biggest Customer: The Pentagon, WALL ST. J., ( Jan. 30,
2024, 5:30 AM), available at https://www.wsj.com/politics/national-security/why-defense-contractors-are-saying-no-to-their-biggest-customer-the-
pentagon-ad557306
29
SAM.GOV, DATA BANK, Contract Data Reports, Static Reports, available at https://sam.gov/reports/awards/static (last visited Jul. 25, 2024).
30
Id. Data extracted for fiscal years 2013 (111.398 unique small business vendors) through 2023 (74,617 unique small business vendors).

4
The chart below depicts the stark contrast between the growth in small business dollar awards and the decline in small business
vendors from FY 2010-2023. While the USG publicly touts its small business achievements, this distracts and deflects from the
fact that the USG is not adequately maximizing its engagement with small businesses. The USG has continued over time to
implement acquisition strategies, such as contract consolidation and contract bundling,31 that continue to deter small firms
from working with the USG, while hiding behind these rising dollar figures as proof positive of its commitment to small
businesses.

NUMBER OF UNIQUE SMALL BUSINESS VENDORS COMPARED TO
TOTAL SMALL BUSINESS DOLLAR AWARDS (FY2001-2023)

Source: “Unique Vendors” report, a Standard Report of the Contract Data Reports available through the SAM.gov data bank, data pulled for the period
10/1/2000 to 9/30/2023.

NEARLY ALL FEDERAL AGENCIES EXPERIENCED A LOSS OF SMALL BUSINESSES OVER TIME

Unfortunately, the data shows that this decline is not unique to any one federal agency. Rather, it is felt across government,
impacting nearly all 24 Chief Financial Officer (CFO) agencies. The graph below illustrates the number of unique small
businesses awarded contracts by each federal agency from FY 2001-2023.32 Detailed small business vendor count information for
each agency can be found in the Appendix of this report.

31
SBA, Small Business Procurement Scorecard Overview, available at https://www.sba.gov/document/support-small-business-procurement-score-
card-overview (last visited Jul. 25, 2024). Small business awards totaled $90.7 billion in FY 2015, $100 billion in FY 2016, $105.7 billion in FY 2017,
$120.8 billion in FY 2018, $132.9 billion in FY 2019, $145.7 billion in FY 2020, $154.2 billion in FY 2021, $162.9 billion in FY 2022, and $178.6
billion to small businesses in FY 2023.
32
The Impact of Category Management on the Small Business Industrial Base: Hearing Before the H. Comm. on Small Business, 115th Cong. ( June 2018).

5
FEDERAL AGENCY RATE OF CHANGE OF SMALL BUSINESSES
AWARDED CONTRACTS OVER TIME (FY2001-2023)

Source: “Unique Vendors” report, a Standard Report of the Contract Data Reports available through the SAM.gov data bank, data pulled for the period
10/1/2000 to 9/30/2023

To further examine agencies loss of small businesses, the table below shows the mean (average) and median (middle number)
small business vendor counts for each agency between FY 2001-2023 and calculates the rate of change in small businesses. The
data indicates that, overall, the USG experienced almost a 30 percent decline in small businesses in this time period. All federal
agencies experienced either stagnation or a decline in the number of unique small businesses awarded contracts. Of these
agencies, one (the SSA) lost over 75 percent of its average count of small businesses, five lost over 50 percent of its average count
of small businesses (SSA, HUD, EPA, DOL, OPM), and thirteen agencies lost over 25 percent of its average count of small
businesses (DoD, Treasury, SSA, HUD, EPA, DOL, DOJ, DOI, DOE, DHS, Dept. of Ed., Dept. of Commerce, OPM). Only
three agencies, the General Services Administration (GSA), U.S Department of State (State), and the National Science
Foundation (NSF) saw an average increase in small businesses; however, this growth seems minimal considering the data is
measured over the course of the past twenty years.

6
MEAN AND MEDIAN SMALL BUSINESS COUNTS FY 2001-2023

Source: “Unique Vendors” report, a Standard Report of the Contract Data Reports available through the SAM.gov data bank, data pulled for the period
10/1/2000 to 9/30/2023

The table below draws an additional comparison, identifying the year with the highest level of small business engagement in
each agency, which this report designates as the “peak year,” compared to the FY 2023 rate. This data shows that most peak
years occurred over a decade ago, with major losses since. One agency, the SSA, experienced a loss of over 90 percent since their
peak year. Seven agencies (SSA, HUD, EPA, DOL, DHS, Ed, OPM) experienced a loss of over 75% since their peak years.
Fifteen agencies (DoD, VA, Treasury, SSA, SEC, HUD, EPA, DOL, DOJ, DOI, DOE, DHS, Ed, Commerce, OPM)
experienced a loss of over 50 percent since their peak year. Of all agencies, the GSA experienced the smallest decline, less than
10 percent, since its peak year (FY 2022).

7
PEAK YEAR VS. FY23 SMALL BUSINESS COUNTS FY 2001-2023

Source: “Unique Vendors” report, a Standard Report of the Contract Data Reports available through the SAM.gov data bank, data pulled for the period
10/1/2000 to 9/30/2023

8
DEPARTMENT OF DEFENSE LOSS OF SMALL BUSINESS VENDORS OVER TIME

The DoD commands the majority of federal agency spending on goods and services among the 24 CFO agencies. Because of its
uniquely high purchasing power, it also contracts with the most vendors overall and has the largest impact on the overall trend
line for the entire USG small business vendor base. The charts below visualize how closely the DoD’s data compares to the
overall USG data. A historical assessment of DoD vendor data shows that the agency worked with 22,399 unique small
business vendors in FY 2001. Following the September 11th terrorist attacks and the wars in Iraq and Afghanistan, the DoD
rapidly increased the number of unique small business vendors to a peak of 65,917 in FY 2007. In FY 2023, approximately half
remain at 32,679 unique small businesses.

More recently, from FY 2016-2023, the decline continued at a rate of approximately 28 percent. While this was spread generally
across all of the DoD’s components, it is informative to examine the example of the DLA, which lost about 22 percent, or 3,000
vendors, from FY 2016 to 2022. Small businesses accounted for a vast portion, approximately 2,300, of those losses.33 These
losses are particularly worrisome, given the outsized impact small businesses have on national security domestically and around
the globe.

DEPARTMENT OF DEFENSE SMALL BUSINESS VENDORS FY 2001-2023

Source: “Unique Vendors” report, a Standard Report of the Contract Data Reports available through the SAM.gov data bank, data pulled for the period
10/1/2000 to 9/30/2023
GOVERNMENT-WIDE SMALL BUSINESS VENDORS FY 2001-2023

Source: “Unique Vendors” report, a Standard Report of the Contract Data Reports available through the SAM.gov data bank, data pulled for the period
10/1/2000 to 9/30/2023

33
SBA, Small Business Data HUB, Top Funding Offices and Vendors, available at https://datahub.certify.sba.gov/ (last visited Jul. 26, 2024). Please
refer to the Appendix for agency-specific data.

9
ALL STATES SUSTAINED SMALL BUSINESS VENDOR LOSSES OVER TIME

Similarly, the data shows that the loss in small business vendors is widespread across the nation, impacting both urban and rural
states. Every state, with no exception, saw a decrease in small business vendors from FY 2010-2023. The sharpest declines in small
business vendors by percentage occurred in Iowa (67.1 percent), Maine (64.0 percent), North Dakota (65.8 percent), and West
Virginia (65.2 percent). Further, twenty states, and Puerto Rico and Guam experienced a 30-50 percent drop in small business
vendor counts.

Only two territories experienced an increase. American Samoa saw a 12.5 percent increase in small businesses from FY 2011, the
first-year data became available, to FY 2023. American Samoa began with eight small businesses in FY 2011, peaked to 12 small
businesses in FY 2013 and FY 2018, and dropped back down to nine small businesses in FY 2023. Similarly, the Northern Mariana
Islands saw a 375 percent increase from FY 2011-2023, starting with 4 small businesses in FY 2011, peaking to 27 small businesses
in FY 2021, and similarly dropping down to 19 small businesses in FY 2023. While these territories did record an overall increase,
the data also shows that the actual number of vendors gained is very small and FY 2023 numbers are also trending downward,
compared to previous years.

Source: “Vendor Counts” filtered by State in https://datahub.certify.sba.gov/, a Small Business Administration dashboard that sources data from the SAM.
gov data bank. Data pulled for years FY 2010-23.

10
PERCENTAGE CHANGE IN SMALL BUSINESSES BY STATE OR TERRITORY FROM FY 2010-2023

CONCLUSION

America faces a crucial tipping point in its small business procurement activities, one which may have long-term affects across a
spectrum of government operations, from civil services to the national defense. Without immediate and bold action, the USG
risks further alienating small businesses with dire consequences.

11
APPENDIX
UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT (USAID)

NO. OF SMALL BUSINESSES