Are Small Businesses Feeling Flush Yet?

The Defense Logistics Agency (DLA) announced last week that it had exceeded its goals for awarding contracts to small businesses last fiscal year. Its goal was to award 32 percent of eligible dollars to small businesses and when the final tally was in, they found out small business awards totaled 35 percent of eligible dollars. This was the first time since 2006 that the Agency exceeded its small business contracting goals.

What is "eligible dollars" you ask? Eligible dollars in this case exclude dollars spent overseas, Foreign Military Sales, and Ability One (services) contracts. Eligible dollars for DLA in fiscal year 2013 totaled a little more than $20 billion. Of that $20 billion, 7.1 billion went to small businesses.

$20 billion represents a small fraction of U.S. Government procurements but still, this represents a positive step. The products that DLA buys is conducive to small business participation and DLA acknowledges that it has an easier time meeting (or in this case, exceeding) its small business goals than say the Army, Navy, and Air Force with their big ticket weapons systems.

DLA attributed its success to several factors:

• Make it easier for vendors to understand exactly what DLA wants to purchase
• Improve communication with small businesses
• Improve the website to help vendors find information easier
• Increase outreach efforts

According to DLA, one of its biggest challenges in the current year is to find new sources of supply for products and services. DLA believes that more sources mean better competition and should also improve quality.