Written by: Shauna Weatherly, President of FedSubK, SME Advisor to GovPort
The Small Business Administration (SBA) Procurement Scorecard is a critical evaluation tool to gauge federal agencies' success meeting small business contracting goals. These scorecards influence agency performance and have broad implications for the small business community engaged in federal contracting.
Let’s explore how the scorecard impacts small business contracting and discuss its core evaluation metrics, potential areas for improvement, and what could be gained by revisiting the current scoring methodology.
What is the SBA procurement scorecard?
The SBA Procurement Scorecard is published and distributed once a year. It serves three primary purposes:
- Goal measurement: The SBA procurement scorecard tracks how well federal agencies meet their small business and socio-economic prime and subcontracting goals.
- Data transparency: It provides transparent, accessible contracting data for public review.
- Agency progress reporting: It reflects each agency’s performance toward specific goals, including those for small businesses (SBs), women-owned small businesses (WOSBs), small disadvantaged businesses (SDBs), service-disabled veteran-owned small businesses (SDVOSBs), and businesses located in Historically Underutilized Business Zones (HUBZones).
Additionally, the scorecard enables small businesses to gain insight into federal contracting trends and highlights opportunities where agencies are likely to need more support to reach their targets.
How agencies are graded
The scorecard assesses agencies across four key areas:
- Prime contracting achievement (50%): Assesses each agency’s performance in directly awarding prime contracts to small businesses in the target categories.
- Subcontracting achievement (20%): Measures the extent of an agency’s large business prime contractors meeting agency goals for dollars subcontracted to small businesses in target categories.
- Prime vendor comparison goal (10%): Evaluate year-over-year change in the number of small business prime contractors for each of the five socioeconomic categories reviewed (SB, SDB, WOSB, SDVOSB, and HUBZone).
- OSDBU peer review (20%): The Office of Small and Disadvantaged Business Utilization (OSDBU) is reviewed based on its adherence to statutory requirements in supporting small businesses. The number of requirements may vary each year depending on Administration initiatives and new legislation.
Grades range from **A+** (meeting or exceeding 120% of goals) to **F** (under 70% of goals), incentivizing agencies that perform well to maintain and increase their outreach efforts to small businesses, growing those businesses into viable long-term members of the industrial base as needed to sustain agency missions. These agencies gain a favorable reputation within the small business community. Recent legislation also grants agencies double credit toward their small business goals for prime small business awards made as local set-asides in disaster-stricken areas or U.S. territories, including Puerto Rico, encouraging greater local engagement in more vulnerable regions.
Current challenges in the SBA scorecard system
The SBA scorecard was developed to provide accountability and incentivize government agencies to meet small business contracting goals. However, as Shauna Weatherly, President and founder of Federal Subcontract Solutions (FedSubK), notes, the scorecard often fails to paint a transparent picture of agency performance.
Here are some insights into current challenges shared by Weatherly in a recent webinar discussion:
- Overcomplicated metrics: Agencies must track only certain prime awards and double-count others, but only if they fall within a specific statute. They also cannot include actions that can distort data, such as deobligations associated with prime contracts for which there are no current positive dollar awards. Moreover, current scoring methods do not adequately track nor require compliance with subcontracting plans. The low 20% weight in the total value of the procurement scorecard grade overall for attaining subcontracting goals perpetuates an inaccurate view of the effectiveness of small business plan compliance. Without more weight or a more nuanced metric, small businesses that rely heavily on subcontracting remain underrepresented and invisible in agency performance evaluations. In addition, the weighted scoring for prime vendor comparison could easily be a pass / fail rating and not draw weight from the other metrics in the overall grade.
- Lack of accountability: One critical shortfall in the current scorecard system, Weatherly says, is its lack of enforceable accountability measures. Without real consequences for failing to meet small business prime and subcontracting goals, agencies often lack the motivation to pursue meaningful corrective action. Additionally, the 15 CFR 644(k) OSDBU requirements checklist and associated grade allow little room for scoring variance; it is scored either as Excellent or Unsatisfactory with few exceptions. Small businesses would be better served if these requirements were incorporated into agency personnel performance metrics instead of agency-wide scorecards for accountability purposes.
- Limited engagement: Engagement with small businesses is key to how effectively agencies can hit their contracting goals. However, how in-depth that engagement is varies between agencies, with many failing to publish outreach events on their public calendars regularly. The lack of standardized outreach efforts and the “by-appointment-only” approach adopted by many OSDBUs undermine the scorecard’s goal of promoting proactive engagement.
Potential improvements in the SBA scorecard methodology
To enhance the effectiveness of the SBA Procurement Scorecard, here are a few actionable improvements:
- Expand and simplify metrics: Scorecard weighting should be redistributed so that it promotes:some text
- Agency efforts to effectively conduct outreach for increased small business participation, particularly in categories where goals have not been met.
- Progress on subcontracting goals.
- Initiatives targeted at underrepresented businesses, such as those in HUBZones or women-owned enterprises.
- A 360-view of the OSDBU offices that measures effectiveness against Section 15(k) of the Small Business Act (SBA) from all perspectives, such as agency acquisition personnel and industry.
- Increasing transparency: Detailed dashboards can provide a clear view of progress using agency prime award and funding data and eSRS reports. These tools would help small businesses, primes, and subcontractors track agency achievements in real time and align their efforts more effectively with federal contracting opportunities. Improved visibility would also strengthen the scorecard’s accountability, as stakeholders would have direct insight into agency performance.
- Accountability measures: In a similar vein, the scorecard system could include enforceable consequences for agencies that don’t meet their small business contracting goals. Introducing accountability, such as penalties for large businesses failing to meet subcontracting targets, would push agencies and companies to prioritize small business engagement and take corrective actions when needed.
- Elevating engagement levels: Meaningful engagement with small businesses requires a proactive approach. Weatherly noted that while offices sometimes discuss initiatives to increase engagement, it is often “not an elevated level of engagement.” Instituting standards for outreach and creating feedback mechanisms would ensure small businesses are actively supported throughout the contracting process, ultimately making the scorecard a true reflection of agency performance.
Implications of maintaining the status quo
Leaving the current methodology in place could perpetuate accountability gaps, limit small business engagement in federal contracting, and dilute the scorecard’s role to reflect agency performance accurately. Small businesses, especially those within socio-economic categories, may continue facing unnecessary obstacles due to a lack of agency outreach and engagement.
The bottom line
The SBA procurement scorecard is a cornerstone of small business contracting in the federal marketplace. It could play an even more substantial role in expanding small business opportunities and promoting government transparency by developing evaluation criteria, increasing transparency and accountability, and improving outreach efforts. These improvements would better support small businesses and foster greater participation in federal contracting opportunities.
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