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ADVANCING EQUITY IN FEDERAL PROCUREMENT

The Biden Administration recently published guidance for agencies to implement his executive order related to Advancing Racial Equity and Support for Underserved Communities. The memo also sites that small business participation in the federal government marketplaces has decreased 79% from 2005 to 2019. To help reverse this trend, the memo outlines several strategies agencies should explore. It also increases the goal for spend to Small Disadvantaged Businesses (SDB) to 15% by 2025. With all this focus on SDB, let’s be sure everyone understands what an SDB actually is. 

When registering to sell to the federal government, firms can check a box in SAM.gov that indicates if they meet the definition of Small Disadvantaged Business. Many firms check this box without fully understanding the definition. An SBD is a firm that meets the definition of socially and economically disadvantaged. This means the firm is owned and controlled by a minority (see here for a list of minority grounds presumed to be disadvantaged and the full definition) AND that the firm’s owner has a personal net worth of less than $750,000 which excludes equity in the business and primary residence. See here to read full definition and here for an insightful article on the 5 Things You Should Know. Did you check that box in SAM?  Your Procurement Technical Assistance Center advisor can work with you on your SAM registration and assist in reviewing the definition for SDB or any other socio economic category.

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