GOV TALK: How the Government Saves a Place for Small Businesses

  • CIRAS RedSmall (23 percent)
  • Service-Disabled Veteran-Owned Small Businesses (3 percent)
  • Women-Owned Small Businesses (5 percent)
  • Historically Underutilized Business Concerns Small Businesses (HUBZone) (3 percent)
  • Socially and Economically Disadvantaged Small Businesses (5 percent)

Government agencies establish programs to monitor their spending and ensure that an appropriate amount is going to these small business categories. The Small Business Administration also acts like a liaison in some cases to ensure agencies are complying with the rules. Failure to meet goals must be justified.

Many federal contractors have similar goals for subcontractors written into their contracts.

Businesses that are not considered “small” must have subcontracting plans, with specific goals for small business participation, if they’re awarded a contract valued at more than $650,000 (or $1.5 million, for construction). Companies must report on progress and will be asked to justify any shortcomings.

Smaller businesses may not require a formal plan. But anyone receiving a contract valued at more than $150,000 must agree in the contract to provide the same “maximum practical opportunity” for small businesses.

What does this mean to you, as a small business?

You should work to understand your target customer (whether government or prime contractor) and how the goals apply to them.

Research the target’s historical use of small businesses and their goals.

Respond to sources-sought notices from agencies looking for small businesses, market proactively, and where appropriate, obtain additional certifications required for prime contractors to meet their internal requirements.

If you are a small business or a prime contractor looking to partner with a small business, contact CIRAS via Beth White at 563-370-2166 or


This article originally appeared in the Spring 2015 edition of CIRAS News. You can find the rest of this issue and more on our website.

To read a companion story, click here.