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Federal small business procurement goals are set by Congress , which state that the Federal government shall direct a percentage of spending dollars to small business, and certain categories of small businesses. Congress first enacted a procurement goal in prime contracting for small business in 1988. Since then, goals have been increased, extended to include some subcontracting, and applied to certain sectors of small businesses such as socially and economically disadvantaged small business , service-disabled veteran-owned small businesses , woman-owned small businesses , and Historically Underutilized Business Zones . (See Federal Small Business Goaling Guidelines )

The U.S. Department of State is proud of our strong track record in meeting our Small Business Goals and achieving a grade of “A” or higher every year since FY2010. Published scorecards are available here .

Fiscal Year 2023 Goals, U.S. Department of State
Prime Contracting
Small Business
25.5% 38%
Small Disadvantaged Business (including 8(a)
21% 5%
Women-Owned Small Business (WOSB/EDWOSB)
5% 5%
Service Disabled Veteran Owned Small Business
3% 3%
HUBZone Small Business
3% 3%

Each fiscal year, OSDBU issues a “Procurement Goal Order of Preference ” to establish goal priorities based on the Department’s need for achievements against its established goals. The 2023 priority order is:

  1. Woman-owned and Economically Disadvantaged Woman-owned Small Businesses;
  2. Small Disadvantaged Businesses
  3. Service Disabled Veteran Owned Small Businesses; and
  4. Historically Underutilized Business Zone Small Businesses.

The guidance stems from FAR 19.203  – there is no preset order of preference among the socioeconomic programs, except to consider socioeconomic programs above general small business  (FAR 19.203(c)), and using market research to determine available firms and agency progress in fulfilling small business goals (FAR 19.203 (d)). Therefore, the current fiscal year’s order is directly based on the previous year’s small business goal achievements.

U.S. Department of State

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