Supporting small businesses in the federal marketplace

• In Event: Time after time: Lessons from three behavioral science research portfolios in government

Abstract

From a portfolio of six evaluations with the Small Business Administration (SBA) conducted over three years, OES has used mixed methods approaches to understand how small businesses compete for federal contracts, and design and test interventions to improve access to federal procurement. Nearly half of American employees work for a business with fewer than 500 employees. There are 30 million of these small businesses in the U.S., and they create the majority of new jobs each year. Many government agencies have a focus on supporting small businesses to promote community development (Housing and Urban Development), develop technology (National Aeronautics and Space Administration), or enhance job creation (Department of Commerce).

Two descriptive studies revealed that small manufacturing (https://oes.gsa.gov/projects/2501-understanding-small-manufacturers/) and rural businesses (https://oes.gsa.gov/projects/2502-rural-small-bus-federal-marketplace/) are underregistered in SAM.gov (a requirement for securing federal contracts) and are not participating in SBA certification programs. 

In parallel with this descriptive work, a test of automated market research (https://oes.gsa.gov/projects/2405-automating-market-research/) for federal contracting officers did not significantly increase contracts to small businesses. And, a test of templated capabilities statements (https://oes.gsa.gov/2503-increasing-small-manufacturer-competitiveness/) did not increase federal buyers’ engagement with small businesses. OES and SBA are building on these findings to learn which interventions provide the greatest return on investment in terms of helping small businesses win more contracts and expand their capacity.

There are four key takeaways from this portfolio of work: 
1) Information Shortage: Small businesses are eager for both information and support from the SBA. Demand is especially high for information surrounding how to succeed in federal procurement and for financial resources (e.g., grants, loans, capital). 
2) Intervention Modality: However, unsolicited emails are not an effective outreach strategy for connecting small businesses with federal buyers. 
3) Manufacturing Disparities: The rate of manufacturing awards to small businesses can be very different across sectors, suggesting that firms in certain sectors are more competitive than in others. 
4) Opportunities for Rural Businesses: Rural small businesses are underrepresented in the federal marketplace, making up only 8.5% of businesses registered on SAM.gov.

Author

• Shibeal Leigh O' Flaherty, Office of Evaluation Sciences
  Presenting Author