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The federal government is spending almost half a trillion annually on the purchase of goods and services needed for its daily operation.

In Fiscal Year 2021, 6.5 billion defense contracting dollars were spent in Michigan. At least 359 million of those dollars are spent in my district. This money brings well paying jobs to West Michigan and stimulates local economies.

The U.S. government remains a consistent and reliable client, yet the federal marketplace is a hard space to break into – especially for small business concerns.

Recognizing the need for a diverse market, Congress included goals for small business participation in federal procurement and created a variety of contracting programs to help small firms compete in the marketplace. The SBA plays a vital role in this process.

The SBA works with agencies to help them meet the small business goals. It also implements and oversees programs used by many small firms to start contracting with the government—and they have been successful in these tasks. In recent years, the government has consistently surpassed the small business goal, allowing the government to receive quality goods and services at competitive prices and strengthen its industrial base.

The SBA also plays an important role in ensuring that small businesses owned by women, veterans, and economically disadvantaged individuals are able to compete in the federal procurement space.

However, there is always room for improvement. The government, as a whole, and some agencies have failed to meet all of the small business participation in several individual goals, such as the woman-owned small business goal. These failures deprive small businesses of billions in contracting dollars.

Additionally, the Committee has seen the average contract size is increasing. On first take, this appears to be promising as larger contracts may be more profitable for small companies. However, it might suggest that more contracts are being consolidated –resulting in fewer opportunities for small businesses. I am particularly interested in witnesses’ perspective on this during today’s hearing.

The ability of small businesses to compete in the federal marketplace has also been adversely affected by the lack of staff in critical roles. Sadly, there are openings in the roles of Procurement Center Representatives and Commercial Market Representatives overseeing millions of contracting actions. Small businesses cannot be adequately advocated for with such few numbers promoting their use and ensuring that agencies are following the small business set-aside procedures.

Lastly, the government has taken steps, such as in developing and implementing category management to deliver savings to federal agencies and eliminate unnecessary redundancies. Yet, the approach has also contributed to a decrease in the small business industrial base. I welcome discussions like today so we can identify the many factors challenging our small contractors and develop thoughtful solutions.

What is important for this Committee to keep in mind is that these developments are part of a bigger picture – which is that the federal procurement marketplace is always evolving.

Small firms bring new ideas to the table, which in turn generate new jobs and even new industries. We must take steps to ensure that they can access the federal marketplace.