Comparing FY 2024 and FY 2025 Small Business Procurement Goals: Shifts in Federal Priorities
The federal government’s small business procurement goals play a critical role in ensuring that small enterprises have access to contracting opportunities. A comparison of the FY 2024 and FY 2025 goals reveals subtle but important shifts in procurement strategies across various agencies, particularly in prime contracts awarded to small disadvantaged businesses.
One of the most noticeable changes is the standardization of the Prime Small Disadvantaged Business (SDB) goal across all agencies in FY 2025. Whereas in FY 2024, agencies had varied SDB goals—ranging from 8.15% for the Department of Energy to 60.50% for the Small Business Administration (SBA)—in FY 2025, every agency has been set at 5.00%. This suggests a significant shift in policy, possibly to create a more uniform and predictable contracting environment for disadvantaged businesses while reducing the flexibility agencies previously had in setting their own targets.
Another interesting shift is the small increase in the Department of Defense (DoD)’s small business goal, rising from 22.43% in FY 2024 to 23.17% in FY 2025. While this is a modest change, it signals a continued commitment by DoD to engage small businesses in defense contracting, an area often dominated by large prime contractors. Similarly, agencies such as the Department of Agriculture (USDA) and the SBA continue to have aggressive goals for small business engagement, maintaining 58% and 72% small business participation, respectively, in FY 2025, aligning closely with their FY 2024 targets.
One of the most dramatic shifts is in the Women-Owned Small Business and Service-Disabled Veteran-Owned Small Business (SDVOSB) categories. In FY 2024, the SDVOSB and Women-Owned Small Business goals fluctuated slightly by agency, with some exceeding 5%, but in FY 2025, every agency has been assigned a strict 5% goal. This again reinforces the federal government's attempt to standardize these procurement targets rather than allow individual agencies to set their own thresholds. The HUBZone Small Business goal remains at 3% across all agencies, reflecting a stable but relatively low priority for HUBZone businesses compared to other set-asides.
The subcontracting goals in FY 2025 show a trend toward more uniformity as well. In FY 2024, subcontracting goals for small businesses varied widely, with some agencies setting aggressive targets—for example, the Department of Labor had a 60% small business subcontracting goal. In FY 2025, these targets have generally become more consistent and centralized, with fewer variations between agencies. However, there are still outliers, such as the Environmental Protection Agency (EPA) and Department of Commerce, which continue to have subcontracting small business goals exceeding 50%.
Overall, the FY 2025 small business goals reflect a clear move toward standardization across agencies, particularly in the Small Disadvantaged Business, Service-Disabled Veteran-Owned, and Women-Owned categories. This approach may provide predictability for contractors, but it also means that agencies lose some flexibility in setting goals tailored to their unique procurement needs. While agencies like the SBA, USDA, and DoD continue to prioritize small business engagement, the changes suggest a shift toward a more streamlined and controlled federal procurement policy, likely to reduce disparities in goal setting across agencies.
Disclaimer: This blog post is for informational purposes only and does not guarantee the accuracy of the data. It does not provide legal advice. Businesses should consult official government sources or legal professionals for compliance and contracting strategies.
