U.S. SBA resets small business goals down to statutory floor

News - Published Feb 05, 2025

The U.S. Small Business Administration recently published an update to its business participation goals, resetting the goals for small disadvantaged businesses (SDBs) down to its statutory floor. The new SDB goal applies identically across all government agencies, and has been set at 5 percent. This follows the previous administration's government-wide SDB participation goal of 15 percent.

Language in the law requires the SDB participation goals to be "not less than" 5 percent. However, presidential administrations have discretion to raise the goal or return it down to its lowest legally permissible value. The most recent data available from SBA is for fiscal year 2023, during which government agencies surpassed the then-current SDB participation goal of 12 percent.

The governmentwide contracting goal for small businesses generally remains at 23 percent. The downturn for the SDB contracting goal is speculated to be the first downward revision of the goal in the program's history.