Decoding the SBA’s Scorecard: The Truth Behind the ‘A’ Grade

Written by Leslie Faircloth | Jul 28, 2026, 3:43:22 PM

The Small Business Administration (SBA) recently awarded the federal government an 'A' grade for its FY 2025 small business contracting performance, but the underlying data paints a very different picture.

In reality, the government missed its 5% Women-Owned Small Business (WOSB) goal for the first time in 12 years, reaching only 4.52%, and missed the 3% HUBZone goal at just 2.66%. New contract awards dropped significantly across the board, with WOSB awards declining by 22% and 8(a) awards dropping by 19.4% compared to FY 2024. The total number of unique small business prime contractors also plummeted by over 4,000, falling to just 56,725.

So, how did the government still manage to receive an 'A'? The SBA essentially awarded massive "extra credit". After dropping the Small Disadvantaged Business (SDB) goal from 15% to 5% mid-year, the SBA gave agencies double credit for exceeding it, allowing them to score a 20 out of 10 in the SDB category, masking their massive misses in the WOSB and HUBZone categories. Without this mathematical bonus, the government's overall score would have been a 'B'—still overly generous when considering the data.

Furthermore, the data reveals significant discrepancies in Service-Disabled Veteran-Owned Small Business (SDVOSB) reporting. Despite a mandate from the 2024 National Defense Authorization Act (NDAA) requiring SDVOSBs to be formally certified by the SBA, the scorecard relied on outdated SAM.gov self-certification checkboxes. This oversight artificially inflated SDVOSB spending by an estimated $6 billion, meaning the government actually missed the 5% goal for SDVOSBs as well, hitting only about 4%. Another notable shift in the data is the concentration of 8(a) dollars: Tribal, Alaska Native, and Native Hawaiian entities now account for nearly 70% of all 8(a) spending ($27 billion), despite making up only 16% of program participants.

However, it is not entirely bad news for the defense industrial base. While the government-wide numbers were disappointing, some specific agencies successfully bucked the downward trend. For example, the Department of Commerce exceeded all ten of its prime and subcontracting goals, and the General Services Administration (GSA) achieved an impressive 19.2% increase in unique small business prime contractors.

STRATEGIC ACTION PLAN FOR YOUR BUSINESS

When government-wide spending trends downward, you must become hyper-targeted in your business development efforts. I advise taking the following steps to navigate these scorecard realities:

  • Target High-Performing Agencies: Do not treat the federal government as a monolith. With overall small business awards shrinking, pivot your capture strategy toward agencies that are actively prioritizing small businesses. Agencies like the Department of Commerce or the GSA demonstrated significant, measurable growth in their small business utilization and should be considered as targets when planning your pipeline.
  • Finalize Your Formal SBA Certifications: If you are an SDVOSB relying on the old SAM.gov self-certification, you are living on borrowed time. The government is legally mandated to count only SBA-certified firms. Once SAM.gov systems catch up with the SBA database, uncertified firms will be locked out of sole-source and set-aside opportunities. Ensure your formal SBA certifications are active immediately.
  • Explore Native Teaming Arrangements: With nearly $27 billion in small business contracts flowing to Native-entity 8(a) firms, the procurement landscape has fundamentally shifted. Non-Native small businesses should actively seek out strategic teaming agreements, subcontracts, or Mentor-Protégé Joint Ventures (JVs) with Tribal, Alaska Native, or Native Hawaiian corporations to access these highly active and lucrative contract vehicles.

Credits & Further Reading: This update is based on data analysis from Sam Le at GovCon Intelligence and Steven Koprince at The FedLift Launchpad.
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