Black-owned businesses make up less than 1.6 percent of the Federal government’s contracting base on a revenue basis – a low level that leaves a lot of room for improvement, according to government officials looking to create a more inclusive environment in contracting.

During an online webinar hosted by Brookings Institution on April 4, Bibi Hidalgo, associate administrator at the Small Business Administration’s Office of Government Contracting and Business Development,  talked about the importance of expanding inclusiveness in contracting.

“As far as black-owned business contracting, we’re only at 1.6 percent of all Federal contracting dollars going to black-owned businesses,” said Hidalgo.

“The talent is there, the businesses are there,” she said. “It’s just a matter of making those connections -that our acquisition workforce and our buyers are able to connect with the firms that have [these] incredible skill sets that they can offer the Federal government.”

Although 1.6 percent seems like small on a percentage basis, it also amounts to a hefty $9 billion of revenue.

Hidalgo suggested that simply doubling the revenue percentage would mean “another $9 billion among black-owned firms in the United States, that’s $9 billion in additional opportunity and jobs and lifting communities.”

Hidalgo also talked about what SBA is doing to address shortfalls in revenues among contractors.

“One of the things that we did [with] a team at OMB [Office of Management and Budget] is ensure that all the socio-economic firms – women, HUBZone, veterans, minority owned – were recorded and are part of the category management tiering system,” she stated.

The purpose of the system is to give the government a “real jumpstart on supply chain management – and deliver impactful demand results,” said Mathew Blum, associate administrator at the Office of Federal Procurement policy at OMB, who also spoke during the Brookings event.

Hidalgo added that the Biden Administration began to take action in 2021 – “right out of the gate” – to address inclusivity shortfalls in contracting.

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Jose Rascon
Jose Rascon
Jose Rascon is a MeriTalk Staff Reporter covering the intersection of government and technology.