In the next 90 days, the Obama administration hopes to cure a problem that has festered for years: the failure of federal agencies to award small businesses their fair share of government contracts.

In fiscal 2008, only 21.5 percent of federal contracting dollars went to small businesses—well below the government’s 23 percent goal. Failing to hit this goal cost small businesses more than $6.5 billion in federal contracts.

As of August 21, only 21.4 percent of contracts funded through this year’s American Recovery and Reinvestment Act had gone to small businesses.

Helping small businesses win more of these economic-stimulus contracts is the immediate focus of the Obama administration’s 90-day push, but officials hope it also will have a lasting impact on other types of contracts.

Government agencies will host events around the country to provide information on contracting opportunities. Employees at the Small Business Administration and the Minority Business Development Agency will meet with procurement officials as well as small businesses in hopes of matching agency needs with the products and services provided by small companies.

The effort is designed to ensure that the government meets its 23 percent small-business procurement goal, with a special emphasis on increasing contracting to businesses owned by minorities, women, and service-disabled veterans, said Joe Jordan, the SBA’s associate administrator for government contracting and business development.

“From the president on down, this is a top priority,” Jordan said.

Obama’s Push Just PR?

Small-business advocates welcome the Obama administration’s focus on improving the contracting numbers, but some fear the 90-day initiative is just a public relations campaign.

“The issue is not outreach,” said Raul Espinosa, who runs the FitNet Purchasing Alliance in Jacksonville, Florida, and heads the Fairness in Procurement Alliance. “The issue actually deals with changing the culture that exists.”

Many procurement officials prefer dealing with large government contractors instead of working with small companies. There are few consequences for missing small-business goals, other than a bad grade for an agency on the SBA’s annual procurement scorecard.

“The SBA is not listened to,” Espinosa said.

Enforcement of contracting goals—not expanded outreach to small businesses—is what’s needed, said Kenneth Weckstein, a partner in Brown Rudnick’s government contracts and litigation group in Washington.

“The thing that is going to help most is if procurement officials are hit over the head with a bat and made aware that they need to take greater efforts to contract with small businesses,” he said.

Al Krachman, a partner in Blank Rome’s Washington office, thinks federal agencies are beginning to appreciate “the mandate of this administration to increase small-business opportunities.”