FY2024 Was a Banner Year for Small Business Contracting—Here’s How to Ride the Wave Into FY2025
The federal government just dropped its FY2024 small business contracting stats—and they’re more than impressive. With over $183 billion in prime contracts awarded to small firms, this marks the fourth straight year the government has blown past its 23% goal, hitting a new high of 28.8%. If you’re a small business eyeing the federal marketplace, this is your sign: the door’s wide open.
Here’s what happened, why it matters, and how you can capitalize in FY2025 and beyond.
Record-Setting Numbers Across the Board
The topline number is $183.3 billion in prime contracts for small businesses—a $4.6 billion jump from FY2023. That’s not just window dressing. These awards supported over one million jobs and helped expand small business participation across manufacturing, defense, construction, and professional services.
Let’s break it down further:
Small Disadvantaged Businesses (SDBs): Received $78.1B (12.3%), slightly shy of the 13% goal but still a record.
Women-Owned Small Businesses (WOSBs): Hit $31.7B (5.0%), just a hair below the target—highest ever in dollars.
Service-Disabled Veteran-Owned Businesses (SDVOSBs): Scored $32.8B (5.1%), exceeding the new 5% goal.
HUBZone firms: Landed $17.5B (2.74%)—a record in dollar terms, even if short of the 3% goal.
And it wasn’t just about set-asides. Agencies awarded a record $69.6 billion through small business set-aside contracts, showing a government-wide commitment to leveling the playing field.
Why This Matters for Your Business
If you’re in the federal contracting game—or want to be—these numbers aren’t just a headline. They’re a roadmap. Here’s the takeaway:
There’s More Money in Play: From 8a contracts services to SDVOSB sole-source awards, there are more pathways than ever for certified firms to win federal work.
Certifications Are Pay-to-Play: SBA 8a certification, women owned small business certification, HUBZone, and disabled veteran small business certification continue to unlock exclusive opportunities. Without them, you’re competing with the entire field.
Agencies Are Actively Seeking Diverse Vendors: Missed goals in WOSB and HUBZone categories mean agencies will be pushing even harder in FY2025 to find eligible, qualified small businesses. That creates a sweet spot for firms that are ready to go.
How to Take Advantage of FY2024’s Momentum
To make FY2025 your year, here are five moves to make right now:
Get Certified (or Re-Certified)
The government isn’t slowing down its diversity push. Use the streamlined MySBA portal to apply for SBA 8a certification, women business certification, or disabled veteran small business certification. These open the door to 8a contracts services, sole-source awards, and small business set-asides you simply can’t access otherwise.Clean Up Your SAM and DSBS Profiles
Agencies and primes are hunting for partners through these platforms. Make sure your contractor NAICS code is correct, your capabilities are clearly stated, and your profiles are complete. Bonus: The new GovCon Match tool can help connect your offerings with agencies’ specific needs.Target Agencies That Need You
Use the SBA’s scorecard data to identify which agencies missed their goals in your category. For instance, if your company holds a HUBZone or women owned small business certification, check which agencies fell short and align your outreach accordingly.
Subcontracting Is Still a Goldmine
Primes awarded over $86B to small business subcontractors in FY2023—and that number is likely even higher now. Tap into that by connecting with large contractors in your space and marketing your socioeconomic status. Use it as a bridge to prime contracts down the road.Watch for Regulatory Shifts and New Contract Vehicles
FY2025 could bring significant changes to subcontracting rules, multi-award contracts, and set-aside structures. Stay agile, and be ready to team up for new government procurement vehicles or sole-source contract windows as they open.
Big Picture: Federal Contracting Is Tilting Toward Small Business
Even if total federal spending fluctuates, the 23% small business minimum is here to stay—and it’s being exceeded. From increased use of set-asides to rising targets for SDB participation, the policy momentum is strong. If you’re pursuing SBIR grant assistance, Government Contract Proposal Writing, or seeking the best NAICS codes for small business growth, now is the time to double down.
FY2025 will likely see even more pressure to hit goals in underserved categories like WOSB and HUBZone. If your firm is ready and visible, there’s never been a better time to make your mark.
Want to see how your NAICS codes stack up in the current competitive landscape? Check out our breakdown of top-performing codes in 2024 and how to strategize around them:
The Most Competitive Federal Contracting NAICS Codes of 2024—and How Small Businesses Can Still Win
If you aren't a Squared Compass partner, what are you waiting for? From getting your business set up with specific government set-aside programs at both the State and Federal level, to being empowered by a Fractional Capture team to win government contracts, to receiving tailored government contract opportunities Squared Compass delivers immense value which helps propel our partners to success. Schedule a chat with our team today.
