Category Management “Best-In-Class” Procurement Driving Small Business Suppliers Out of Federal Marketplace

WASHINGTON, May 4, 2021 /PRNewswire/ — Today, the U.S. Women’s Chamber of Commerce releases a report entitled Stop the Loss of Small Business Federal Suppliers ( ) which highlights the impact the U.S. government’s unregulated purchasing practice known as “Category Management” through “Best-In-Class” contracts has had on small business participation as federal suppliers. Between FY 2017 and FY 2020 America lost 24% of our small business federal suppliers across all industries and federal agencies totaling 21,500 small businesses. New small business entrants into the federal marketplace have also dropped significantly.

In 2017 through an executive order, the federal government implemented the federal acquisition process known as Category Management through Best-In-Class contracts, which introduced the concept of “Tiered” procurements. This unregulated process resulted in larger contracts going to fewer and larger firms, thus limiting competition to a list of preferred vendors comprising only a small percentage of the total contractor market.

“Category Management has delivered devastating blows to women-owned and veteran-owned small businesses. While overall small businesses showed a loss of 24%, the number of women-owned suppliers dropped more than 22% and veteran-owned suppliers dropped over 17%,” states Margot Dorfman, CEO of the U.S. Women’s Chamber of Commerce.  “Excluding small businesses from competition in the federal marketplace drives up costs while leaving out the vital contributions that small business suppliers bring, including agility, innovation, and service.”

“Small businesses have been reporting for decades the difficulties they have accessing government contracts,” adds Charmagne Manning, President of the U.S. Women’s Chamber of Commerce.  “Small business entrepreneurship is often the only pathway to achieving the American Dream, especially for minorities, veterans and women who have been historically marginalized and denied equal footing to achieve success,” concludes Manning.

The U.S. Women’s Chamber of Commerce and its members call on President Biden to right this wrong by signing a Presidential Executive Order to specifically:

  1. Categorize all small business set-aside procurements or contracts awarded to small businesses as or equivalent to “Tier 3” spending as defined in the OMB Memorandum M-19-13 regardless of the contract vehicle or method used for procuring goods or services from small businesses.
  2. Pursuant to characterizing small business set-asides as”Tier3″ spending, small business set-asides and direct purchases from small businesses shall be exempt from any and all policies that direct procurement to Best-in-Class vehicles.

This U.S. Women’s Chamber of Commerce report is a call to action for President Biden, Congress, and federal agency leaders to act now to protect the U.S. industrial base and stop the loss of small business federal suppliers.

The U.S. Women’s Chamber of Commerce (USWCC) is the leading advocate for women on economic and leadership issues. As the economic leader for women, the USWCC creates opportunities, drives progress, advocates, and provides tools and solutions to support the economic growth of women across America. The USWCC (  ) is a not-for-profit 501(c)6 organization founded in 2001 with over 500,000 members; its headquarters offices are located in Washington, D.C. Contact the USWCC at (202) 607-2488.

Charmagne Manning
[email protected]
(202) 607-2488

SOURCE U.S. Women’s Chamber of Commerce

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