Minority contracts with government fall for first time in a decade

U.S. government contracts to black- and Hispanic-owned small businesses fell last year for the first time in a decade, declining at a sharper rate than awards to all companies. The Washington Post reports contracts to black-owned firms dropped 8% to $7.12 billion in the fiscal year that ended Sept. 30, compared with the fiscal year previous. Awards to Hispanic-owned businesses decreased 7% to $7.89 billion, according to federal procurement data. Contracts to the two minority groups fell at a faster pace than all contracts, which dipped 1% as the U.S. government slowed spending to help reduce the federal deficit. The gap may reflect stiffer competition over a shrinking pool of revenue as well as the recession’s greater impact on black and Hispanic firms. “When the masses catch a cold, we get pneumonia,” says Harry Alford, president of the National Black Chamber of Commerce in Washington. Small businesses are generally defined by the government as having fewer than 500 employees or less than $7 million in average annual sales. Their awards fell 5% last year, though there were a few bright spots. Contracts to businesses owned by Asian and Pacific Islanders rose about 1%, while Alaskan Native-owned firms—which benefit from a program that reserves contracts for them—saw contracts jump 5%. Read the full story here for more figures and analysis.