Federal agencies set wildly different small business subcontracting goals, and what satisfies a DoD contracting officer will get you flagged at DHS. Here is what the numbers actually look like, agency by agency, what DOT requires on highway work, and how to benchmark your plan before you submit it.
Why the goals differ so much
Each civilian agency negotiates subcontracting goals with the Small Business Administration annually. DoD sets its own. The statutory floor is 23% of total federal prime contract dollars going to small businesses, but individual agency goals vary based on the mix of contract types, the industrial base in that sector, and historical performance.
The SBA publishes Scorecard data every fiscal year. FY2023 results confirm what procurement teams already know from experience: some agencies consistently hit their numbers, and some have missed for years.
Agency-by-agency goal breakdown (FY2023)
Department of Defense: 22.5% overall small business goal. The FY2023 prime contracting performance came in at roughly 25.8%, which sounds healthy until you break it out by socioeconomic category. DoD's SDB goal was 12%, and it hit 10.6%. The gap matters because contracting officers at the program level track SDB separately from the overall small business figure.
Department of Homeland Security: 42% small business prime contracting goal, one of the highest in the federal government. DHS has consistently been a strong performer in this category. If you are competing for a DHS prime contract above the subcontracting plan threshold ($750,000 for most contracts, $1.5 million for construction), your subcontracting plan goals need to reflect that environment. A plan that mirrors DoD norms will look thin to a DHS contracting officer.
Department of Veterans Affairs: 20% goal for service-disabled veteran-owned small businesses at the prime level, plus a general small business goal above 30%. VA has a dedicated Office of Small and Disadvantaged Business Utilization and actively monitors subcontracting compliance.
NASA: 20% small business goal with a specific 5% goal for SDBs. NASA procurement tends to be highly technical, which creates a common friction point: primes argue the subcontracting market is too specialized. Contracting officers push back on that argument unless you document the search effort.
General Services Administration: 33% overall small business goal. GSA's category management contracts, including MAS vehicles, carry subcontracting requirements that flow through to task orders above the simplified acquisition threshold.
Department of Energy: 8.5% small business goal, reflecting the heavy reliance on large national laboratory management contractors. DoE is an outlier where low percentages are expected and normal.
What FAR requires
FAR 19.702 triggers the subcontracting plan requirement for contracts and modifications above $750,000 ($1.5 million for construction) that offer subcontracting possibilities. The plan must include separate goals, expressed as percentages of total subcontracting dollars, for:
- Small business
- Small disadvantaged business (SDB, which includes 8(a) firms)
- Women-owned small business (WOSB)
- HUBZone small business
- Service-disabled veteran-owned small business (SDVOSB)
- Veteran-owned small business (VOSB)
The plan also requires a description of the methodology for identifying and selecting small business subcontractors, a good faith effort description, and assurances that flow-down provisions will be included in subcontracts.
FAR 52.219-9 is the clause that implements the subcontracting plan. Familiarize your BD team with 52.219-9(d), which details what a plan must include, and 52.219-9(l), which covers liquidated damages for failure to comply in good faith.
DOT and DBE requirements on highway projects
Department of Transportation funding introduces a separate regulatory layer. The Disadvantaged Business Enterprise (DBE) program under 49 CFR Part 26 applies to any project receiving DOT federal financial assistance, including Federal Highway Administration (FHWA) funds, Federal Transit Administration (FTA) grants, and FAA airport improvement funds.
DBE goals are set at the project level by the state DOT or local transit agency, not by DOT centrally. A state highway project might carry a 10% DBE goal; an airport concession project in a major metro can run 25% or higher. The goal is set based on availability of DBEs in the relevant market area and the types of work being subcontracted.
DBE goals are race-conscious and apply specifically to businesses owned and controlled by socially and economically disadvantaged individuals. They are distinct from FAR-based small business goals, and a firm that qualifies as a small business under SBA size standards may not qualify as a DBE. Make sure your subcontracting data systems track DBE certification separately from SBA certifications.
State DOTs report DBE attainment to FHWA annually. If a prime consistently underperforms on DBE goals, it can affect future project awards. The scrutiny is real.
How to benchmark your plan goals
Contracting officers compare your proposed goals against two data sources: the agency's own prior subcontracting plans on similar contracts, and the SBA's subcontracting database.
The SBA maintains a publicly accessible database called DSBS (Dynamic Small Business Search), but the more useful benchmarking tool is the Electronic Subcontracting Reporting System (eSRS), where approved subcontracting plans and actual reporting data are stored. Primes with access to their own eSRS history should pull prior plans as a starting floor.
Three benchmarking approaches that hold up under agency scrutiny:
Market analysis by NAICS code: Pull the small business population in the NAICS codes you plan to subcontract. If 40% of firms providing the relevant services are small businesses, a plan goal of 5% will require explanation.
Comparable contract comparison: Find contracts at the same agency, same program office, same NAICS, with approved plans. FPDS-NG and USASpending.gov give you contract-level data; eSRS data fills in the goal percentages. If similar primes are committing 18% SB and you propose 10%, you are going to need a documented rationale.
Geographic adjustment: Remote project locations legitimately reduce the SB pool. Document it. If the work is in a metro area with a dense small business ecosystem, that argument does not land.
What triggers contracting officer pushback
Four patterns reliably generate requests for plan revision:
Goals clustered at round numbers with no supporting analysis: A plan that says "15% SB, 5% SDB, 3% WOSB" with no market research attachment reads as a template. Back every number with a calculation.
No dollars attached to the percentages: Plans that express goals only as percentages without providing the estimated subcontracting base make it hard to evaluate good faith. Show the math.
Inadequate SDB and WOSB goals relative to SB overall: If your overall SB goal is 20% but your SDB is 1%, a contracting officer will ask why. Agency guidance often sets minimum floors. VA, for instance, expects SDVOSB goals to reflect the strong market of veteran-owned firms.
Missing good faith effort documentation: "We will search DSBS" is not documentation. The plan needs specific outreach steps, named small business associations, and a process for recording and following up on contacts.
Three actions to take before your next proposal
First, pull your agency's most recent Scorecard data from the SBA website and note the goals by socioeconomic category. Build an internal reference sheet by the five or six agencies you pursue most frequently.
Second, register your subcontracting program in eSRS if you are not already reporting there. If you are, pull your last four reporting periods and calculate your actual attainment versus committed goals. That gap is what auditors look at.
Third, if you have DOT-funded work in your pipeline, confirm DBE certification status for any firms you plan to count toward DBE goals. DBE certification is state-specific and has expiration dates. A firm that was certified when you scoped the project may not be certified when you execute the subcontract.
