The Number
Women Owned Small Businesses (WOSBs): The federal goal was 5% but actual prime contracts awarded came in at 4.97% or about $31.7 billion. This meant agencies narrowly missed the target.
HUBZone Small Businesses: The goal was 3% but agencies awarded only 2.75% totaling approximately $17.6 billion.
Why the Goals Were Missed
One reason is insufficient prime set-aside opportunities. The most effective measure of success for programs like HUBZone is the number of contracts that are formally set aside. Too many awards were made on an open competition basis where large firms have more leverage.
Another reason is industry consolidation and competition. A slight reduction in the number of overall small business prime contractors in 2024 meant fewer firms were able to compete for contracts.
Compliance and regulatory burdens also limit participation. For HUBZone firms the requirement that 35% of employees reside in a HUBZone and that the principal office be located in a HUBZone makes the program difficult to maintain.
Finally there is uneven enforcement. Even when rules exist, agencies do not always consistently apply them which weakens the effectiveness of the program.
Which Agencies Met and Missed the Goals
Performance varied across agencies. For example, smaller civilian agencies often hit their WOSB numbers while large spenders such as the Department of Defense continued to struggle. Historically, the Department of Energy and the Department of the Treasury have done well with HUBZone awards while defense agencies lag behind. Agencies that consistently underperform often cite mission complexity or industry concentration as reasons, but the reality is that contracting officers must make a stronger effort to use these programs.
Why WOSB and HUBZone Set Asides Matter
Set asides create equitable access. They ensure underserved communities such as women owned and economically disadvantaged businesses have real opportunities in the federal market.
Set asides strengthen supply chain resilience. By distributing contracts across a larger pool of vendors, the federal government reduces risk and dependency on a small group of large suppliers.
Set asides are a matter of law and transparency. The 5% WOSB goal and the 3% HUBZone goal were established by statute to address historic imbalances.
Set asides also provide pathways for growth. Winning a government contract gives small firms past performance history and credibility which helps them scale to pursue both federal and commercial opportunities.
Why the Government Must Obligate the Spend
The government is legally required to apply set-aside programs where eligible opportunities exist. Meeting the annual goals is not optional.
Failing to fully obligate the spend can lead to program erosion. Political debates and policy changes have at times questioned the future of set asides. Meeting targets protects against rollbacks.
Obligating the spend demonstrates accountability. Agencies that achieve their goals show they are managing taxpayer dollars responsibly and equitably.
Obligating the spend also drives local job creation in HUBZone communities and empowers women owned businesses to compete on equal footing which strengthens the broader economy.
The Catch Up Effect in FY 2025
Agencies that miss their statutory goals often make a stronger push in the following year to catch up. For small businesses, this means FY 2025 could bring even more opportunities WOSB and HUBZone contracts as procurement officers feel increased pressure to meet targets.
Subcontracting Opportunities
Even when prime contracts fall short, large prime contractors are required to develop subcontracting plans that include small business participation. This means WOSB and HUBZone businesses can still benefit by aligning themselves with large primes that must meet their subcontracting goals.
Agency Accountability
Agencies that consistently miss their goals can face oversight from Congress, GAO reports, and public scrutiny. This is one of the strongest reasons why the government must obligate the spend and why small businesses should remain proactive about certification.
What This Means for Small Businesses
The federal government’s shortfall in WOSB and HUBZone contracting goals in FY 2024 highlights both progress and challenges. On one hand, overall dollars to small businesses grew. On the other hand, equity programs designed to uplift women entrepreneurs and underserved communities fell short of their intended impact.
For businesses, this means two things. First, opportunities remain strong, and agencies will likely push harder to meet these goals in FY 2025. Second, small businesses that proactively position themselves with the right certifications stand to benefit the most as agencies look to close these gaps.
At FAMR, we specialize in helping businesses secure and maintain certifications such as WOSB and HUBZone so they can take advantage of set-aside opportunities. Our team of specialists provides hands-on support through the entire process so you are fully prepared to compete and win in the federal marketplace.
The Women Owned Small Business Program is a federal contracting program that reserves opportunities for women owned firms in industries where they have been historically underrepresented.
The HUBZone program supports small businesses in historically underutilized business zones by awarding them set aside contracts to stimulate economic development in distressed communities.
These goals are statutory targets that promote equity, diversity, and fair access to the federal marketplace. They also strengthen the government’s supply chain by broadening participation
FAMR’s certification specialists walk you through the requirements for programs like WOSB and HUBZone, prepare your application, and provide ongoing support so you can stay compliant and competitive.
