Association for Public Policy Analysis & Management

It is an explicit policy goal of the United States to promote small business, including in contracting with the federal government.  The majority of federal contract dollars are awarded by the Department of Defense (DoD), which has recently taken steps to increase contracting opportunities for small businesses.  However, DoD suffered severe and unexpected budget cuts in fiscal 2013 as a result of sequestration and was forced to dramatically reduce contract obligations.  Previous studies have investigated the relationship between DoD and small business contractors and highlighted factors that predict the extent of awards to small vendors.  This paper builds on that research to examine the effect of sequestration on the likelihood of small vendors winning contract awards from DoD, using a probability model with prime contracting data from the Federal Procurement Data System - Next Generation and subcontracting data from the FFATA Subaward Reporting System.