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INTRODUCTION

The Office of Small and Disadvantaged Business Utilization (OSDBU) was created pursuant to Section 15(K) of the Small Business Act (15 U.S.C. 644(k)) as enacted by Section 221 of Public Law 95-507.  Each federal agency is required to have an OSDBU, which, by statute, reports directly to the head of the agency.  The primary responsibility of the OSDBU is to ensure that Small Businesses are treated fairly and that they have an opportunity to compete and be selected for a fair amount of the agency's contract dollars. 

The Small Business Act (as codified at 15 U.S.C. 633) also authorized the creation of the U.S. Small Business Administration (SBA).  One of SBA’s responsibilities is to negotiate with the federal OSDBUs to ensure that Small Businesses have the maximum practicable opportunity to provide goods and services to the federal government.  Each year, SBA works to meet or exceed the following government-wide procurement targets, which are set by federal legislation.  Currently, these targets are:

• 23 percent to Small Businesses (SB);
• 5 percent to Small Disadvantaged Businesses (SDB);
• 5 percent to Woman-Owned Businesses (WOB);
• 3 percent to Historically Underutilized Business Zone (HUBZone) Businesses; and
• 3 percent to Service-Disabled Veteran-Owned Small Business (SDVOSB).

In its yearly negotiations, SBA may reach agreements with individual federal agencies for procurement targets that differ from the government-wide ones listed above (e.g., in Fiscal Year (FY) 2006, DOT had a 36 percent SB procurement target) as long as the sum total of the different agencies’ procurement targets achieve the percentages legislatively required for the federal government as a whole.