The Biden Administration’s focus on promoting equity and diversity is influencing the way agencies track, manage, and pursue the number of “new entrants” at their respective agencies. According to a recent report, there has been a decrease of about 60% in the number of new entrants in the federal marketplace over the past ten years.[1]

In 2021, the administration released OMB Memorandum M-22-03 “Advancing Equity in Federal Procurement” and in that memo, the administration emphasized the significance of small business participation in the federal marketplace. That memo was then followed by OMB Memorandum M-23-11 “Creating a More Diverse and Resilient Marketplace through Increased Participation of New and Recent Entrants”, which provides guidance and strategies for agencies to track and increase particularly the number of small business new entrants participating in the federal marketplace. Diversity and resilience in the federal marketplace are top priorities for the Biden Administration. OMB Memorandum M-22-03 outlines management actions meant to, “strengthen the breadth and depth of the Federal Government’s small business supplier base…”[2]

The administration recognizes the role small businesses play in driving innovation and economic growth as they aim to increase the number of small business entrants in the marketplace by using the strategies and tactics outlined in the various OMB memos regarding advancing equity and inclusion. Those strategies include defining what makes an entity a “new entrant”, tracking and measuring the diversity of those new entrants, managing supply chain priorities, and finding new entrants to bring into the marketplace. These efforts continued in OMB Memorandum M-23-11, titled “Creating a More Diverse and Resilient Federal Marketplace through Increased Participation of New and Recent Entrants”. In that memo the Office of Management and Budget recognizes that “it is imperative that the Federal marketplace leverage this small business growth in supply chains that support agency missions, reverse the significant decline of small business participation in the Federal supplier base over the last decade, and increase the share of Federal contract dollars awarded to small disadvantaged businesses to 15 percent by 2025.”[3]

The federal government isn’t often the home of innovation which is why they rely on the ideas and solutions of small businesses that can be flexible and creative in their development. OMB believes that “increasing the number of small business entrants will promote competition, innovation, and enhance the government’s ability to address complex challenges.”[4]

Promoting small business new entrants in the federal marketplace is essential for creating a diverse and resilient vendor pool. The Biden Administration’s focus on this area, as outlined in OMB Memoranda M-22-03 and M-23-03, highlights the value of small businesses in driving innovation, economic growth, and equitable opportunities. By prioritizing, facilitating, and monitoring small business new entrants in particular, the federal marketplace can become more dynamic, efficient, and reflective of the rich tapestry and diversity of our nation.