How the SPUR Act Could Transform Small Business Participation in Federal Contracts

Key Points:

• The SPUR Act would expand SBA Procurement Scorecard reporting by tracking new small business entrants alongside existing contracting metrics.
• If enacted, the legislation could encourage agencies to place greater emphasis on attracting first time federal contractors.
• The bill does not create new contracting preferences or change SBA size standards, but it could influence how agency performance is evaluated.
• Contractors can prepare now by maintaining accurate registrations, strengthening capture strategies, and improving proposal readiness.

• What Is the SPUR Act?
• Why Small Business Participation Is Still a Federal Procurement Priority
• Key Provisions of the SPUR Act
• How the SPUR Act Could Change Federal Procurement
• Potential Impact on Small Businesses
• Could the SPUR Act Influence Proposal and Capture Strategies?
• Practical Steps Contractors Can Take Today
• Why the SPUR Act Matters Even Before It Becomes Law
• Common Questions About the SPUR Act

Small businesses play a vital role in the federal marketplace by providing innovation, specialized expertise, and competition across nearly every industry. Although the federal government consistently exceeds its statutory goal of awarding at least 23% of prime contract dollars to small businesses, policymakers continue to examine whether existing performance metrics fully reflect the health and accessibility of the federal supplier base. One area receiving increasing attention is whether new small businesses are successfully entering the federal contracting market or whether contract awards remain concentrated among established vendors.

The Small Business Procurement and Utilization Reform (SPUR) Act seeks to address that question by proposing changes to how the U.S. Small Business Administration measures agency performance in supporting small business participation. In addition to existing procurement metrics, the legislation would also highlight the number of businesses receiving their first federal contract award. Although the SPUR Act has not yet become law, it signals a growing interest in evaluating not only how much the government spends with small businesses, but also how effectively agencies create opportunities for new market entrants.

What Is the SPUR Act?

The Small Business Procurement and Utilization Reform (SPUR) Act is a proposed amendment to the Small Business Act that aims to improve how federal agencies measure and report their success in supporting small businesses. Rather than changing federal set aside programs, eligibility rules, or contract award procedures, the bill focuses on the way agency performance is evaluated through the annual Small Business Procurement Scorecard administered by the U.S. Small Business Administration (SBA).

The legislation was introduced in the U.S. House of Representatives in January 2025 with bipartisan support. It passed the House in February 2025 and was subsequently referred to the Senate Committee on Small Business and Entrepreneurship, where it remains under consideration. Because the bill has not yet been enacted, its provisions are not currently part of federal procurement requirements.

At its core, the SPUR Act is intended to address a concern that existing procurement metrics do not always show whether new small businesses are successfully entering the federal marketplace. Agencies may achieve or exceed government wide small business contracting goals while still relying heavily on companies that already have established federal contracting experience. As a result, overall contract spending can increase without significantly expanding the number of businesses participating in federal procurement.

To provide a more complete picture, the bill proposes adding information about “new small business entrants” to the SBA’s annual scorecard. Under the proposed legislation, this refers to a small business receiving its first federal prime contract after not previously receiving a prime contract from any federal agency. The scorecard would also include this information across different socioeconomic categories and North American Industry Classification System (NAICS) sectors, allowing policymakers to better understand where new businesses are entering the federal procurement system.

If enacted, the SPUR Act would introduce several notable changes to the current reporting framework, including:

• Adding the number of new small business entrants to the SBA Procurement Scorecard.
• Reporting first time prime contract awards across different NAICS industries.
• Tracking new entrants within major SBA socioeconomic contracting programs.
• Comparing new entrant data with previous fiscal years whenever historical data is available.
• Providing agencies and policymakers with additional information to evaluate long term supplier base growth.

The proposed legislation fits within the broader framework of the Small Business Act, which seeks to ensure that small businesses have meaningful opportunities to compete for federal contracts. While many provisions of the Act establish contracting programs, size standards, and participation goals, the SPUR Act focuses on measuring outcomes more effectively. Instead of creating new contracting preferences, it would provide additional data that could help agencies evaluate whether their procurement strategies are expanding access to federal contracting for the next generation of small business suppliers.

Why Small Business Participation Is Still a Federal Procurement Priority

Supporting small businesses remains a central objective of federal procurement policy. The federal government has established government wide contracting goals to encourage agencies to work with a diverse range of suppliers while promoting competition, innovation, and economic growth. Agencies are expected to award at least 23% of eligible prime contract dollars to small businesses each fiscal year, along with separate goals for several socioeconomic programs.

Recent procurement results show that these goals continue to be met. In recent fiscal years, the federal government has exceeded the 23% statutory target, with small businesses receiving hundreds of billions of dollars in prime contract awards. While these figures demonstrate strong participation, they do not necessarily show whether new businesses are entering the federal marketplace.

One reason is that contract value measures spending, not supplier growth. Agencies can achieve their small business goals even if a significant share of awards continues to go to experienced federal contractors. As a result, policymakers are increasingly interested in whether procurement strategies are also creating opportunities for companies seeking their first federal prime contract.

Procurement Objective	Why It Matters
Award contract dollars to small businesses	Supports competition and economic growth.
Meet statutory small business contracting goals	Measures agency performance against federal targets.
Expand participation by new contractors	Helps grow and diversify the federal supplier base.
Increase competition across industries	Encourages innovation and reduces reliance on a limited number of vendors.

For many first time contractors, entering the federal market remains challenging. Understanding acquisition regulations, identifying suitable opportunities, building past performance, and submitting compliant proposals all require time and resources. The SPUR Act reflects growing interest in measuring not only how much the government spends with small businesses, but also how effectively agencies help new companies become federal contractors.

Key Provisions of the SPUR Act

The SPUR Act does not introduce new contracting programs or change how federal agencies award contracts. Instead, it proposes several targeted updates to the way the SBA measures and reports agency performance. Collectively, these provisions are intended to provide a clearer picture of how effectively agencies are expanding participation by small businesses, particularly those entering the federal marketplace for the first time.

New Small Business Entrants

One of the most important provisions of the bill is the introduction of the term “new small business entrant.” Under the proposed legislation, this refers to a small business that receives its first federal prime contract and has not previously been awarded a prime contract by any federal agency. By tracking these first time awards, the government would be able to measure how successful agencies are at bringing new suppliers into federal procurement.

Changes to the SBA Procurement Scorecard

The SPUR Act would expand the SBA Procurement Scorecard by adding data on new small business entrants. Today, the scorecard primarily evaluates agencies based on their performance against established small business contracting goals. The proposed legislation would add another performance indicator by showing how many first time small business contractors each agency helps bring into the federal market.

NAICS Based Reporting

The bill also proposes reporting new entrant data by North American Industry Classification System (NAICS) code. This would allow the SBA and federal agencies to identify industries where new small businesses are entering the market successfully, as well as sectors where participation remains limited. More detailed reporting could help agencies improve outreach and identify areas that may benefit from additional supplier development efforts.

Annual Performance Comparisons

Another provision would require annual comparisons whenever prior year data is available. Comparing results across fiscal years would make it easier to identify long term trends rather than relying on a single year’s performance. Agencies could evaluate whether the number of new market entrants is increasing, remaining stable, or declining over time.

Greater Transparency in Small Business Participation

Collectively, these proposed changes are intended to improve transparency rather than create additional contracting requirements. If enacted, the SPUR Act would provide policymakers, agencies, and industry with better information about how federal procurement supports the growth of the small business supplier base. Instead of focusing only on total contract dollars, stakeholders would also gain insight into how many companies are successfully becoming federal prime contractors for the first time and where those opportunities are emerging across different industries and socioeconomic programs.

Price Reporter Insight: The proposed changes may appear limited because they focus on reporting rather than contract award procedures. However, changes to procurement reporting often influence how agencies evaluate their own performance and prioritize the various improvement procedures. Even relatively modest changes to performance measurement can shape how procurement strategies are developed and evaluated in future fiscal years.

How the SPUR Act Could Change Federal Procurement

If enacted, the SPUR Act could influence how federal agencies evaluate their efforts to support small business participation. While the legislation would not change source selection procedures or create new contract award preferences, it could encourage agencies to look beyond total contract dollars when assessing procurement performance. Greater emphasis may be placed on whether procurement strategies help qualified businesses enter the federal market for the first time.

This shift could also increase attention to new market entrants during acquisition planning. Agencies may place greater value on outreach activities, industry engagement, and market research that identify capable small businesses with little or no federal contracting experience. Over time, this could encourage procurement teams to consider whether upcoming opportunities are accessible to a broader range of qualified vendors.

The proposed reporting requirements may also support more data driven procurement decisions. By collecting information by NAICS code and tracking year over year trends, agencies could gain a better understanding of which industries continue to attract new suppliers and which sectors may face barriers to entry. These insights could help shape future outreach efforts and supplier development initiatives.

If the SPUR Act becomes law, agency performance evaluations could also evolve. In addition to measuring achievement against existing small business contracting goals, procurement leaders may receive greater visibility into how effectively their organizations expand the federal supplier base. Although the legislation does not establish new performance standards, the additional reporting could influence how agencies assess the long term success of their small business programs.

For contractors, the practical impact may extend beyond reporting. Companies seeking their first federal prime contract could benefit if agencies place greater emphasis on attracting new suppliers, while experienced contractors may find increased opportunities to build partnerships with emerging small businesses. Although the extent of these changes would depend on future implementation, the SPUR Act reflects a broader interest in measuring not only procurement spending, but also sustainable growth in federal small business participation.

Potential Impact on Small Businesses

If enacted, the SPUR Act could create greater visibility for businesses seeking their first federal prime contract. By adding new small business entrants to the SBA Procurement Scorecard, the legislation would make it easier to measure how successfully agencies bring new suppliers into the federal marketplace. Although this would not guarantee contract awards, it could encourage agencies to place more emphasis on expanding their supplier base.

For companies with limited or no federal contracting experience, this shift may lead to additional opportunities to compete. If agencies place greater emphasis on attracting first time contractors, they may increase outreach efforts, strengthen market research, or adopt procurement strategies that make it easier for qualified businesses to participate. Over time, this may help more companies compete for and secure their first federal prime contract and begin building a record of federal past performance.

Early contract awards are particularly valuable because past performance is often an important evaluation factor in future procurements. Successfully completing an initial contract can strengthen a company’s qualifications for larger or more complex opportunities and improve its long term competitiveness in the federal market.

To be well positioned if these trends continue, small businesses should focus on several key areas:

• Maintain an active SAM.gov registration and a valid Unique Entity Identifier (UEI).
• Verify that NAICS codes accurately reflect the company’s capabilities.
• Obtain any applicable small business socioeconomic certifications.
• Develop a clear capability statement tailored to target agencies.
• Build relationships with contracting officers, agency small business offices, and potential teaming partners.

While the SPUR Act is primarily a reporting and measurement proposal, it reflects broader efforts to expand participation by qualified small businesses. Companies that establish a strong compliance foundation and prepare for federal opportunities early may be better positioned to benefit if agencies place greater attention on attracting new market entrants.

Could the SPUR Act Influence Proposal and Capture Strategies?

Although the SPUR Act focuses on agency reporting rather than proposal requirements, it could still influence how contractors approach capture planning and proposal development if enacted. Companies that understand the direction of federal procurement policy may be better prepared to align their strategies with evolving agency priorities.

One area that could receive greater attention is the selection and positioning of small business partners. Over time, prime contractors may place greater emphasis on identifying qualified businesses that can make meaningful contributions throughout contract performance rather than involving partners only to satisfy participation objectives. Strong teaming arrangements supported by clearly defined responsibilities are often more credible than partnerships with limited operational involvement.

Capture planning may also begin earlier for companies seeking to enter the federal market for the first time. Contractors could invest more effort in identifying agencies that have historically awarded contracts to new vendors, researching upcoming procurement opportunities, and understanding agency specific buying patterns. This information can help businesses focus their resources on opportunities that are more closely aligned with their capabilities.

Market research is another area where the proposed legislation could have an indirect impact. If agencies begin tracking new small business entrants more closely, contractors may place greater value on analyzing procurement forecasts, historical contract awards, industry engagement events, and agency procurement data before deciding which opportunities to pursue.

Proposal teams may also benefit from demonstrating meaningful small business participation when responding to federal solicitations. While the SPUR Act would not create new proposal evaluation criteria, agencies may increasingly value well developed teaming strategies, realistic work allocations, and partnerships that contribute to a stronger and more diverse supplier base. Contractors that align their proposals with agency objectives and present credible participation strategies may strengthen their overall competitive position as federal procurement continues to evolve.

Price Reporter Insight: Successful federal proposals have always been about more than simply meeting minimum requirements. As agencies continue to emphasize meaningful small business participation, contractors that build genuine partnerships and support them with clear proposal narratives are likely to present a stronger overall value proposition, regardless of the final outcome of the SPUR Act.

Practical Steps Contractors Can Take Today

The SPUR Act has not yet become law, so contractors are not required to change their compliance processes or proposal documentation. However, the legislation highlights several areas that businesses can strengthen now to improve their readiness for future opportunities. Many of these actions are considered good practices regardless of whether the bill is ultimately enacted.

Contractors should consider the following steps:

• Confirm that the company’s SAM.gov registration is active and that UEI information is accurate.
• Review NAICS codes to ensure they reflect the products and services the business currently offers.
• Keep capability statements up to date and tailor them to the agencies and programs being targeted.
• Monitor agency procurement forecasts and upcoming opportunities to identify contracts that match the company’s capabilities.
• Develop relationships with contracting officers, small business specialists, and potential prime contractor partners through industry events and outreach activities.
• Stay informed about the legislative status of the SPUR Act and other federal procurement initiatives that may affect small business participation.
• Maintain organized internal records of contract awards, past performance, certifications, and other information commonly required during proposal development.
• Periodically review teaming strategies to ensure that partner relationships support long term business objectives and meaningful contract performance.

Preparing in these areas can help contractors respond more effectively to federal opportunities while reducing administrative challenges during the proposal process. Even if the SPUR Act does not become law in its current form, businesses that invest in strong compliance practices, market research, and strategic planning are generally better positioned for long term success in the federal marketplace.

Why the SPUR Act Matters Even Before It Becomes Law

Although the SPUR Act has not yet been enacted, it reflects a broader direction in federal procurement policy. Government agencies are increasingly interested in measuring procurement outcomes rather than relying solely on total contract dollars. Understanding how many new small businesses successfully enter the federal marketplace could provide a more complete picture of long term supplier base growth and help agencies evaluate the effectiveness of their small business initiatives.

For contractors, the legislation serves as a reminder that preparation remains one of the most important factors in long term success. Businesses that maintain accurate registrations, understand agency buying patterns, develop strong capability statements, and invest in effective proposal and capture strategies may be better positioned if reporting and evaluation practices continue to evolve. Regardless of the SPUR Act’s final outcome, agencies are expected to continue seeking ways to expand participation by qualified small businesses and strengthen competition across the federal marketplace.

As federal procurement policies continue to evolve, staying informed about legislative and regulatory developments becomes increasingly important for contractors. For more than 20 years, Price Reporter has helped businesses obtain, manage, and grow their GSA business. Through GSA consulting, contract management, market intelligence, and automation solutions, our team helps contractors adapt to changing federal requirements and build long term success in the government marketplace.

Common Questions About the SPUR Act

Is the SPUR Act already law?

No. The SPUR Act has passed the U.S. House of Representatives but has not completed the legislative process. Before it can become law, it must also pass the Senate and be signed by the President.

Will the SPUR Act change SBA size standards?

No. The proposed legislation does not modify SBA size standards or change how a business qualifies as small. Existing size standards and eligibility requirements would remain the same.

Does the SPUR Act create new contracting preferences?

No. The bill does not establish new set aside programs or give additional contracting preferences to small businesses. Instead, it focuses on expanding the information included in the SBA Procurement Scorecard by tracking businesses that receive their first federal prime contract.

Will the SPUR Act affect existing federal contracts?

No. The proposed legislation does not modify the terms or administration of existing federal contracts. Its primary purpose is to expand SBA reporting on small business participation. If enacted, the legislation would affect how the SBA measures and reports agency performance in supporting small businesses.

Could the SPUR Act influence future procurement policy?

Potentially, yes. If enacted, the additional reporting could provide agencies and policymakers with better data about how new businesses enter the federal marketplace. Over time, those insights may help shape future procurement initiatives, outreach efforts, and strategies designed to expand participation by qualified small businesses.