Skip to main content

How the New Administration Might Impact Small Businesses Serving Local Governments

Submitted by Connie Heath on January 27, 2021

How the New Administration Might Impact Small Businesses Serving Local Governments

The Biden Administration is likely to provide a very different environment for businesses providing all types of “smart” services, and this holds particularly true not just in the federal contracting world, but also for contractors seeking to do business with cities and other state and local governments. 

And the new administration has already offered some clues as to what changes might be in store as the new administration begins in 2021. Specifically, the Biden Administration has made firm and repeated commitments to increasing racial and socioeconomic equity with a number of campaign promises, including several that are directly tied to cities and other state and local entities. 

One of the campaign’s major plans has been to further incentivize governments and private sector partners to contract with small disadvantaged businesses, such as those meeting criteria to be classified as women-owned, minority-owned or SDVOSB (service-disabled veteran-owned small businesses). 

On the campaign website under the section related to jobs and economic recovery, Biden’s campaign writes that as he works to improve the federal procurement system, he will ask state and local governments and private sector partners to make their small and disadvantaged business contracting strategies publically available: “Biden will work with them to develop new goals for SDB contracting and time bound strategies for achieving these goals. The administration will facilitate partnerships between these entities and require every institution that applies for federal grants, contracts, and other opportunities to demonstrate in writing how they are taking affirmative steps to extend contracting opportunities to underrepresented groups. And, he will publish a nationwide scorecard of each state’s efforts to contract with small disadvantaged businesses.”

Additionally, Biden has stated that his administration will prioritize dollars going to vendors meeting certain criteria: “As called for in his plan to strengthen worker organizing, collective bargaining, and unions, Biden will require that all companies receiving procurement contracts are using taxpayer dollars to support good American jobs, including a commitment to pay at least $15 per hour, provide paid leave, maintain fair overtime and scheduling practices, and guarantee a choice to join a union and bargain collectively.” 

Which types of companies could benefit from this? While much is still uncertain about the specific contracting environment that this year and beyond will bring, much of the ground lost in 2020 should be reclaimed in 2021 in most industries. This should be especially true for businesses operating in technology and telecom, which is expected to rebound thanks to focus areas like modernization of legacy systems and IT systems consolidation, as well as improved digital government services.

How many of the initial campaign promises and projected focus areas actually come to pass does of course remain to be seen, but there is enough of an indication to at least conclude that the way the incoming administration handles state and local government procurement will be somewhat different than that of the outgoing administration. 

Businesses involved in providing services to city governments would be wise to prepare for the new administration’s changesthat 2021 and the years to come may bring, and to set up cohesive strategies that will allow them to take advantage of changes that the Biden Administration may make. 

Nick Schiffler is a business-to-government (B2G) market analyst and content marketer for GovWin from Deltek. Follow them on Twitter and LinkedIn to stay up to date with the latest government market insights.