Sen. Ed Markey (D-Mass.), ranking member of the small business committee, found more than 6,500 small firms have left the federal market in the last 15 months.
New data from Democrats on the Senate Small Business and Entrepreneurship Committee shine new light on just how rough its been for many small business contractors over the last 15 months.
A new report from Sen. Ed Markey (D-Mass.), ranking member of the committee, found since January 2025, when President Donald Trump took office, agencies have reduced spending with small business contractors by $47 billion and more than 6,500 firms have left the federal market.
“While hardworking small businesses across America struggle with rising costs and economic uncertainty, the Trump administration is slashing federal contracting opportunities, shutting out veteran-owned, women-owned, and minority-owned businesses from partnering with the federal government, and rewarding Trump’s CEO billionaire buddies with sweetheart deals and no-bid contracts,” Markey said in a statement to Federal News Network. “Small business contracting is down significantly, and ‘Main Street’ is paying the price. The federal government — the largest buyer of goods and services from small businesses — should be a partner with ‘Main Street,’ not a piggy bank for the wealthy and well-connected. We must fight back against this contracting catastrophe and ensure that America’s small businesses — not Trump’s insiders and enablers — have the opportunity to succeed.”
Markey’s staff staff used publicly available data from SAM.gov’s Contract Data Report Builder tool to create the report.
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They not only found total dollars going to small firms dropped over the last year, but every socio-economic group from small disadvantaged to women-owned to Historically Underutilized Business Zone (HUBZone) to veteran-owned and service-disabled veteran-owned small firms have felt the impact of the Trump administration’s policies.
“There are a lot of small businesses talking about their ability to stay afloat right now and these changes in the federal market don’t help,” said a Senate minority committee staff member, who requested anonymity in order to talk about the report before it’s released publicly. “We were expecting a drop off in the early months of the Trump administration as they were organizing their strategies. But now we have 16 months of data and activity to compare to the last 16 months of the Biden administration and there is a big drop in contracting across the board. The 8(a) program has seen lot of changes with SBA in terms of how they are chipping away at the integrity of program.”
Emails to SBA and the Office of Management and Budget seeking comments on Markey’s findings were not returned.
Emails to Sen. Joni Ernst (R-Iowa), chairwoman of the small business committee, seeking comment on the report also were not returned.
Not only have agencies reduced their spending with small firms, SBA has slowed down the certification of firms into socio-economic programs.
“Under the Trump administration, approvals for these key certifications—businesses owned by socially and economically disadvantaged individuals, women, veterans, service-disabled veterans, or businesses located in a HUBZone—are down 14% in total,” the report stated. “Some small business certification categories are particularly glaring. 8(a) certification approvals for small businesses owned by socially and economically disadvantaged individuals are down 92% with no approvals since August 2025. And, veteran and service-disabled veteran certification approvals are down 20%. Without these certifications, eligible small businesses are locked out of specific job opportunities that the federal government is supposed to set aside for them.”
Markey’s report says it’s not just with new contracts where small businesses are struggling. The data shows the Trump administration has terminated more than 65,000 contracts for convenience, of which small businesses held about 60% of them.
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The data also takes the termination of contracts down a level, finding veteran and service-disabled veteran-owned small businesses saw 6,435 contracts canceled for convenience, while small, disadvantaged businesses had 10,974 contracts ended. Additionally, the administration’s focus on the 8(a) program with audits and concerns around fraud has led to agencies cancelling 2,874 contracts for convenience, Markey’s report found.
“At a time when we need to increase our industrial base and have a robust team of small businesses, the Trump administration is undermining that by canceling existing contracts,” said a second staff member. “It really leads us to question what their agenda really is. This administration is choosing big businesses and corporations over small businesses. We see it with all these pet projects. They may say they care about main street, but that’s not what they are doing. We think they should put their money where their mouth is and support small businesses.”
Additionally, Markey found the administration’s decision to reduce spending with small firms impacted 48 out of 55 states and U.S. territories negatively. American Samoa, Delaware and Maine saw a reduction in small business contracting by more than 40% over the last 15 months when compared to the final 15 months of the Biden administration. Meanwhile, a dozen states saw reductions in small business contracting that totaled more than $1 billion with Virginia seeing the biggest drop by dollars of over $7.1 billion.
Markey’s findings become even more stark with new data from the Government Accountability Office showing federal procurement spending increased in fiscal 2025 to $793 billion from $755 billion in 2024.
GAO found that small business contracting dropped last year by about $3.7 billion to $172.6 billion. SBA hasn’t updated its annual small business scorecard for 2025 either. The 2024 scorecard showed agencies spent $183.5 billion with small firms in that year— topping the government’s record in 2023 by $5 billion.
A committee spokesman said the difference in their data and GAO’s is the timeline of the research. GAO looked at data for a 12 month period, which included some Biden administration spending. The committee looked at data over the last 15 months only under the Trump administration.
The staff members say they have not shared the data with Ernst’s team. They have tried to reach out to SBA, requesting Administrator Kelly Loeffler to testify. A June 3 letter to Loeffler from all the Democrats on the small business committee says she is “the only member of President Trump’s cabinet who has not agreed to testify before Congress this year and has not appeared before the Senate Small Business Committee in over a year.” The staff members say SBA has not responded to the committee’s letter or other inquiries.
The staff members say they hope the report shines a brighter light on the challenges small businesses are facing in the federal market. They say Markey’s “rule of two” bill is one of the ways the Senator is trying to reverse the negative trend that has emerged. The House Small Business Committee approved the bill in May. Markey’s companion bill has been before the committee since last August but hasn’t moved.
Read more: Acquisition Policy
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Jason Miller is executive editor of Federal News Network and directs news coverage on the people, policy and programs of the federal government.
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