Raw federal spending numbers are almost useless for a small business trying to figure out how much they can realistically win. A $100 million IDIQ ceiling does not tell you what the average task order looks like. Here is a more grounded look at what small businesses actually get paid.
Federal Contract Spending Overview
In FY2025, the federal government obligated approximately $700 billion in contracts. Of that:
- $189 billion (roughly 27%) went to small businesses — a number that has held roughly steady over the past five years.
- The Department of Defense is the largest buyer by far, accounting for over $400 billion in total contract spending.
- The top civilian agencies by spend include HHS, DHS, VA, DOE, and NASA.
These aggregate numbers can mislead. Most of the DoD spending is on large defense programs — aircraft carriers, fighter jets, satellite systems — that are nowhere near accessible to a typical small business. The actionable market is considerably smaller.
Average Award Size by Contract Type
Simplified acquisitions (under $250,000): Average award is around $45,000–$85,000, depending on the agency and category. These are the most common entry point for small business primes.
Set-aside contracts (small business, SDVOSB, 8(a), etc.): Average award varies widely, but many set-aside contracts run $500,000–$2 million for services. DoD set-asides tend to be larger than civilian agency set-asides.
8(a) sole-source awards: Can range from $50,000 to the statutory ceiling ($4.5 million for services, $7 million for manufacturing). The average 8(a) sole-source award has historically run around $600,000–$1.2 million.
GSA Schedule task orders for small businesses: Average is roughly $300,000–$800,000, though this varies enormously by schedule and agency.
Average Contract Size by Agency
Different agencies have very different buying patterns. Some practical observations from USASpending.gov data:
VA tends to have many mid-size awards for professional services, IT, and healthcare staffing — often in the $500,000–$5 million range for small business contracts.
Army/Navy/Air Force civilian support contracts and IT contracts often run $1–10 million for small businesses, especially on IDIQ vehicles.
USAID and State Department have smaller contract sizes on average for services work — often $200,000–$2 million.
DHS and FEMA have significant small business contracting activity in IT and program support — contracts typically $1–5 million.
What to Actually Target
For a first-year small business, target contracts in the $100,000–$500,000 range where:
1. The work is within your capabilities and past experience.
2. It is a set-aside for your specific designation (or at minimum a small business set-aside).
3. The agency has a track record of awarding to small businesses in your NAICS code.
4. You can find the buying history in USASpending.gov to understand typical award sizes and incumbents.
Once you have one or two wins as a prime, you can target larger vehicles.