What is the 5% SDVOSB goal?

The 5% Service-Disabled Veteran-Owned Small Business (SDVOSB) goal is a statutory minimum set by Congress requiring federal agencies to award at least 5% of prime contract dollars to SDVOSBs each fiscal year. The goal is mandated under the National Defense Authorization Act (NDAA) and tracked annually by the Small Business Administration (SBA) via its Procurement Scorecard.

Did the federal government miss the 5% SDVOSB goal in FY2025?

Yes. According to preliminary SBA Procurement Scorecard data and USAspending.gov, the federal government awarded approximately 4.74% of prime contract dollars to SDVOSBs in FY2025 — missing the 5% statutory goal by approximately $2 billion. This was the first time the federal government missed the 5% SDVOSB goal since 2011.

Which agencies missed the SDVOSB goal in FY2025?

Based on approximate FY2025 data, the agencies with the largest shortfalls versus the 5% goal include the Department of Defense (~4.4%, approximately $1.3B short), Department of State (~3.5%), Department of Treasury (~3.2%), Department of Health & Human Services (~4.0%), and the Department of Energy (~4.0%). The Department of Veterans Affairs and Department of Homeland Security exceeded the 5% goal. All figures are approximate FY2025 and sourced from SBA Procurement Scorecards and USAspending.gov.

What is the FY2026 SDVOSB catch-up wave?

The FY2026 SDVOSB catch-up wave refers to the increased pressure on federal agencies to award contracts to SDVOSBs in fiscal year 2026 to compensate for the approximately $2 billion shortfall in FY2025. Agencies that missed their 5% goal face Congressional and SBA scrutiny. Common mechanisms for closing the gap include redirecting procurements to SDVOSB set-asides, increasing sole-source awards under FAR 19.1406, and prioritizing SDVOSB firms on contract recompetes.

Where does the 5% goal come from? Is it law?

Yes, the 5% SDVOSB goal is statutory. It is mandated under the National Defense Authorization Act (NDAA) and codified at 15 U.S.C. § 657f. Congress requires the federal government as a whole — and individual agencies — to award at least 5% of prime contract dollars and 5% of subcontract dollars to SDVOSBs annually. The SBA tracks performance via its annual Procurement Scorecard.

SDVOSB GovCon Platform — 5% Goal Tracker

The 5% SDVOSB Goal Tracker

Name: FY2025 Federal Agency SDVOSB Goal Performance Data
Creator: BidStride
License: https://creativecommons.org/publicdomain/zero/1.0/

FY2025 was the first year since 2011 that the federal government missed the 5% SDVOSB set-aside goal — by approximately $2 billion. This tracker shows agency-by-agency performance and the catch-up gap heading into FY2026.

Key findings — BidStride Research Team

Federal agencies awarded approximately $28.6 billion to SDVOSBs in FY2025 across roughly 52,000 contract actions, missing the 5% SDVOSB goal by approximately $2 billion.
FY2025 was the first year since 2011 that the federal government missed the 5% SDVOSB goal.
The Department of Defense was the largest single source of the FY2025 SDVOSB goal shortfall, awarding approximately 4.4% of contract dollars to SDVOSBs against the 5% goal.

FY2025 Headline Numbers

By the numbers: FY2025 SDVOSB performance

All figures are approximate FY2025, sourced from SBA Procurement Scorecards and USAspending.gov bulk data. Federal SDVOSB award data for FY2025 is preliminary and may revise upward as awards finalize.

5.0%

Federal-wide SDVOSB goal

Statutory minimum under the NDAA — mandated every fiscal year, every agency.

~4.74%

Actual FY2025 SDVOSB award rate

Approximate federal-wide award percentage per SBA Procurement Scorecard FY2025 (preliminary).

~$2B

FY2025 SDVOSB shortfall vs. 5% goal

Approximate gap between what agencies awarded and what the NDAA requires. First miss since 2011.

2011

Last year the government missed the 5% goal

FY2025 was the first failure to meet the SDVOSB goal since FY2011 — 14-year streak broken.

~$28.6B

Total SDVOSB awards FY2025

Approximate total prime contract dollars awarded to SDVOSB-certified firms in FY2025.

~52,000

SDVOSB contract actions FY2025

Approximate number of individual contract actions awarded to SDVOSBs in FY2025.

Sources: SBA Procurement Scorecard FY2025 (preliminary) • USAspending.gov bulk data • NDAA Section 821 • 15 U.S.C. § 657f. Researched by the BidStride Research Team.

Last updated: May 2026

Agency-by-Agency Performance

FY2025 SDVOSB goal performance by agency

Sorted by shortfall size, largest first. All figures are approximate FY2025. Agencies that exceeded the 5% goal appear at the bottom.

Agency	FY25 SDVOSB Awards	SDVOSB %	Gap vs. 5% Goal	Catch-Up Pressure
Department of Defense	$9.5B approx.	4.4%approx.	$1.3B short	High
Department of State	$0.3B approx.	3.5%approx.	$0.13B short	High
Department of Treasury	$0.2B approx.	3.2%approx.	$0.11B short	High
Department of Health & Human Services	$0.9B approx.	4.0%approx.	$0.2B short	Medium
Department of Energy	$0.4B approx.	4.0%approx.	$0.1B short	Medium
Department of Justice	$0.4B approx.	4.2%approx.	$0.1B short	Medium
EPA	$0.05B approx.	3.8%approx.	$0.02B short	Medium
GSA	$0.8B approx.	4.5%approx.	$0.1B short	Low-Medium
NASA	$0.2B approx.	4.7%approx.	$0.01B short	Low
Department of Transportation	$0.3B approx.	4.5%approx.	$0.03B short	Low
Department of Homeland Security	$1.2B approx.	5.5%approx.	EXCEEDS goal	Low
Department of Veterans Affairs	$11.0B approx.	22.0%approx.	EXCEEDS goal	Low

Data note: All dollar figures and percentages are approximate FY2025, aggregated from public SBA Procurement Scorecard data and USAspending.gov bulk downloads. FY2025 federal SDVOSB award data is preliminary and may revise upward as contract modifications and late reporting finalize. "Catch-Up Pressure" is an editorial assessment by the BidStride Research Team based on distance from the 5% goal and agency procurement volume.

Why This Matters for SDVOSB-Led Firms

Three reasons FY2026 is an unusual opportunity

FY2026 catch-up wave creates over-award pressure

Agencies that missed their FY2025 SDVOSB goal face SBA scrutiny and Congressional pressure. The most common response is over-awarding in the following fiscal year — directing more set-aside contracts, sole-source awards, and recompete wins to SDVOSBs to close the gap before the new scorecard drops.

DoD is the single biggest catch-up opportunity

The Department of Defense accounted for approximately $1.3 billion of the FY2025 SDVOSB shortfall — roughly two-thirds of the total federal gap. DoD is also the largest SDVOSB buyer by volume. SDVOSB-led IT, engineering, and construction firms with DoD past performance are positioned for the highest catch-up demand in FY2026.

Sole-source authority under FAR 19.1406 is one tool agencies use

When an agency is behind on its SDVOSB goal, contracting officers have authority to award sole-source contracts to SDVOSBs for acquisitions below $4 million (or $6.5 million for manufacturing) under FAR 19.1406. This is one of the fastest mechanisms agencies use to close a goal gap — no competitive solicitation required.

FY2026 Outlook

Where the FY2026 catch-up money goes

Agencies do not have a single lever to close a goal gap. They use a combination of mechanisms — all of which create distinct contracting opportunities for SDVOSB-led firms.

Over-awarding on SDVOSB set-asides

Agencies redirect competitive procurements to SDVOSB set-asides — restricting competition to SDVOSB-certified firms only. Contracts that would have been full-and-open or 8(a) in prior years get re-designated as SDVOSB set-asides to close the percentage gap.

Increasing sole-source SDVOSB awards under FAR 19.1406

For acquisitions below $4 million (or $6.5 million for manufacturing), contracting officers can skip competitive solicitation and award directly to a single SDVOSB. Agencies behind on their goal use sole-source authority more frequently in the following FY — creating direct outreach opportunities for qualified firms.

Prioritizing SDVOSBs on recompetes

When an existing contract comes up for recompete and the incumbent is not an SDVOSB, agencies under goal pressure will often restructure the recompete as an SDVOSB set-aside. Firms with past performance at goal-lagging agencies are positioned to win these recompetes.

Redirecting small IDIQs and task orders

Agencies with existing IDIQ vehicles sometimes redirect task order awards to SDVOSB-eligible awardees on the vehicle, or establish new SDVOSB-only BPAs (Blanket Purchase Agreements) to generate SDVOSB award volume quickly at the end of a fiscal year.

Methodology & Sources

Data sources and caveats

Primary sources: SBA Procurement Scorecards FY2025 (preliminary, published annually by the U.S. Small Business Administration) and USAspending.gov bulk contract award data. Agency-level figures are aggregated from these public datasets.

Data caveat: Federal SDVOSB award data for FY2025 is preliminary as of the date this tracker was last updated. Award figures may revise upward as contract modifications, late-reporting actions, and obligation adjustments are processed. The SBA typically publishes its final annual Procurement Scorecard in Q2 or Q3 of the following fiscal year.

Rounding: All dollar figures are approximate and rounded to one decimal place for readability. Percentages are rounded to one decimal place. The federal-wide SDVOSB award percentage (~4.74%) is a weighted aggregate across all agencies.

"Catch-Up Pressure" rating: Editorial assessment by the BidStride Research Team based on each agency's distance from the 5% goal, total procurement volume, and historical scoring patterns. Not an SBA-official designation.

Update cadence: This tracker is updated when new SBA Procurement Scorecard data is published, typically Q2–Q3 of the following fiscal year.

Researched by the BidStride Research Team.

Last updated: May 2026

FAQ

Questions about the 5% SDVOSB goal

What is the 5% SDVOSB goal?: The 5% Service-Disabled Veteran-Owned Small Business (SDVOSB) goal is a statutory minimum set by Congress requiring federal agencies to award at least 5% of prime contract dollars to SDVOSBs each fiscal year. The goal is mandated under the National Defense Authorization Act (NDAA) and codified at 15 U.S.C. § 657f. The SBA tracks agency performance annually via its Procurement Scorecard.
Did the federal government miss the 5% SDVOSB goal in FY2025?: Yes. According to preliminary SBA Procurement Scorecard data and USAspending.gov, the federal government awarded approximately 4.74% of prime contract dollars to SDVOSBs in FY2025 — missing the 5% statutory goal by approximately $2 billion. FY2025 was the first time the federal government missed the 5% SDVOSB goal since 2011.
Which agencies missed the SDVOSB goal in FY2025?: Based on approximate FY2025 data, agencies with the largest shortfalls versus the 5% goal include the Department of Defense (~4.4%, approximately $1.3 billion short), Department of State (~3.5%), Department of Treasury (~3.2%), Department of Health & Human Services (~4.0%), Department of Energy (~4.0%), and the Department of Justice (~4.2%). The Department of Veterans Affairs (22.0%) and Department of Homeland Security (5.5%) exceeded the 5% goal. All figures are approximate FY2025 from SBA and USAspending.gov data.
What is the FY2026 SDVOSB catch-up wave?: The FY2026 SDVOSB catch-up wave refers to the increased pressure on federal agencies to award more contracts to SDVOSBs in fiscal year 2026 to compensate for the approximately $2 billion FY2025 shortfall. Agencies that missed their 5% goal face Congressional and SBA scrutiny. Common catch-up mechanisms include redirecting procurements to SDVOSB set-asides, increasing sole-source awards under FAR 19.1406, and prioritizing SDVOSB firms on contract recompetes.
Where does the 5% goal come from? Is it law?: Yes, the 5% SDVOSB goal is statutory. It is mandated under the National Defense Authorization Act (NDAA) and codified at 15 U.S.C. § 657f. Congress requires the federal government as a whole — and individual agencies — to award at least 5% of prime contract dollars and 5% of subcontract dollars to SDVOSBs annually. The SBA tracks performance via its annual Procurement Scorecard and reports results to Congress.
How can my SDVOSB-led firm benefit from the catch-up wave?: SDVOSB-led firms can position for the FY2026 catch-up wave by targeting agencies with the largest shortfalls — particularly the Department of Defense, Department of State, and Department of Treasury. Strategies include pursuing sole-source contracts under FAR 19.1406 (for acquisitions below $4 million, or $6.5 million for manufacturing), identifying SDVOSB set-aside opportunities at agencies under goal pressure, and monitoring recompetes at lagging agencies. BidStride tracks agency goal-gap progress and surfaces these opportunities in your daily digest.

More questions? Email the team — Richard replies personally to SDVOSB inquiries.

Last updated: May 2026

SDVOSB GovCon Platform

Built for the firms positioned to capture the FY2026 catch-up wave

BidStride is built for the SDVOSB-led firms positioned to capture the FY2026 catch-up wave. Track agency goal gaps, surface sole-source signals, and get in front of the right contracting officers before the wave crests.

Built by Richard Faherty — Navy ETN (Electronics Technician Nuclear), USS Maryland reactor operator, 10 years of service.

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Sources

U.S. Small Business Administration — Annual Procurement Scorecard, FY2025 (preliminary). sba.gov/about-sba/sba-performance/open-government/data-sharing/procurement-data.
USAspending.gov — Federal Award Data, SDVOSB contract actions FY2025 bulk download.
National Defense Authorization Act (NDAA) — SDVOSB set-aside mandate, codified at 15 U.S.C. § 657f.
Federal Acquisition Regulation (FAR) Part 19.14 — Service-Disabled Veteran-Owned Small Business Program; FAR 19.1406 — Sole-Source Awards.

All data labeled "approximate FY2025." Federal SDVOSB award data for FY2025 is preliminary and subject to revision. This tracker is maintained by the BidStride Research Team and is not affiliated with or endorsed by the SBA or any federal agency.