Under the Small Business Act, SBA plays an important role in ensuring that small businesses gain access to federal contracting opportunities. SBA negotiates specific agency-wide goals to help ensure that the federal government collectively meets the 23 percent statutory goal for contract dollars awarded to small businesses. In addition, SBA administers the 8(a), HUBZone, WOSB, and SDVOSB programs that are intended to assist small businesses of various socioeconomic categories. Firms with multiple socioeconomic designations can receive set-asides or sole source contracts under one or more of the four programs. For example, a HUBZone firm that also qualifies as an SDVOSB could receive an award under the SDVOSB program as well as another under the HUBZone program. Each program has different requirements. As of March 2017, Puerto Rico had 76 8(a) certified businesses, 40 HUBZone certified businesses, 256 WOSBs, and 56 SDVOSBs. 8(a) Program: The purpose of the 8(a) program is to develop small businesses owned by socially and economically disadvantaged individuals. A business must meet several initial eligibility requirements to qualify for the 8(a) program. For example, the firm must be a small business as defined by SBA, it must be owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and U.S. citizens, and it must demonstrate the potential for success. Upon certification by SBA, the business may stay in the program for 9 years if it meets other requirements for continued participation. HUBZone Program: Congress created the HUBZone program in 1997 to stimulate economic development in economically distressed communities by designating certain areas as HUBZones. There are several types of HUBZone areas, including qualified census tracts, which are determined by the area’s poverty rate or household income. SBA updates HUBZone designations based on whether areas meet statutory criteria, such as having certain income levels or poverty or unemployment rates. For example, SBA revised the designation of HUBZones based on the release of the 2010 U.S. Census Bureau data in October 2011. For a business to be certified by SBA as a HUBZone business, it must meet the following criteria: be small by SBA size standards, be at least 51 percent owned and controlled by U.S. citizens, have its principal office—the location where the greatest number of employees perform their work—located in a HUBZone, and have at least 35 percent of its employees reside in a HUBZone. On June 16, 2016, SBA announced that it had revised the definition of qualified census tracts eligible to be designated as HUBZones to provide additional opportunities for small businesses in Puerto Rico and nationwide to participate in the HUBZone program. Previously, in addition to poverty rate and income, a statutory population cap limited the number of eligible census tracts. Under the cap, in metropolitan areas where more than 20 percent of the population qualified, the list of eligible census tracts was ordered from the highest percentage of eligible households to the lowest until the 20 percent limit was exceeded. By lifting the population cap, SBA expanded the number of eligible census tracts in Puerto Rico by 516 (from 260 to 776). As a result, nearly all of Puerto Rico now qualifies as a HUBZone (see fig.1). In the rest of the United States, the number of eligible census tracts increased by 1,499 (from 15,938 to 17,437). (See app. II for maps of the newly eligible and existing census tracts in the United States, excluding U.S. territories.) WOSB Program: In 1994, Congress established a goal of not less than 5 percent of the total value of all prime contract and subcontract awards for each fiscal year for WOSBs to increase federal contracting opportunities for WOSBs. In 2000, Congress authorized the WOSB program and SBA issued implementing regulations that became effective in 2011. Under the program, contracts are reserved for WOSBs in designated industries in which WOSBs and economically disadvantaged WOSBs were historically underrepresented. Set-aside and sole source awards can be made to WOSBs only in those designated industries. Various changes have been made to the WOSB program since it was established, including the removal of limitations on the amount of contract dollars in a set-aside that WOSBs can compete for in 2013 and allowing sole source awards starting in October 2015. Among other eligibility requirements, a business must be at least 51 percent owned and controlled by one or more women; it must be certified as eligible by a third party or be self-certified by the business owner; and the owner must provide documents demonstrating that the business meets program requirements. SDVOSB Program: The Veterans Entrepreneurship and Small Business Development Act of 1999 established an annual government-wide goal of not less than 3 percent of the total value of all prime contract and subcontract awards for SDVOSBs. In addition, the Veterans Benefits Act of 2003 gave federal contracting officers the authority to restrict competition to SDVOSBs and award a sole source or set-aside contract where certain criteria are met. To be eligible, the business must be majority-owned by one or more service-disabled veterans who manage and control daily business operations, and it must qualify as a small business under the North American Industry Classification System Code industry-size standards. The Veterans Benefits, Health Care, and Information Technology Act of 2006 requires the Department of Veterans Affairs (VA) to set aside contracts for SDVOSBs and other veteran-owned small businesses (unless a sole source contract is used) if the contracting officer expects two or more such firms to submit awards. VA may make sole source awards of up to $5 million, without a determination that only an SDVOSB or a veteran-owned small business is available. Other categories. Other socioeconomic programs include those for veterans, small disadvantaged businesses, and other small businesses. To help ensure that small businesses receive a share of federal procurement contract dollars, Congress has set an annual government- wide goal of awarding not less than 23 percent of prime contract dollars to small businesses. To promote this goal, the Small Business Act permits contracting officers at federal agencies to award contracts to small businesses through set-aside or sole source to 8(a), HUBZone, WOSB, and SDVOSB businesses, under certain requirements. Federal agencies are generally required to set aside contracts with values exceeding $150,000 if the contracting officer expects at least two small businesses to submit bids for the procurement. Under the HUBZone, WOSB, and SDVOSB programs, a contracting officer may award sole source contracts valued up to $4 million if the contracting officer does not have a reasonable expectation that two or more small businesses would submit offers and the award can be made at a fair and reasonable price. Under the 8(a) program, federal agencies are to make sole source awards for contracts valued up to $4 million. Federal agencies are also required to reserve contracts with values exceeding $3,000 but less than $150,000 for small businesses exclusively if the contracting officer expects at least two small businesses to submit bids. The Small Business Act also established other programs and resources to assist small businesses nationwide, including with small business contracting activities. Among them, SBA employs Procurement Center Representatives (PCR) to assist small businesses in obtaining federal contracts. Among other activities, PCRs can make recommendations to agency contracting officers that proposed contracts be set aside for eligible small businesses. In addition, the act generally requires federal agencies with procurement authorities to establish an Office of Small and Disadvantaged Business Utilization to oversee the agency’s functions and duties related to the awarding of contracts to small and disadvantaged businesses. Our analysis of federal prime contracting data identified a number of trends in federal contracting obligations to small businesses in Puerto Rico from fiscal years 2006 through 2016. For example, we found that small businesses in Puerto Rico received a relatively high proportion of federal prime contracting obligations for work performed in Puerto Rico compared to small businesses nationwide. Additionally, we found that a greater percentage of obligations was awarded to small businesses in Puerto Rico through full and open competition and the 8(a) program compared to the other three SBA socioeconomic contracting programs. We also found that the number of HUBZone applications has increased since SBA expanded the number of HUBZone-eligible census tracts in June 2016; about half of the applicants were located in newly designated HUBZone-qualified census tracts. The percentage of federal prime contracting obligations awarded to small businesses within Puerto Rico for contracts performed there was relatively high from fiscal years 2006 through 2016, particularly in the last 4 fiscal years. Of the total obligations awarded to businesses of all sizes for contracts performed in Puerto Rico, the percentage awarded to small businesses located there ranged from about 24 percent in fiscal year 2006 to about 51 percent in fiscal year 2015. In fiscal year 2016, small businesses in Puerto Rico received about 47 percent of federal prime contracting obligations (about $319 million out of $682 million) for work performed there. In contrast, federal prime contracting obligations awarded to small businesses nationwide were consistently around 20 percent from fiscal years 2006 through 2013 and increased to about 23 percent from fiscal years 2014 through 2016; in fiscal year 2016, small businesses nationwide received about 23 percent of the federal prime contracting obligations (see fig. 2). For the contracts performed in Puerto Rico by small businesses, most obligations went to businesses also located in Puerto Rico, although some obligations were awarded to businesses located elsewhere, such as on the U.S. mainland. Specifically, we found that of the obligations awarded to all small businesses for contracts performed in Puerto Rico, over 70 percent went to small businesses located in Puerto Rico for 7 of the 11 fiscal years we reviewed; in fiscal year 2016, this figure was 81 percent.