The State of Black American–Owned Businesses in FY25

February is Black History Month – a time to recognize and celebrate African American life, history, and culture. Founded in 1926 as “Negro History Week” by Dr. Carter G. Woodson, the month of February was selected because it encompasses the birthdays of Abraham Lincoln and Frederic Douglass, two men closely associated with the pursuit of freedom and equality. 

A survey by the US Census Bureau and the Annual Business Survey revealed that in FY23, Black or African American-owned firms accounted for 3.4% (201,000) of US employer businesses, generating $249.0 billion in receipts out of more than 5.9 million US employer firms. (Employer firms are those that have paid employees.) With federal contract obligations reaching $834B in FY25, let’s look at the state of Black American-Owned companies within the federal arena. 

In FY25, $10.23B was awarded to 6,291 Black American-Owned Businesses. This amount is 1.23% of the total federal contracts obligated in FY25. Year over year, though the value of federal contracts has increased, the percentage awarded to Black American-Owned Businesses has fallen from 1.53% in FY22 to 1.23% in FY25.

In terms of awards in FY25, 13% ($1.33B) of the total contracts were awarded as other than small business (OTSB) to 637 companies, with World Wide Technology LLC winning more than $400M in contracts as OTSB awards!

It is also important to note that:

• $2.35B was awarded on GSA Schedules and IDIQ/Vehicles
• $73.11M was awarded on the SBIR/STTR programs

In addition to World Wide Technology Inc., several other firms rank among the top ten companies that exceeded $100 million in federal contract awards in FY25, including Advantaged Solutions Inc., Medical Place Inc., Enterprise Resource Planning International, P E Systems, AOC Connect, and Lazarus Energy Holdings.

It is no surprise that Maryland, Virginia, and Washington, DC lead as the primary headquarter locations for these firms, collectively accounting for approximately $5 billion in FY25 awards. Georgia, Texas, Alabama, and Florida also rank among the top states where these companies are based.

Defense agencies account for 52% of total contracts awarded to Black American-Owned Businesses, accounting for $5.3B in FY25, with the Department of the Army awarding $1.47B. In addition to the defense agencies, we also see the Department of Veterans Affairs, Health and Human Services, Department of Homeland Security, General Services Administration, and the Department of Transportation make up the top 10 agencies working with Black-American Owned Businesses.

In FY25, the Department of the Air Force saw an increase in obligations to Black American–Owned Businesses by $76.4 million. Additional year-over-year gains were recorded at the Department of the Navy, the broader Department of Defense, the Defense Logistics Agency (DLA), the Department of Veterans Affairs, and the Department of Transportation.

Though FY25 was the year in which we saw federal contracts cross $834B, we also saw decreases across many agencies. This is also reflected in the year-over-year decline in contract awards to Black American-Owned Businesses. The Department of Health and Human Services saw a decrease of $209M, while the Department of Agriculture saw a decrease of $196M.

In terms of top NAICS codes for which these businesses won awards, we see a mix of computer-related NAICS Codes, construction & facilities-related NAICS codes, and professional services codes, with 541519 leading with more than $807M in awards.

In terms of PSC codes, we see a mix of Support Professional Services codes, IT & Telecom, Guard Services, Custodial Janitorial Services, and Maintenance of Office Buildings in the top 10 PSC codes.

While there is no specific set-aside program designed for Black American-Owned Businesses, more than $4.09B was awarded using the various programs available. The Small Business Set-Aside accounted for $1.61B in awards, followed by the use of the 8(a) programs, which account for $1.6B in set-asides. The use of SDVOSB programs accounted for $0.7B. The use of the HUBZone and WOSB programs is limited among this socio-economic category.

By contrast, utilization of the HUBZone and Women-Owned Small Business (WOSB) programs remains comparatively limited within this socio-economic segment, indicating potential areas for strategic expansion and certification alignment.

The data tells a clear story. Federal spending continues to grow—reaching $834B in FY25—yet the share awarded to Black American-Owned Businesses has declined to 1.23%. In absolute dollars, the numbers remain meaningful, though proportionally they show a decline. Although Black-American-Owned companies are winning awards in high-value sectors such as IT, using schedules, and working with an impressive mix of defense and civilian/independent agencies, there is a clear stagnation. For these companies to grow their share of the market, they need to strategically position themselves. In addition to data analysis, they need to follow strategies of teaming, subcontracting, ensuring the use of strategic vehicles and schedules to ensure that they grow proportionally, if not more, with the market.