Policy shift could impact Huntsville’s economy, home to thousands of NASA contractors
SPEAKIN’ OUT NEWS
(HUNTSVILLE, AL — NASA has ended its efforts to direct more contracting dollars toward small businesses owned by individuals from historically marginalized groups, following an executive order signed by President Donald Trump on his first day back in office.
The decision comes as the space agency’s inspector general confirmed that an ongoing audit of its small business contracting practices has been discontinued. NASA, which operated on a nearly $25 billion budget in 2024, spends about 90% of its funding on contracts. The agency’s economic impact is significant, generating $75.6 billion nationwide and supporting nearly 305,000 jobs, including 7,000 at Marshall Space Flight Center in north Alabama.
The policy shift stems from Trump’s sweeping rollback of executive orders issued by President Joe Biden, including one from February 2023 that sought to increase the percentage of federal contracting dollars awarded to socially and economically disadvantaged small businesses. Biden’s initiative aimed for a 15% procurement goal by Fiscal Year 2025—three times the 5% minimum set by federal statute. Trump’s order effectively cancels that expansion, reverting the target to 5%.
NASA had been reviewing its compliance with the 5% statutory requirement but is now abandoning that effort. According to a memo from the agency’s inspector general released Thursday, NASA had already exceeded that threshold in each of the past five years.
Despite the audit’s termination, initial findings suggested broader issues regarding the agency’s procurement processes and the accuracy of small business award data. The inspector general’s memo noted that NASA had identified discrepancies in government records related to small business awards, which have since been communicated to procurement officials.
With NASA contracts playing a key role in Huntsville’s economic growth, the policy reversal could have lasting effects on small businesses in the area, many of which rely on federal contracts to sustain operations.
