HHS dismantles small business office in massive restructuring

HHS has effectively dismantled its Office of Small and Disadvantaged Business Utilization (OSDBU), laying off the entire staff except for its executive director amid a sweeping agency overhaul. The move leaves just one person—Executive Director Shannon Jackson—to uphold statutory small business responsibilities at an agency that awarded $39.1 billion in contracts last fiscal year, with 22.8 percent going to small businesses. The news was first reported by Government Executive.

The cutbacks are part of a broader 10,000-person reduction in HHS’s workforce, shrinking its headcount from 82,000 to 62,000. DOGE has driven the consolidation of HHS from 28 divisions to 15, with regional offices reduced by half.

Although HHS insists the OSDBU office still exists in compliance with statutory requirements, small business advocates say the loss of staff—estimated at more than 25 people across CMS, NIH, FDA, and CDC—hampers the department’s ability to evaluate acquisition strategies, justify small business exclusions, and prevent contract bundling.

“There is no way one person can meet every requirement laid out in the Small Business Act,” said Guy Timberlake, CEO of the American Small Business Coalition. “No one is minding the store now.”

Congressional action would be needed to formally eliminate small business requirements, but without a full OSDBU staff, experts say HHS will struggle.