SBA tries again to help women-owned businesses get contracts

Proposed rule is designed to help agencies award 5 percent of federal contracting dollars to women-owned small businesses

The Small Business Administration today proposed a procurement set-aside rule that would give women business-owners more opportunities in federal contracting.

The intent of the rule is provide more opportunities for women-owned small businesses to compete for federal contracts, while helping agencies reach the existing statutory goal of awarding 5 percent of federal contracting dollars to WOSBs, SBA said. According to figures, the government exceeded its 5 percent goal in 2002, but otherwise hasn't reached it. The level has usually hovered around 3 percent since 1999, when SBA first started tracking the numbers.

A set-aside rule would reserve some contracts for the businesses, ensuring that those contracts will count toward the goal no matter which competitor wins. SBA’s proposal finds that women are underrepresented in 83 industries in the federal marketplace, according to the agency. Officials used the analysis in a 2007 study commissioned by SBA from the Kauffman-Rand Foundation to determine where women are underrepresented.

“Women-owned small businesses are one of the fastest growing segments of our economy, yet they continue to be underrepresented when it comes to federal contracting,” said SBA Administrator Karen Mills.

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Proposed rule

For SBA’s new rule, Mills used the same study as the previous SBA administrator Steve Preston to determne which industries had a disproportionately small number of women-owned small businesses as contractors. However, Mills took a different approach to finding the underrepresentation.

Using the Rand study, SBA said it found eligible industries based on the combination of both the share of contracting dollars going into an industry, as well as the share of number of contracts awarded in the same industry. Preston based the analysis solely on the share of contracting dollars. He determined women were under-represented in only four industries, including kitchen cabinet-making.

Preston told the House Small Business Committee in 2008 he chose the analysis of contracting dollars because the government’s most common measurement is in dollars, from appropriations to the 5 percent contracting goal.

“Contract actions do not allow for an accurate accounting of the financial benefits of business development that occur when small businesses receive federal contracts,” he told the committee.

Senators are supportive of the new rule.

"The proposed changes to the women-owned small business contracting rule is a step in the right direction for small businesses looking to compete for and win federal contracts - especially those women-owned small businesses," said Sen. Mary Landrieu (D-La.), chairwoman of the Small Business and Entrepreneurship Committee.

In the past though, this issue of set-asides for women has stirred up a lot of frustration. Preston's proposed rule in 2007 infuriated many members of Congress. Senators called it a slap in the face to women and wrote letters to voice their opposition. Senators also added an amendment to an appropriations bill to kill the proposed regulatory rule all together.

Many lawmakers and experts also opposed a provision in Preston's rule that required agencies to certify that they had discriminated against women-owned small businesses in order to apply for the program.

The lack of action has frustrated many people too. Congress authorized such set-asides for women business-owners in 2000, but little happened beyond a series of studies.

"After three congressional reports, numerous congressional hearings, two proposed rules, one highly deficient final rule and nearly a decade of delay, today’s announcement is long overdue,” said Sen. Olympia Snowe (R-Maine), ranking member of the Small Business and Entrepreneurship Committee.

As for the latest step, SBA is accepting comments on the rule until May 3.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.


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