Press Releases
More Government Work for Women-Owned Businesses?
American Express OPEN
Women-owned small businesses represent one of the fastest-growing segments of the U.S. economy, but are less than 4 percent of the companies that receive government contracts.1 In an effort to boost that figure, the Small Business Administration (SBA) has proposed a new set of rules and guidelines whose net effect is intended to expand federal contracting opportunities for women-owned businesses.
“Women-owned small businesses have historically been underserved and underrepresented in the federal market,” says Jonathan Swain, the SBA’s Assistant Administrator for Communications. “We’ve made a commitment through the SBA to develop a comprehensive rule that would improve this situation.”
The SBA is seeking public comment on the proposed rule through May 3. In particular, says Swain, the agency welcomes comments on the certification process it has proposed, as well as other technical and regulatory aspects of the rule, which are posted at www.regulations.gov.
The agency’s push to expand opportunities for women-owned businesses comes at least partly from previous failures. In 1994, Congress set a goal of awarding at least 5 percent of all contracting dollars to women-owned businesses.2 But that goal has rarely, if ever, been reached. For example, in fiscal year 2008 women received just 3.4 percent of federal contract dollars.3 Women Impacting Public Policy and American Express OPEN established Give Me 5: Education and Access for Women in Federal Contracts to help close the gap.
In 2007, a rule was drafted that set aside certain federal contracts for women-owned businesses in underrepresented industries. Critics contend that the rule was ineffective. Using data from the Kauffman-RAND Foundation, then-SBA Administrator Steve Preston found that women were underrepresented in just four industries.
What’s more, an agency that wanted to participate in the program would have been required to certify that it had previously engaged in discrimination against women-owned small businesses. At the time, Senator John Kerry (D-Massachusetts), chairman of the U.S. Senate Committee on Small Business and Entrepreneurship, called the proposal “a slap in the face to women business owners.”
Current SBA Administrator Karen Mills takes a different approach. Preston had analyzed the Kauffman-RAND data by looking at women’s share of contracting dollars by industry. Mills used the same data, but added another set of criteria: women’s share of the number of contracts issued per industry. Now, SBA analysis finds that women-owned businesses are underrepresented in fully 83 industries. Mills also rescinded the requirement that participating agencies admit previous discrimination.
Reaction to the proposed rule has been largely positive. “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 Senator Olympia Snowe (R-Maine), Ranking Member of the Senate Committee on Small Business and Entrepreneurship, in a prepared statement. “Implementation of a meaningful women’s contracting program will help federal agencies meet their contracting goals, and will afford women-owned small businesses a critical tool to increase access to federal contracts that will allow their companies to grow and thrive.”
Following the public comment period, the SBA will review and respond to the feedback it has received, submit revisions for review by other federal agencies, and promulgate a final rule.
To submit your comments, visit www.regulations.gov and search for SBA.
1 “Snowe Comments on Proposed Rule to Implement Long-Awaited Women’s Contracting Program” (press release), Office of Sen. Olympia Snowe, 3/2/10.
2 National Association of Women Business Owners, http://www.nawbo.org/content_10238.cfm
3 “Snowe Comments on Proposed Rule to Implement Long-Awaited Women’s Contracting Program” (press release), Office of Sen. Olympia Snowe, 3/2/10.
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