What's Up on the Hill?

Spring 2005 Issue

The Women’s Federal Contracting Program — It’s Time for Less Study and More Action

By Barbara Kasoff

It seems as if endless reports are published by government agencies and, truth be told, very few of them get much public attention. However, the report by the National Academy of Sciences, titled “Analyzing Information on Women-Owned Small Businesses in Federal Contracting,” published March 10, 2005, caught the attention of women business owners.

This report took two years to complete at the cost of $200,000, and it marks a milestone in the long-overdue implementation of the women’s procurement program that was passed into law in the year 2000. Maybe “milestone” is not the proper word. We usually associate that word with forward progress. In reality, this report was instrumental in turning the clock backward for women-owned small businesses that are federal contractors.

This issue is one of sensitivity for me in my role with Women Impacting Public Policy (WIPP), a public policy organization that represents 505,000 women in business nationwide. Let me just briefly recap the history of this program and why, four years later, we are no further along than we were when it started.

History of the Women’s Equity in Federal Contracting Law

A woman-owned small business is defined in federal regulations as “one that is at least 51 percent owned by one or more women and whose management and daily business operations are controlled by one or more of such women.”

Currently, there is no federal certification for a woman-owned company. Two organizations, both of which are part of the WIPP umbrella — the Women’s Business Enterprise National Council and the National Women Business Owners Corporation — officially certify a woman-owned-business. These certifiers look at each firm’s business operations from many perspectives, and the certification process often include a site visit. The closest thing to a federal certification is one provided by the Department of Transportation. A woman-owned company also can qualify as a socially and economically disadvantaged business for government procurement purposes.

In 2000, Congress passed Public Law 106-554, Section 811(m) establishing a program which permits federal contracting officers to restrict competition for certain types of federal contracts to women owned small businesses. Part of that law required that SBA conduct a study to identify industries in which women-owned small businesses are underrepresented in federal contracting. This program is commonly referred to as the “women’s procurement program.”

The reason the women’s procurement program was established by Congress was to give government agencies a tool to meet their goal of awarding 5 percent of all government prime contracts to women-owned small companies.

Congress established the 5 percent goal for women-owned small businesses in the Federal Acquisition Streamlining Act of 1994. Congress also established an overall goal of awarding 23 percent of federal contracts to small businesses, beginning in Fiscal Year 2003. The 5 percent women-owned goal is not in addition to the 23 percent small business goal; rather, it is a part of the total 23 percent goal.

The most current data show that government agencies contracted only 3.0 percent to women-owned small businesses. That missing 2 percent represents billions of dollars in revenue lost to women-owned small businesses.

In 2002, the Small Business Administration’s (SBA) Office of Federal Contract Assistance for Women Business Owners (CAWBO) completed the study required to establish the women’s procurement program. Administration officials declared it insufficient and asked the National Academy of Sciences to take a look at the CAWBO study and its methodology.

WIPP’s Reaction to the Study of the Study

Not surprisingly, the National Academy of Sciences found the CAWBO study to be flawed. Also, not surprisingly, now that the “study to study the study” requires further study, delay of implementation of the women’s procurement program is imminent. I’m afraid the phrase “study it to death” comes to mind.

The Academy study makes recommendations on how to fix the methodology. But, one key recommendation of the Academy report suggests that the SBA should study women-owned businesses even longer and in-depth. The report also suggests that research on subcontracting also should be done — yes, calling for yet another study.

With all due respect, four years of “studying” has produced nothing but delay of a program that is costing women-owned small businesses billions of dollars in contracts.

Women business owners are looking for action — not another study. The simple fact women-owned businesses receive only 3 percent of contracts awarded is enough substantiation. Bottom line: We are looking for fairness in government contracting and access to the federal market.

This can only happen with the help of our elected officials in Washington , DC . Unless they tell the federal government to stop studying and start awarding contracts to women-owned businesses, this important program will never be implemented. There is just too much at stake to let that happen.

WIPP members urge you to talk with your federal elected officials and ask them to support the law already on the books.

Start with the members of Congress who sit on the House and Senate Small Business Committees. To find that list, go to www.house.gov and www.senate.gov; on each site, click on the committee, and you will find a list of its members. Sending an e-mail only takes a few minutes of your time, but it will make a huge difference!

Barbara Kasoff is COO and co-founder of Women Impacting Public Policy ( www.wipp.org ), a national, bi-partisan public policy organization that advocates for, and on behalf of, women and minorities in business, strengthening their sphere of influence in the legislative process, creating economic opportunities, and building bridges and alliances to other small business organizations. She can be contacted at 888-488-WIPP (e-mail: bkasoff@wipp.org).