Women-owned small businesses (WOSBs) in Richmond and throughout the Commonwealth of Virginia not only face discrimination in contracting at the state level (see, Not Getting Our Share: The State Disparity Study and Next Steps, richmondWOMAN, Volume 1, Issue 3, pages12-13), they continue to struggle to receive their fair share of business from the federal government as well.

The US Small Business Administration (SBA) reported recently that contract awards to women business owners were up 22% in FY 2003 - a jump of $1.5 billion from $6.8 billion to $8.3 billion.   That sounds pretty good until you realize that the $8.3 billion in awards to WOSBs during FY 2003 continues to represent only 2.98% of the total federal spend.

The continued failure of women business owners to obtain their fair share of federal contracts is particularly discouraging given that the federal government first began taking steps in 1988 toward full recognition and effective elimination of discrimination against women-owned businesses in federal procurement.  During that year, Congress passed the Women’s Business Ownership Act, HR 5050, which brought gender equity to business banking. It promised to develop awareness of the problems faced by women business owners in the marketplace by establishing the National Women’s Business Council.  It required the collection and dissemination of Census data on women owned businesses, and it appropriated money to the SBA for business assistance for women-owned businesses. Unfortunately, neither increased awareness of the issues faced by women business owners nor advocacy on their behalf by the Women’s Business Council brought fairness to the procurement process.

In 1994, recognizing that little progress had been made in assuring equal opportunity for WOSBs in federal procurement, Congress passed the Federal Acquisition and Streamlining Act (PL 103-355; FASA) that set a goal of 5 percent of federal contract dollars to be awarded to women owned small businesses.

Six years later, acknowledging that the federal government was far from achieving the 5% contracting goal, Congress authorized a "restricted competition" or set aside program specifically for women-owned businesses, the Women-Owned Small Business Federal Contract Assistance Program, codified in the Small Business Act, 15 U.S.C. S 637(m).

The WOSB set aside program authorized in 2000 was intended as a tool to help federal agencies meet the 5% contracting goal established in 1994.  As written, the set aside program would allow (for the first time) federal agencies to "restrict competition" to WOSBs in certain circumstances. Unfortunately, more than four years after Congress authorized the new set aside program, it has yet to be implemented.

The SBA has failed to complete two tasks required by the law that authorized the set aside program.  It has failed to complete a study of the disparity between availability and utilization of women-owned businesses in federal contracting in order to identify industries where WOSBs were underrepresented (like the one recently completed by the state) and it has not issued regulations implementing the program. 

The SBA has acknowledged that drafts of the study and the regulations were completed in 2001. The SBA decided, however, not to formally issue the study or the regulations because of unspecified concerns about the study methodology.  Now, almost four years later, the SBA continues to await the results of a study by the National Academy of Sciences on the methodology to be used to complete the study with no timetable or funds for completing the study once the methodology is ready.

Why is this important?  It is important because the federal government’s failure to complete the study, to implement the set aside program, and to achieve the 5% contracting goal is costing women business owners almost $5 billion annually in lost contract dollars and economic opportunity.

The SBA’s delay and lack of commitment in implementing the WOSB set aside program is in stark contrast to the efficiency and energy brought by the SBA to the implementation of the new program for Service Disabled Veteran Owned Small Business Concerns (SDVOs). Less than six months elapsed between passage of the Veterans Benefit Act in December 2003 and publication of the SBA’s interim final rule implementing the program on May 5, 2004. The SDVO program includes authorization for set-asides and sole-source procurements and requires SDVOs to meet eligibility requirements. Like the WOSB set aside program, the purpose of the SDVO program is to help federal agencies meet a statutorily mandated 3% government-wide goal for procurement from SDVOs.

On October 29, 2004, the US Women’s Chamber of Commerce filed suit in federal court seeking an order requiring the SBA to issue the disparity study and regulations implementing the WSOB set-aside program within 3 months.   In its complaint, the Women’s Chamber alleges that SBA Administrator Hector V. Barreto told its representatives that “the Administration has no intention of implementing this [WSOB set-aside] program.”  (Download the complaint at http://www.sblink.us/html/uswcc-sba-claim.aspx]

Women business owners should not have to wait any longer for real equity in federal contracting.  The SBA’s action on behalf of veteran-owned businesses shows what can be done when leaders want to get something accomplished.  Write the SBA Administrator, the White House and the Virginia Congressional delegation and tell them that you don’t think it should take a federal lawsuit or a court order to get the SBA to do its job.   Women deserve better.

Contacting the leaders responsible for implementing the Women Owned Small Business Program:

You can write the SBA Administrator at: