Set-Asides on Women’s Contracts Criticized

Kendra Marr, Washington Post, January 7, 2008

Women’s business groups across the country are decrying a Small Business Administration plan they say threatens to limit their eligibility for government contracts set aside for disadvantaged companies.

In proposed rules issued two weeks ago, the federal agency identified just four industries in which it said women-owned small businesses are underrepresented and thereby eligible for set-asides: intelligence; engraving and metalworking; furniture and kitchen cabinet manufacturing; and a limited category of motor vehicle dealers.

Federal agencies could decide that women-owned businesses are underrepresented in other industries, but first they would have to find sufficient evidence of discrimination by the government before setting aside contracts. The SBA further limited the size of any contract to $5 million for manufacturing work and $3 million for other jobs.

The proposal prompted many small-business owners to protest, and some are mobilizing to press their concerns during a 60-day public comment period before the rules are final.

Women business owners said they feel underrepresented in a number of industries. So it’s particularly infuriating that the SBA chose categories that may not have many members.

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SBA spokesman Sean Rushton said the rules are intended to help, not hinder, a procurement process in which women-owned small businesses already are earning an increasing percentage of federal contract dollars. In 2006, these contracts totaled $11.6 billion, an increase from $1.4 billion in 2005.

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Women-run companies represent about 30 percent of all privately held firms nationally, but in 2006, the latest year for which data is available, they made up just 3.4 percent of government contracts, according to various surveys.

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According to a Women Impacting Public Policy study, 78 percent of women-owned business do not enter the contracting arena because of cost, complexity and the perceived impossibility of obtaining a contract.

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