The Washington Post
Monday 07 January 2008
Business owners say SBA's scope is limited.
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.
"Cabinet-making? It's ridiculous," said Jennifer Bisceglie, president of Interos Solutions an information technology consulting firm in McLean.
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.
The latest proposal "will only accelerate this process," Rushton said in an e-mail.
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.
The battle to boost that percentage has been progressing for several years.
In 1994, Congress set a goal of awarding at least 5 percent of all federal small-business contracts to women-run companies, and six years later lawmakers directed the SBA to create a program to fulfill that goal.
In 2004, the U.S. Women's Chamber of Commerce sued the SBA for its failure to study underrepresented industries and publish the regulations necessary to implement the set-aside program. The D.C. Circuit Court ruled that the federal government was unreasonably delaying enactment.
The SBA said that it did attempt a timely implementation. However, the agency says such an undertaking was a "complex and controversial responsibility" because gender-based preference programs are subject to intense constitutional scrutiny. In 2001, the agency completed an initial study, which generated questions in the review process, spurring the National Academy of Sciences to perform an independent review.
Afterward, the SBA contracted with Rand Corp. to perform another analysis. Rand measured underrepresentation in dollar value and the number of contracts awarded to women-owned small businesses, which resulted in identifying the four underrepresented industries.
Margot Dorfman, chief executive of the chamber, said that after fighting for more than a decade, she's feels like she is being sabotaged.
"It just amazes me that the SBA is continuing to block women-owned firms from accessing government contracts," she said.
The House and Senate small-business committees plan to hold oversight hearings this month on the proposal.
"It is insulting," Sen. John F. Kerry (D-Mass.), chairman of the Senate small-business committee. "It is not a legitimate effort to enforce congressional intent or the needs of women."
Norma Byron, president of the Alexandria-based Ashlawn Group, the country's only woman-owned munitions designer, said she can't believe the proposal doesn't consider her company a minority. Byron said she faces gender bias, despite her extensive background in firearms and ammunition.
"People think that because my business is woman-owned, my husband really owns it and I'm just a figurehead," Byron said. "My husband is a photographer, and I've been in munitions business for 30 years."
It can be difficult at times to challenge the status quo in pursuing work, said Indy Freeman, president of TeknoLogix, a McLean-based firm that helps companies pursue federal contracts.
"You have to come up against the big boys, who have that old boys network and old boys mentality," Freeman said.
The government's recent preference for hiring one large company to manage several smaller projects also makes the idea of capping individual projects at $3 million unfeasible, said Faye Coleman, president of Westover Consultants in Bethesda.
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.
"We've been waiting a really long time, and frankly we deserve better," Byron said.
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