Women Entrepreneurs on the Rise
SBA Support for Female Business Owners
Increasingly, women entrepreneurs are entering the world of business ownership in a wide range of industries. Their success is reflected in women-owned small businesses accounting for more than 30 percent of non-farm businesses (U.S. Census Bureau, 2006). Yet, their gross receipts account for only a fraction of the U.S. economy; and only a small percentage have successfully entered the federal procurement market. SBA Administrator Karen Mills states, “Women-owned small businesses are one of the fastest growing segments of our economy, yet they continue to be under-represented when it comes to federal contracting.”
According to the U.S. Small Business Administration (SBA), eligibility of a women-owned small business (WOSB) is 51% owned and controlled by one or more women and primarily managed by one or more women. The women must be U.S. citizens. The business must be considered “small” in its primary industry according to the SBA’s size standards for that industry.
Helping to Close the Gap
The SBA promotes the nationwide growth and sustainability of WOSB’s through its Office of Women’s Business Ownership (OWBO). The Office oversees a national network of over 100 Women’s Business Centers (WBCs) including three in the State of Florida. The national network of WBCs offers technical assistance to women entrepreneurs and women-owned small businesses. In 2009, the WBC’s reported serving over 150,000 clients.
The OWBO states in its mission, “through the management and technical assistance provided by the WBC’s, entrepreneurs, especially women who are economically or socially disadvantaged, are offered comprehensive training and counseling on a vast array of topics in many languages to help them start and grow their own businesses.” As part of this mission, the OWBO is promoting government contracting as a viable market opportunity for growing and sustaining women-owned small businesses. (Check out the training course, “Winning Federal Contracts – A Guide for Women Entrepreneurs” at http://training.sba.gov:8000/womencontracts). Many WBC’s and their community partners have expanded service offerings to include government contracting.
National support is growing from organizations, such as Women Impacting Public Policy (WIPP) and the U.S. Women’s Chamber of Commerce, for an increase in women-owned small businesses in the federal procurement marketplace. These and other organizations are drawing attention to the low percentage of women-owned small businesses being awarded government contracts. Though there is federal legislation, many supporters would argue that more should be done to level the playing field for women-owned small businesses.
Moving Towards Equity
Existing legislation includes the Federal Acquisition Streamlining Act (FASA) of 1994 and the Equity in Contracting for Women Act of 2000. FASA set a statutory goal of 5% of actual expenditures for federal prime contracts and subcontracts to be awarded to WOSB’s. Unlike other small business set-asides (e.g., HUBZone), there is no mechanism or certification process for achieving this goal.
The Equity in Contracting for Women Act of 2000 established a Women’s Procurement Program, which allowed federal agencies the ability to limit certain competitions to WOSB’s. Per the Act, the SBA is to identify industries in which WOSBs are underrepresented. (This has yet to be accomplished.) The SBA is also mandated to establish procedures for participation in the procurement program.
A historical trend shows a consistent underrepresentation of WOSB’s in the federal procurement marketplace. In 1998, WOSB’s received only 2.2 percent of the value of the total federal prime contracts awarded. In 2002, WOSB’s received 2.9 percent; and in 2008, they received 3.4 percent. The 5 percent set-aside goal for WOSB’s, as specified in FASA, has never been met with lost revenues estimated to be in the billions.
In response, the SBA has put forth a proposed rule entitled, Women-Owned Small Business Federal Contract Program (Federal Register, 75(42), 2010). The proposed rule would provide a mechanism for contract officers to increase contracting opportunities for WOSB’s. As stated, “This Proposed Rule would implement procedures authorized by the Small Business Act (Pub. L. 85–536, as amended) to help ensure a level playing field on which Women-Owned Small Businesses (WOSB’s) can compete for Federal contracting opportunities.” Currently, the proposed rule is in review by the SBA counsel.
The government contracting marketplace offers significant opportunities for women entrepreneurs to grow and sustain their small businesses. The potential benefits to our communities are significant in terms of job creation, economic growth, and increased purchasing power.
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