Women business owners fight SBA program delays

Women-owned business coalitions continue to protest delays in a Small Business Administration set-aside program while expressing skepticism that it ever will be implemented.

The program, created by the 2000 Small Business Reauthorization Act, allows agencies to restrict certain contracts to women-owned small businesses certified as disadvantaged. SBA has not implemented the program because it has not yet identified industries in which women are underrepresented, which the act requires.

An SBA-commissioned study released last month reported that the agency had not developed a satisfactory method of identifying these industries, creating further delays and renewing the frustration of women-owned business groups.

"We've been waiting four years for implementation. It's time to move," said Terry Neese, president and co-founder of Women Impacting Public Policy, based in Oklahoma City.

Neese, whose organization represents more than 500,000 women, said the program is needed because women-owned businesses have had a difficult time breaking into federal contracting. According to a recent survey of her organization's members, only 20 percent are federal contractors. She attributes this to the fact that many women-owned firms are relatively young and unfamiliar with how the federal marketplace works.

While the Center for Women's Business Research estimates that 48 percent of private companies are owned by women, only 2.5 percent of federal contracts are awarded to women-owned small businesses, according to the SBA. In 1994, Congress set a governmentwide goal of awarding 5 percent of government contracts to women-owned enterprises.

In 2001, the Government Accountability Office reported that the government fell short of its goal, and that the percentage of prime contracts awarded to women-owned small business had not grown between 1996 and 1999. It noted, however, that between 1979 and 1999, that percentage rose from 0.2 percent to 2.5 percent.

SBA's fiscal 2006 budget emphasizes other programs designed to help women, such as Women's Business Centers, which reach out to firms through SBA's regional offices, and the Business Matchmaking program, which connects small businesses with large ones. The budget proposal says that as a result of that program, 29 small, mostly women-owned businesses were awarded almost $20 million in contracts.

Women's business groups tend to dismiss these programs as largely unhelpful. Margot Dorfman, chief executive of the Washington-based U.S. Women's Chamber of Commerce, a nonprofit with 150,000 members, emphasized the need for a set-aside program for women-owned businesses just as there is for minority groups that are considered disadvantaged. "Without this law being implemented, we have no way of meeting this [5 percent] goal," she said.

The Women's Chamber of Commerce filed a lawsuit against SBA over the delay last October, which is pending. Dorfman estimates that women-owned businesses are losing more than $5 billion each year as a result of the government's failure to meet its 5 percent goal.

"That's earmarked. They made the commitment, so should not be giving that money to anybody else," she said.

Mike Stamler, an SBA spokesman, spoke dismissively of the lawsuit. "Their complaints are unwarranted," he said, adding that the agency cannot implement the set-aside program until it has a way of identifying industries in which women are underrepresented. "There is no sense in proposing something that would not stand up to the rule of law," he said.

Women Impacting Public Policy and the Women's Chamber of Commerce disagree on the best way to deal with the delay.

Women Impacting Public Policy's Neese said she does not think a lawsuit is the best approach, partly because it could linger in court for years.

"What we have to do as women business owners is unite with one voice, and tear down the barriers and walls in federal government contracting, and let the world know that we are just as capable of obtaining these contracts and … doing this work just as effectively as anyone else," she said.