Women contractors not getting their share of agencies’ dollars

A mere 2.2 percent of federal contracting dollars go to women-owned businesses, despite a governmentwide mandate setting a 5 percent target, according to a new analysis of federal procurement data. Under the 1994 Federal Acquisition Streamlining Act, agencies are required to award 5 percent of the total value of both prime contracts and subcontracts to women-owned businesses. Of 23 federal agencies that awarded more than $100 million each in prime contracts in fiscal 2000, only six met the goal, according to data from Eagle Eye Publishing, a Fairfax, Va.-based company that tracks federal procurement trends. Eagle Eye analysts examined agency information reported to the Federal Procurement Data Center at the General Services Administration to reach their conclusions. The agencies that met the women-owned contracting goal accounted for only 8 percent of the $4.5 billion awarded to such businesses. The Small Business Administration reports that only four agencies-the departments of Housing and Urban Development, Treasury, and Commerce and the Agency for International Development-are in compliance with the mandate for both prime contracts and subcontracts. The Defense Department, which accounts for 64 percent of all federal prime contracts, awarded 2 percent of its contracts to women-owned businesses. Even if all the other agencies hit the mark, the governmentwide mandate can't be met without Defense meeting the target. Since the requirement took effect in 1996, contracting with women-owned businesses has grown more than four times faster than contracting with all private businesses, the General Accounting Office reported last February. Between 1996 and 1999, contracting increased by 7.5 percent, while prime contracts with women-owned firms grew by 31 percent. However, the share of federal contracts awarded to women-owned businesses remains tiny, increasing from 0.2 percent in 1979 to 2.2 percent last year. "Agencies are having trouble because there is no procurement tool available to focus on women-owned businesses," said Sheryl Swed, assistant administrator at SBA's Office of Federal Contract Assistance for Women Business Owners. That should all change soon. Swed's office is drafting a set-aside program designed to help procurement officers identify women-owned businesses. It will be similar to the 8(a) program for minority-owned businesses. Agency officials hope to have a rule out for comment by the end of August. The rule, mandated as part of last year's SBA reauthorization, applies only to prime contracts totaling $3 million for services and $5 million for manufacturing. GAO found that agencies have an easier time meeting the goal for subcontracts. Between 1996 and 1999, half of federal agencies met their subcontracting goal, compared to one-third for prime contracts. No agency consistently met its goal for prime contracts and subcontracts during the period. SBA encourages women-owned businesses entering the federal market to try their hand at subcontracting first. "Once you get a prime contract, you really have to produce," she said. "You can't fail." Another problem is prime contractors who fail to subcontract to women-owned businesses, said Julie Weeks, director of research for the National Foundation for Women Business Owners. "If they were held accountable, that would open the door." The SBA rule will likely address the issue by requiring procurement officials to take a much harder look at a contractor's history of working with women-owned firms. Swed says most agencies, including Defense, have used aggressive outreach programs to educate women-owned businesses about contracting opportunities.