Administration takes first crack at controversial women’s procurement program

The Obama administration has stepped in to address a controversial women's procurement program that was mired in rule-making and lawsuits during much of the Bush era.

The Small Business Administration on Tuesday released a proposed rule identifying 83 industries in which women-owned small businesses are underrepresented, a substantial departure from a 2008 proposal that identified only four such industries.

An SBA statement said the proposed rule was "aimed at expanding federal contracting opportunities for women-owned small businesses" and was part of the Obama administration's overall commitment to expanding opportunities for small enterprises -- particularly those owned by women, minorities and veterans -- in the federal marketplace.

"Women-owned small businesses are one of the fastest-growing segments of our economy, yet they continue to be underrepresented when it comes to federal contracting," SBA Administrator Karen Mills said. "This proposed rule is a step forward in helping ensure greater access for women-owned small businesses in the federal marketplace."

Congress in 2000 authorized a rule to increase federal contracting opportunities for women-owned small firms and help agencies meet the statutory goal of awarding 5 percent of contracting dollars to women-owned small businesses. The rule, however, has been repeatedly delayed, rewritten and scrapped.

The 2008 rule set off a firestorm of complaints from lawmakers and women's advocates, who accused SBA of choosing the narrowest methodology for determining underrepresentation. The number of industries in which women are underrepresented was determined through a RAND Corp. study, which offered several possible methodologies that showed women were underrepresented in anywhere from 87 percent of industries to none at all.

According to SBA, the Obama administration decided last year to scrap existing proposals and draft a new, comprehensive rule "based on the analysis of the prior studies and on all the questions and comments previously received."

The proposed rule authorizes set-aside contracts under a certain dollar amount for women-owned small businesses in the industries in which they are underrepresented. The eligible industries were identified based on a combination of both the share of contracting dollars awarded to women-owned firms and the share of contracts awarded. This is a departure from the previous rule, which identified industries in which women-owned small businesses were underrepresented based solely on the share of contracting dollars.

Additionally, the new rule does not require every federal agency to certify that it had engaged in discrimination against women-owned small firms for the procurement program to apply in that agency.

The proposed rule is open for comment until May 3.