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Feds Award Women's Businesses 2.5% of Contracts

Tuesday, July 29, 2003

Women-owned businesses only receive about 2.5 percent of federal contracts. A new series of reforms up for Senate approval may help women business owners gain better access to government dollars.

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Women-owned businesses only receive about 2.5 percent of federal contracts. A new series of reforms up for Senate approval may help women business owners gain better access to government dollars.
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Olympia Snowe

(WOMENSENEWS)--The U.S. government is falling far short of its goal of awarding 5 percent of federal contracts to women-owned businesses and has been using inaccurate and outdated information that keeps many contracts beyond the reach of small businesses, officials and advocates say.

"Women have had no level playing field in federal contracts," says Terry Neese, an Oklahoma City entrepreneur who is president of the 430,000-member business group Women Impacting Public Policy. "The government used to say that there weren't enough women entrepreneurs, but that's not true anymore--there are tons of women business owners trying to get into the system."

Women business owners account for about 2.5 percent of federal contracts, according to figures from the Small Business Administration, a federal agency that assists small business development.

The poor showing for women entrepreneurs has prompted U.S. Sen. Olympia Snowe, a Republican from Maine, to propose a number of reforms in legislation expected to come up for Senate approval before Labor Day. Snowe, the new chair of the Senate Committee on Small Business, has passed legislation through committee that would make permanent the women's business centers, open now as trial runs, and streamline women business owners' access to the federal procurement system.

"The glass ceiling in corporate America that led many women to start a small business has been transformed into another obstacle--a glass doorway--between women who want to start and grow businesses and the lending and federal contracting markets they seek to enter," Snowe says.

More than 10 million privately held businesses in the United States are at least 50-percent women-owned. These businesses generate more than $2.3 trillion in sales and employ 18 million people, according to the Center for Women's Business Research, a nonprofit group based in Washington, D.C.

That means women-owned businesses constitute almost half--46 percent--of all privately held businesses, according to the center.

Even as women's participation grows exponentially in such former male bastions as technology, manufacturing and construction, government buyers are failing to meet goals such as the 5 percent benchmark set in 1994, women's business leaders say.

"When more than 40 percent of the businesses are 50 percent-women-owned and they're only getting 2.39 percent of the federal procurement dollars, there's obviously a pretty huge gap there that needs to be corrected," says Erin Fuller, executive director of the National Association of Women Business Owners, a membership group for women entrepreneurs that is based in McLean, Va.

The Small Business Administration does not argue with these critiques and has launched outreach programs to help match agencies with suitable women-owned businesses, officials said in a written statement for Women's eNews.


Women Hindered by Outdated Regulations

One major obstacle to women winning federal contracts is the sheer number of arcane ways that agencies identify and track the size of a contractor's business. A recent study by the General Accounting Office, the investigative arm of Congress, found that because of poor definitions and outdated regulations, big businesses are actually getting millions of dollars worth of contracts that are recorded as going to small businesses. And businesses that qualify at one time might be able to keep their small business status for as much as a 20-year contract under current rules, the office says.

For example, business giants such as Verizon, AT and T Wireless, Dole Foods and KBR, a subsidiary of Halliburton, the world's largest supplier of oil field services, have enjoyed "small business" designations, according to a recent analysis by The Associated Press.

At the General Services Administration, officials have pledged to address inaccuracies in government data, according to press accounts.

Yet other problems arose when the government moved in 1994 to streamline federal purchases. One result was a practice known as "contract bundling," which pools many formerly smaller contracts into huge "bundled" contracts. The bundling of federal contracts allows government agencies to deal with one contractor, who then subcontracts with other businesses.

Bundling has become a leading political issue for business owners and elected officials from the newest members of Congress to President George W. Bush, so many changes in Snowe's bill will have bipartisan support.

Women Impacting Public Policy's Neese, who owns an executive search firm and a temporary services company in Oklahoma City, says new obstacles like bundling have imposed more barriers to women-owned businesses in an already tough market.

"For the same reasons that we go to the same hairdresser and we go to the same grocery store, federal agencies go to the same businesses in the federal procurement marketplace," Neese says. "Meanwhile, we are sitting out here waiting to do business with the federal government."

Marie Tessier is a freelance writer who covers national and international affairs.

For more information:

WomenBiz.gov:
http://www.womenbiz.gov/