(WOMENSENEWS)–The devastations of hurricanes Katrina and Rita produced new opportunities for female-owned businesses all over the country to compete for lucrative federal contracts to assist the massive recovery and cleanup efforts.
In an ideal world men and women at small and large companies compete on equal ground for new business. But small business experts and entrepreneurs keeping track of the situation in the affected states say this has not happened.
Most cleanup projects funded by the U.S. Department of Defense and Department of Homeland Security have gone to larger players dominated by male executives, both for prime and subcontractors. Small businesses–particularly those owned by women–have been left out in the cold in trying to get these jobs as well as federal contracts in general.
The Women’s Business Enterprise National Council is a Washington-based advocate of female-owned businesses that supply U.S. corporations. The group offers a designation–Certified Woman-Owned Business–to help women better compete for large contracts in which a portion, by means of various laws, are supposed to go to a diverse group of business owners.
“As far as we can tell, women are not getting their fair share of federal contracts in the rebuilding efforts in the Gulf States,” says Susan Bari, the trade group’s president.
Safety Gear Unwanted
Christine Bierman, 54, chief executive officer of Colt Safety, Fire and Rescue, a St. Louis distributor of safety gear, can attest to this. She has introduced herself to 19 prime contractors involved in the Gulf Coast cleanup effort and has called procurement professionals at the Federal Emergency Management Agency and Homeland Security. All these efforts have resulted in nothing for the 25-year-old business, which has $4 million in sales and 11 employees.
“I have 850 disaster kits, complete with wind-up radios, gloves and portable respirators, sitting in our company and no one wants to buy them for the cleanup. Hard to believe,” Bierman says.
In addition, Bierman has been trying to obtain federal contracts for the past four years with no success. This is despite winning national awards for her products and services, and praise for her work from President Bush and Defense Secretary Donald Rumsfeld, both of whom she has met personally as part of her award ceremonies.
“Most of this business is going to big companies, which is usually the case in general with these contracts,” Bari said. “Until federal agencies are given incentives to give contracts to women business owners, this situation remains difficult for entrepreneurs going after these big projects as either contractors or subcontractors.”
5 Percent Quota Not Met
The Federal Acquisitions Streamlining Act of 1994 set a goal that federal agencies would give female-owned businesses at least 5 percent of all contracts, but that number has reached only as high as 3 percent and the law does not include penalties for not reaching that goal, says Terry Neese, a leading national activist for female entrepreneurs.
Only about $8 billion in federal procurement dollars have gone to female business owners out of a total pie of $278 billion for 2005, says Neese, who is president of Women Impacting Public Policy, an Oklahoma City-based advocacy and educational organization.
Both Neese’s group and Bari’s are part of a coalition of 33 small business organizations and 500,000 women in business nationwide. The coalition hopes to help enact into law a provision that establishes a 30 percent prime contracting goal and a 40 percent subcontracting goal for small businesses in the Katrina-related reconstruction contracts. Because many small businesses are owned by women they will be helped in turn, because small businesses will be able to better compete against larger corporations.
“Even though so many contracts are being given out in the cleanup efforts after Katrina and Rita, it is still difficult for small businesses, and especially impossible for women, to avail themselves of them,” Neese says. “They still tend to go to the old-line, large companies that federal agencies have worked with forever.”
Consultant Hired to Handle Red Tape
Rebecca Boenigk, 41, chief executive officer of Neutral Posture Inc. in Bryan, Texas, has been getting e-mails saying that her company’s products are not needed for the rebuilding in nearby New Orleans, even though companies that are renovating and trying to get back on their feet could use new furniture.
Her 16-year-old business has had a contract with the General Services Administration for 14 years. Boenigk was only able to obtain that contract, worth $4 million annually, after hiring a consultant for $10,000 to help deal with the red tape and bureaucratic difficulties.
“I could not have gotten this on my own,” Boenigk says.
Prime contracts for such efforts could pay entrepreneurs as much as $15 million to $20 million and subcontracts would be worth between $2 million and $5 million. “Lucrative projects like these could really bring small business owners to a whole new level, but often they give up after trying over and over again,” Neese says.
This is true for Cynthia Judd, 44, who spent about $80,000 trying to market her product to the Department of Defense and eventually stopped out of frustration. The Edmond, Okla., chemist is the president of CJ Products International Inc., which has a patent on a skin lotion called Skin Cover that can provide protection from certain hazardous materials.
“There is not even a glass ceiling when it comes to getting these contracts. There is an invisible shield which you simply cannot break through,” Judd says.
Laura Koss-Feder is a freelance business and features writer who covers small businesses and career-workplace topics. She has written for The New York Times, Business Week, Time, Money, Investor’s Business Daily, Newsday, Entrepreneur, MSNBC.com and Self.
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