SBA Proposes New Rule to Expand Federal Contracting Opportunities for Women

SBA Proposes New Rule to Expand Federal Contracting Opportunities for WomenLast month, the U.S. Small Business Administration released a proposed rule that would expand federal contracting opportunities for women-owned small businesses. Currently, the government’s goal is that 5 percent of federal contracting dollars be directed to women-owned small businesses, but that goal has not yet been met.

“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,” said SBA Administrator Karen Mills. “This proposed rule [Women-Owned Small Business (WOSB)] is a step forward in helping ensure greater access for women-owned small businesses in the federal marketplace.”

In order to assess women’s participation in government contracting, the SBA analyzed the federal procurement market since 2000. The Obama Administration decided to draft a new rule (different versions of these rules have been introduced several times in the past few years) incorporating all the analysis, questions and comments up to this point.

During the Bush Administration, an earlier proposed version of the rule drew a firestorm of criticism from women’s business advocates because it identified only four industries where WOSBs were underrepresented. Based on a Kauffman-RAND Foundation study commissioned by the SBA the new proposed rule identifies 83 industries where women-owned small businesses are underrepresented in federal contracting. The new proposed rules used both “share of contracting dollars” and “share of number of contracts awarded” to determine where WOSBs are underrepresented.

Other components of the proposed Women-Owned Small Business (WOSB) rule include:

  • Eligible businesses must be 51 percent owned and controlled by, and primarily managed by, a woman or women. The women must be U.S. citizens, and the firm must be “small” as defined by the SBA’s size standards for its industry.
  • A prior version of the rule had required that the program wouldn’t apply to federal agencies unless those agencies certified that they had discriminated against WOSBs. This rule removes that requirement.
  • Women-owned small businesses can self-certify as “WOSBs” or be certified by third-party certifiers.  WOSBs that self-certify would submit certification at the federal ORCA Web site and submit a core set of documents to an online “document repository” that the SBA will maintain and that each agency’s contracting officers can access. The SBA will vigorously pursue unqualified companies that take advantage of the program.

Comments can be submitted until May 3, 2010, to Regulations, or by mail to Dean Koppel, Assistant Director, Office of Policy and Research, Office of Government Contracting, U.S. Small Business Administration, 409 3rd St. SW, Washington, DC  20416. Reference RIN 3245-AG06 when submitting comments.

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Rieva Lesonsky Rieva Lesonsky is a Columnist for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her blog, SmallBizDaily, to get the scoop on business trends and free TrendCast reports.