Better Late Than Never

Beginning early next year, federal agencies will begin setting aside contracts for women-owned businesses in industries where they have been under-represented in government contracting.

This historic event will occur more than 10 years after Congress directed the Small Business Administration to establish this program. The program was authorized in the waning days of President Bill Clinton’s administration, subjected to numerous delays during President George W. Bush’s administration, and now will finally be implemented by President Barack Obama’s administration.

Good things come to those who wait, right?

The final regulation, which will be published Thursday in the Federal Register, will allow contracting officers to set aside contracts for women-owned businesses in 83 industries. During the Bush administration, the SBA first proposed limiting the program to four industries, and then expanded its proposal to 31 industries. These proposals were made only after the U.S. Women’s Chamber of Commerce sued the SBA over its failure to move forward with the program. They were never enacted while Bush was president and were scrapped by Obama as inadequate when he took office.

Bush-administration officials claimed they had to be superdiligent in creating gender-based contracting preferences because of constitutional concerns. Officials with the women’s chamber, however, said then-SBA Administrator Hector Barreto told them the Bush administration had no intention of ever implementing the program. Barreto denied saying that, but the administration’s lack of enthusiasm for the program was evident.

The women’s chamber and other advocates for women-owned businesses were happy Obama scrapped the Bush regulation, and they are pleased with the new rule.

"This is a victory for all women who want to contract with the federal government," said Ann Sullivan, a lobbyist for Women Impacting Public Policy. "We thank SBA Administrator Karen Mills and her team for making this happen."

Advocates for women contend that setting aside contracts is the only way the federal government will ever reach its goal of awarding 5 percent of its contracting dollars to women-owned businesses. It’s never come close to achieving that goal, reaching only 3.7 percent in 2009.

"Despite their growth and the fact that women lead some of the strongest and most innovative companies, women-owned firms continue to be under-represented in the federal contracting marketplace," SBA Administrator Mills said. "This rule will be a platform for changing that.”

To be eligible for the program, firms must meet industry-based small-business size standards and be majority owned and controlled by women. Agencies will be authorized to set aside contracts of up to $3 million for such businesses, except in manufacturing, where the size of the contracts can go up to $5 million.

Women-owned businesses can self-certify that they are eligible for the program, or they can be certified by third parties, including government entities and private certification groups. Businesses that self-certify will have to submit documents proving their eligibility for the program.

The SBA said it will "vigorously" pursue punitive action against businesses that falsely claim they are eligible for this program. Government Accountability Office investigations have found that ineligible firms have received contracts in other procurement programs aimed at specific types of small businesses, such as firms located in low-income HUBZones and businesses owned by service-disabled veterans.

Over the next four months, the SBA will develop the technology and infrastructure to support the certification process and oversee the program. Contracting officers at federal agencies will be able to start setting aside contracts for women-owned businesses in early 2011, according to the SBA.

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Kent Hoover is the Washington bureau chief for bizjournals.