After 22 Years, Federal Government Finally Meets its Goal of Awarding 5% of Government Contracts to Women

Monday, March 07, 2016
(graphic: Sharon Kane, Getty Images)






By Stacy Cowley, New York Times


After more than 20 years of effort, the federal government has, for the first time, met its goal of awarding 5 percent of the money it spent on contractors to businesses owned by women.


Small companies captured 25.8 percent of the government’s contracting dollars last year, representing $90.7 billion, the Small Business Administration  announced Wednesday. About $17.8 billion of that total went to businesses owned by women during the fiscal year, which ended in September.


The news comes on the heels of a Commerce Department analysis showing that businesses owned by women are 21 percent less likely to win government contracts than otherwise similar companies. Companies owned by women tend to be younger and smaller than other businesses, but even accounting for those differences, the disparity remains, the agency found.


The government set its 5 percent target in 1994 for spending on women-owned businesses, which are defined as those that are at least 51 percent controlled by women. It repeatedly fell short.


Five years ago, the government adopted new rules allowing agencies to set aside specific contracts for bidding only by companies owned by women.


“I think we can attribute the government meeting its goal directly to that being put in place,” said Ann Sullivan, the head of government relations for Women Impacting Public Policy, a group that lobbied for the change. “They weren’t going to meet it simply by wishing and hoping; there needed to be a program specifically designating some contracts.”


A more recent change, made late last year, allows procurement officers to go a step further on some small contracts and award them directly to qualified companies, without competitive bidding.


Rebecca Boenigk, the chief executive and a co-founder of Neutral Posture, a furniture manufacturer, said her federal sales increased immediately after the change. She brought in $7 million last year from government contracts and expected that number to double or triple this year.


“All of the sudden, we’re getting calls and interest from all over the place,” she said.


Her company, in Bryan, Texas, employs about 100 people. It has been a government contractor for more than 20 years, but set-asides for businesses owned by women have been of little use to Boenigk because there are so few others in her industry for her to compete against.


“There are only three qualifying women-owned furniture manufacturers in the United States, and you have to have at least two for a bid,” she said. “Now a contracting officer can just write a purchase order to us.”


About 36 percent of the businesses in America are owned by women, according to census data. Most have no employees other than the owner, but those with employees have a collective workforce of 8.4 million.


Working with industry groups, the SBA increased its outreach efforts in recent years to teach women who are entrepreneurs about federal procurement opportunities and help guide them through the often complex process of preparing bids. Maria Contreras-Sweet, who became the agency’s head two years ago, made meeting the federal contracting goal a priority.


Women in Congress have also pressed for progress in recent years, introducing and passing several pieces of legislation intended to make contracts more obtainable for women who own businesses.


Nydia M. Velázquez of New York, the ranking Democrat on the House Small Business Committee, called the achievement of the government’s procurement goal a long-overdue milestone.


“For too long, the federal marketplace operated as an old boys’ club where contracts were steered to large companies, denying women entrepreneurs opportunities to grow their businesses,” she said. “This most recent announcement certainly exhibits progress, but we still have a way to go.”


Sullivan said she, too, hoped the momentum would continue.


“Five percent is not a big goal, and it seemed like it took forever to meet it,” she said. “I’m hoping that agencies now won’t sit back and go, ‘The women are taken care of, we don’t have to worry about it anymore.’ I hope this will instead show that if the government is determined, they can make it happen.”


To Learn More:

Women Own 30% of U.S. Businesses, but only get 4% of Federal Contract Dollars (by Noel Brinkerhoff and Steve Straehley, AllGov)

Companies with Women CEOs Outperform those Led by Men (by Noel Brinkerhoff, AllGov)

Little Progress for Women Execs in California’s Top Corporations (by Ken Broder, AllGov California)

Federal Government Falls Short of Small Business Contracting Goal…for 11th Straight Year (by Matt Bewig, AllGov)


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