Women Own 30% of U.S. Businesses, but only get 4% of Federal Contract Dollars
Women entrepreneurs have made significant strides in owning their own companies. But they have progressed less when it comes to winning federal contracts, with only 4% of the value of such deals going to female-owned businesses.
A new congressional report shows that women’s business-ownership more than doubled following the passage of the Women’s Business Ownership Act in 1988, going from 4.1 million small businesses to 8.6 million by last year. Women now own 30% of all businesses, according to the Senate Committee on Small Business and Entrepreneurship’s study.
As of 2009, women-owned businesses were responsible for creating 23 million jobs (or 16% of all employment in the country), as well as generating $3 trillion in economic impact.
Despite these successes, the federal government has done little to award contracts to women running their own companies.
“Only 4 percent of the total dollar value of all small business loans goes to women entrepreneurs,” the report states, adding that the government’s goal for awarding deals to female-run businesses, 5% of all federal contracts, has never been achieved.
The department that has done the best is the Department of Housing and Urban Development, where 14.65% of the money goes to women-owned small businesses. The Department of Energy has done the worst, with only 1.24% of the value of its contracts going to women.
Some of the reasons women-owned businesses haven’t gotten as many contracts are procedural. The Women-Owned Small Business program has caps on the dollar amount of contracts that other such programs don’t have. In addition, the program is open only to certain types of businesses and it doesn’t allow for contracts to be granted under sole-source authority, under which many smaller contracts are let.
-Noel Brinkerhoff, Steve Straehley
To Learn More:
21st Century Barriers to Women’s Entrepreneurship (U.S. Senate Committee on Small Business and Entrepreneurship)
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)
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