Testimony on SBA Proposed Rules on Set-Aside Program

May 8, 2015 | Uncategorized

(January 1, 2008) — On behalf of the National Association of Women Business Owners® (NAWBO®), its 9,000 members and 80 chapters across the country, we strongly oppose the recent Small Business Administration proposed rule regarding federal contract opportunities for women-owned businesses. NAWBO believes that this proposed rule lacks any acknowledgment of the strength of the more than 10.4 million women business owners within the United States today. Instead, these rules gut the more than decade-old Congressional mandate designed to ensure that women business owners have access to five percent of federal contract spending.

As a business owner, federal contractor and president of the only dues-based national organization representing the interests of all women entrepreneurs across all industries, I am disappointed that the Small Business Administration has, again, failed to be an advocate for women business owners. NAWBO urges the US House of Representatives Committee on Small Business to reconsider these ill-conceived rules, and I look forward to a brand New Year when we can work together with both Congress and the SBA to develop a policy that will truly benefit women entrepreneurs.

It has been clear to women business owners for some time that the SBA has never evidenced commitment to implementing the women owned small business set-aside program or to assuring that women owned businesses get their fair share of federal contract dollars. It took a lawsuit to get the SBA to focus on complying with the law establishing the set-aside program, which Congress mandated in back in 2000. And now, instead of taking a step forward in implementing the seven-year-old mandate to establish a set-aside program for women owned small businesses, the SBA’s proposed rules eviscerate the program.

In 1994, Congressional legislation mandated that five percent of government contracts go to women-owned businesses. To help meet this goal, a set-aside program for women-owned businesses was established in 2000. Currently, only three percent of federal contracts go to women-owned businesses. The new SBA proposed rule will only allow federal agencies to implement the set-aside program for women owned businesses in four of over 2,300 business categories, and even then, only after the agencies individually document that they previously discriminated against women-owned businesses. If implemented consistent with the proposed rules, the set-aside program will do little if anything to increase the share of federal contracts that go to women-owned businesses.

The annual opportunity cost to women business owners for this spending shortfall approaches $5 BILLION, based on receiving five percent (rather than three) of the $277.5 billion spent by the federal government with prime contractors in FY 2003. Women business owners felt this small procurement goal was worth fighting for in 1994; it is no less important today. Meeting the five percent procurement goal is both possible and productive. It will help women business owners achieve greater success.
NAWBO has proactively engaged the Small Business Administration on this issue over the last three years. NAWBO encourages the SBA to reconsider the proposed rule and to take other actions designed to assure that women business owners get their fair share of federal contracts and no less than the five percent of federal dollars that Congress set as the target in 1994.

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