New SBA rule designed to boost government contracts awarded to women-owned small businesses

The Small Business Administration has published a new rule intended to help women-owned small businesses win more federal contracts, as the government continues to fall short of its goals for steering business to such firms.

The SBA is targeting 83 industries in which women-owned small businesses have generally been underrepresented, including services as varied as drywall and insulation, air traffic control, engineering services and armored car services. The new rule would go into effect early next year.

Federal law already sets as a goal that 5 percent of federal contracting dollars should go to women-owned small businesses.

"Over the past decade or so, there's been a contracting goal without the actual tool to help women win those contracts," said SBA spokeswoman Hayley Meadvin.

Last year, 3.68 percent of contracts went to women-owned small businesses; that figure was at 3.4 percent in 2008.

Under the new rule, a contracting officer making an award within the designated industries can give women-owned small businesses the same kind of extra consideration that other designated groups, such as veteran-owned or disadvantaged small businesses, already receive, said Meadvin.

"This gives women a leg up within those industries to compete on a level playing field among other small businesses for contracts," she said.

However, the rule only applies to contracts worth no more than $3 million for services and no more than $5 million for manufacturing.

To be an eligible women-owned small business, a company must be at least 51 percent owned and controlled by at least one woman and primarily managed by at least one woman and must meet SBA size standards.

Alan Chvotkin, executive vice president and counsel at the Professional Services Council, an industry trade group, said his organization backs the rule change but that it's too soon to tell whether it will have the desired result.

"I'm hearing from small businesses that they're going to watch how it goes," he said. "It's not effective yet, [and] there's a lot of documentation that still has to be developed."

Kristen E. Ittig, a partner in Arnold & Porter's government contracts practice group, said her clients are cautiously optimistic. She said some women-owned firms that haven't previously worked with the government are now considering it.

Women's groups have lauded the change. Linda J. Denny, president and chief executive of the Women's Business Enterprise National Council, which certifies and advocates for women-owned businesses, said there are billions of additional dollars in federal contracts to be won if women reach the 5 percent goal.

"The businesses are really very anxious for it," she said of the new rule.