The Small Business Administration has formalized a program that allows contracting officers to set aside procurements for woman-owned small businesses, but the move to award more contracts is likely to be slow.
The SBA implemented the program in April 2011, designating set-asides for procurements in industries in which woman-owned small businesses are significantly underrepresented. There is a wide range of sectors, but the big-spending IT and professional services industries aren’t included.
Since the initiative’s implementation, there hasn’t been much of an boost in the value or number of contracts awarded to woman-owned businesses. The program also doesn’t give these woman-owned businesses special access to sole source awards or the federal mentor-protégé program.
Business owners and federal agencies alike have struggled with the program. Company officials have had trouble determining whether they qualify, while government organizations have made errors in reporting their spending and set-asides under the program.
Given the limited list of applicable sectors and the low dollar ceilings for these procurements ($6.5 million for manufacturing contracts and $4 million for other contracts), Deltek analysts don’t expect a significant short-term increase in contracts awarded to woman-owned firms.
Many agencies have already been meeting their goal of awarding 5 percent of contracts to woman-owned small businesses, even before the new program was established. In fiscal 2011, 18 of the 24 executive agencies the government measured met this goal, and a handful exceeded it.
But the most recent numbers show a slight backslide. After consistently increasing the number and value of contracts awarded to woman-owned businesses from 2008 through 2010, numbers dipped in 2011, resulting in a nearly $1-billion-dollar dip in the contracts awarded to these companies.
For woman-owned small businesses looking for new opportunities, the numbers may suggest potential targets.
The Defense Department, for instance, fell short of meeting its woman-owned small-business goal in fiscal 2011. Even though the Army, Navy, Defense Department and Air Force ranked as the top four agencies awarding the highest level of contract dollars to woman-owned firms, the services must still spend more to meet the target.
Dana Pinkava is a senior research analyst at Herndon-based Deltek, which conducts research on the government contracting market and can be found at www.deltek.com.