With March being Women’s History Month, it’s an appropriate time to review what’s going on with women-owned small businesses and federal contracting. To help women compete for lucrative government contracts (the U.S. government is the largest buyer in the world), the federal government is supposed to award a certain percentage to companies owned by women.
Let’s look at what the set-asides goals are, who can qualify for them, and whether the government is living up to making its desired awards.
History of set-asides
Congress created the first set asides for government contracting awards in 1978 to see that small businesses got their fair share of these awards. Ten years later, Congress directed the executive branch to set specific goals and, in response, the SBA set a goal for the federal government to award 23% of its prime contracts and subcontracts to small businesses.
In 2011, a special award goal was set for women-owned small businesses (WOSBs). Of this 23%, 5% has been allocated to WOSBs and another 5% to economically disadvantaged businesses (women and/or men-owned).
Women-owned small businesses
To be designated as a women-owned small business (WOSB), a company must be at least 51% owned and controlled by one or more women, and it must primarily be managed by one or more women. The women involved must be U.S. citizens. The company must meet “small” size standards for its industry; these standards are set by the SBA.
To be eligible to compete for WOSB set-asides, you must either be certified by an SBA-approved Third-Party Certifier, or you may self-certify in accordance with current SBA regulations.
For a WOSB to be considered “economically disadvantaged," the owners must demonstrate economic disadvantage under the SBA’s rule. Under this SBA rule, “economically disadvantaged individuals are socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities.”
Record for WOSB contracts
On March 2, 2016, the SBA announced that for the first time the federal government attained its contracting goal for WOSBs. It awarded 5.05% to WOSBs in its 2015 fiscal year ending September 30, 2015. These awards amounted to $17.8 billion.
SBA commissioner Contreras-Sweet said “5% is no longer our ceiling but our foundation upon which to build.” She also said the SBA would add 36 new industry categories in which women can now compete for set asides, an action that will expand contracting opportunities.
You can find out more about WOSB and federal contracting through the SBA. If you’re curious to see how the federal government is doing with respect to its contracting awards, with a breakdown by agency, you can view the government’s Small Business Dashboard.