Women may finally get share of contracts
By Kristen Gerencher
CBS MarketWatch
SAN FRANCISCO — Female business owners who have long felt left out of the lucrative federal contracting process have new reason to be encouraged.
Both the House and Senate have introduced legislation to put some bite into a three-year-old law that aims to have at least 5 percent of federal contracts go to small, women-led firms.
At stake is $235 billion in government contracts, of which female-headed firms received only 2.1 percent in 2002, said Barbara Kasoff, co-founder of the San Francisco-based advocacy group Women Impacting Public Policy.
That share has remained constant despite years of effort. The latest action would force bureaucrats to implement the law and penalize agencies for falling short of the target, Kasoff said.
"The House is making certain that this bill is going to be enacted," she said. "If it doesn't, it's giving the Office of Federal Contracting the right to designate contracts to women-owned businesses, which they've not been able to.
Last year, there were 10.1 million firms at least half-owned by women, employing 18.2 million workers and taking in $2.3 trillion in revenue, according to the Center for Women's Business Research (www.womensbusinessresearch.org/).
One of the major barriers women face is that federal contracts often stipulate that bidders provide a menu of services, favoring "prime" bidders such as Halliburton and Bechtel, which recently landed deals to rebuild Iraq, said Erin Fuller, executive director of the National Association of Women Business Owners (www.nawbo.org/).
The practice, known as bundling, "is certainly one of the most significant factors affecting women entrepreneurs not getting their fair piece of the pie," Fuller said.
Contract bundling caused small businesses to miss out on $13 billion in contracts in 2001, according to estimates from NAWBO, which has 8,000 dues-paying members.
In 1991, the federal government awarded 86,243 contracts; of those, 26,506 went to small businesses, Fuller said. In 2000, Uncle Sam offered 34,261 contracts, of which 11,651 went to small firms, she said. "We attribute that to contract bundling."
The government may prefer to work with larger companies with which it has a track record, Fuller said. But "there's growing awareness that women-owned (and small) businesses are the engine fueling the economy in this country. To ignore those groups and not give equal opportunity for (contracts) isn't doing the economy any good."
Another obstacle to winning more contracts is a misconception that women-owned businesses are exclusively services firms, said Sharon Hadary, executive director of the Center for Women's Business Research.
In fact, the number of women-led firms in the broad service category — which includes business, engineering and information technology services — has been on the decline, she said.
Fifty-three percent of women-owned small businesses are in services, down from 55 percent in 1997, Hadary said.
Retail trade comes in a distant second at 16 percent, while 9 percent of women-led firms are in finance, insurance and real estate.
The fastest growth is in nontraditional fields such as agribusiness, manufacturing, engineering and telecommunications, with 3.4 percent in construction and 2.6 percent of female firms in the transportation, communications and public-utilities sectors, Hadary said. Wholesale trade comprises 2.1 percent.
Such data belies the claim that agencies can't find qualified women-led firms to perform the job, Kasoff said.
