The U.S. Small Business Administration recently released its 2013 Small Business Procurement Scorecard. And for female entrepreneurs, there was some good news to be found — of the $83.1 billion spent on small businesses in all, 4.32 percent of that lump sum was awarded to women-owned small businesses. It marks an increase from the 4 percent that received federal contracts the previous year.
However, that figure still falls short of the long-standing goal of 5 percent, which was set by the Women-Owned Small Business federal contract program in 2011.
The SBA has been working alongside Women Impacting Public Policy (or WIPP, a nonpartisan advocacy organization founded in 2001) and American Express OPEN via the ChallengeHER campaign on ways to rectify the issue.
We recently spoke with WIPP Executive Director Kristie Arslan, who is spearheading the organization’s procurement efforts. Arslan, a small-business expert and advocacy veteran, told us that education and reform are key in improving access to these contracts for female entrepreneurs. Here’s what else she had to say on the matter.
Edited interview excerpts below.
The Story Exchange: If women-owned businesses are supposed to be getting 5 percent of government contracts, why aren’t they? And, do you think we will ever see the government meet this goal?
We’re hoping so. To offer a bit of background, in 2001, we got the 5-percent set aside passed into law. But even though it went through then, it didn’t go into effect until 2011. So we’ve really only had two years — we are still almost in the beginning stages. Also, the current WOSB program is limited. Basically, the way contracting works is that they designate what industry a contract is related to. Depending upon different codes, it affects what small businesses can apply. It has to do with the North American Industry Classification System, or NAICS. The contracting office can only set aside for a total of 83 NAICS codes in the WOSB program. And a significant number of industries don’t apply. For example, IT is not one of the NAICS codes in the WOSB program. So contracting relating to IT can’t be set aside for female entrepreneurs. One of the efforts we are working on is to expand that number. We are working on legislation with the SBA to accelerate a disparity study, to find out where women are most underrepresented in terms of funding; that could help us significantly toward meeting that 5-percent goal.
The Story Exchange: When will this study be performed?
It’s not slated to be done until 2017. We are pushing for 2015, and this legislation [that we are working on] would do that. The new SBA administrator, Maria Contreras-Sweet, has come out in support of this. She’s on board, but we do need to get legislation passed. It’s passed in the house, but now we have to get it passed in the Senate, which is a completely different animal. There’s a lot more politics at play, and we’re approaching midterm elections. But, we do have widespread support, and we are making a lot of progress. It would likely not be a stand-alone, but rather, an amendment to a larger bill. The key hurdle would be getting that amendment passed.
The Story Exchange: What other initiatives is WIPP presently focusing on?
We have been working with Sen. Jeanne Shaheen on the Women’s Small Business Procurement Parity Act. Right now, the way the program works is, if the business falls under an NAICS code that qualifies in the WOSB program and there’s a contract, an officer then has to find two qualified contractors before money is set aside. The challenge is, they have to do the work of finding competitors to bid on the contract to get it set aside. What ends up happening is, one woman applies, and the contract owner has to find others to apply in order to set it aside for the business. Under this act, they could instead see one qualified business owner and set it aside. It would really help us meet the goal a lot quicker, because the contract officer doesn’t want to do the work of finding another woman-owned business for the proposal. And usually they leave it to the existing business to find someone else.
The Story Exchange: In regards to this year’s numbers, though they fall short of the goal, would you call the results a “win” or a “loss” for female entrepreneurs?
We are definitely moving in the right direction. What we see from the scorecard is that the SBA and the federal government met their overall goal, which is a huge achievement from where they were previously.
The Story Exchange: What else can be done to continue turning the tide?
Education is key, especially for contracting officers on the WOSB program. Right now, because it’s newer, we’ve seen more contracting officers using the 8(a) Business Development Program and other set-aside programs rather than this. We are encouraging them to do otherwise, though some agencies are better than others. Education of business owners is also key. Women are still learning about opportunities in the federal marketplace. It’s not easy to become a federal government contractor — there are a lot of hoops, and it’s expensive and time-consuming. Our goal through ChallengeHER is to make it as easy as possible.
The Story Exchange: In what ways does ChallengeHER help?
Part of how we accomplish this aim is through our new certificate program, an education module consisting of three levels. We walk women business owners through submitting their first proposal for government contracting. They receive a certificate for each level they complete. This makes it easier for a contractor to find them. The more women that take the time to get educated … the more you’ll see them submitting proposals.
The Story Exchange: Why are federal contracts so important for female entrepreneurs?
A federal contract could double your income. The challenge is, you have to be ready. You have to plan and prepare. You have to be able to build your business. Really with contracting, the key component is past performance. They want to see that you’ve been successful. When you get your first contract, it is critical that you do a good job, that you work well with the contracting officer, and that you fulfill needs efficiently and effectively. That plays hugely into the ability to get future contracts. WIPP has seen business owners build their businesses exponentially through federal government contracting. The revenue from that allows WOSB to expand to other revenue streams and corporate supply chains. But you have to be ready.
The Story Exchange: Any insights to offer women business owners considering this route?
There is a misconception that you have to be a large business to get contracting. We’ve heard women say, “I’m just a small firm. It’s just me and two other people.” Some government contractors are self-employed, others run micro-businesses of 10 employees or less. You don’t have to be a midsize business to take advantage of contracting opportunities that are out there. Also, try not to be overwhelmed by jargon. The terminology is different, but that’s what WIPP is here for; to help you navigate the process. We’re happy to see that we’re moving in the right direction on these numbers. Women are starting new businesses every day, and growing at a faster rate than other small businesses. Making a connection to the federal government marketplace is key to keeping that momentum going.