SBA launches new woman-owned small business federal contracting program, $21 billion in potential revenue for women entrepreneurs

While politicians and pundits debate deep budget cuts to reel in national debt, women entrepreneurs are getting in position to vie for a piece of whatever federal spending remains once the budget squabbles are done.  

Recent government data shows that women entrepreneurs continue to lag behind their male counterparts but President Barack Obama's U.S. Small Business Administration has just introduced a Congress-approved initiative that may finally set women business owners on a path to parity: the Women-Owned Small Business (WOSB) Federal Contract Program.

Michele ChangThe idea for this initiative is not new.  In 1994, Congress mandated that five percent of the federal small business spend should be with woman-owned companies but 17 years later that has not happened. 

Michele Chang, a senior advisor in the SBA's Government Contracting and Business Development Office, says, "Congress actually passed a law to put the women-owned small business program into place in 2000 to help meet the five percent goal.  The program languished for some time and finally has been put into place.  We have other goals, like HUB zone goals and veteran-owned small business goals.  Well all of those goals also have tools attached to them that help [federal government] agencies meet the goal.  Until now there had not been a tool that contract officers could actually use to reach the goal for woman-owned business set asides."

So, the goal was set in 1994, the mandate for the set-aside program was passed in 2000 — and now, finally, the initiative to actually reach the goal has been launched.  For the most part.  Advocates for women entrepreneurs should wait before taking a victory lap.  Chang explained that a couple more technical regulatory hurdles must be cleared before the program is final and official.  Plus, there will be a "ramp up" period before contracts are let.

"The program is effective in SBA regulations [as of February 4, 2011] but it is still going through Federal Acquisition Regulations (FAR), which is what all contracting officers must follow," Chang said. "The FAR process should be complete by April; and what we're really excited about is that all parts of this program should be in place by the 4th quarter, which is really when the largest percentage of small business contracts are awarded," Chang said.

Big revenue potential for women
Would-be contracting opportunities may dry up or be less lucrative with all the talk of federal budget cuts to reduce U.S. debt, but, still, based on the most recently available small business contract data, if the federal government reaches its five percent goal for doing business with women, that will mean $21.5 billion in revenues flowing to woman-owned small businesses who meet WOSB program requirements.

Extensive details are outlined on the SBA's website but, in a nutshell, to qualify for the Women-Owned Small Business Federal Contract Program, a business must be:

•  "Small," which, as defined by the SBA, is one with less than 500 employees; and
•  51 percent owned, controlled and managed by one or more women who are U.S. citizens.

In addition to these basic requirements, a woman small business owner gains an additional competitive edge if she is considered "economically disadvantaged," which, based on SBA rules for this program, means she has a personal net worth of less than $750,000 and the fair market value of all her assets is less than $6 million. 

Also, while any qualified business can vie for federal government contracting opportunities, federal contracting officers can only "set aside" a contract for the WOSB program if the contract deliverables fall within selected NAICS codes that represent industries in which woman-owned businesses are under-represented or severely under-represented in federal government contracting. The codes were identified based on a 2007 Kauffman-RAND study.