SBA wants to give women-owned businesses more preferences

The Small Business Administration has drafted a new plan that would grant set-aside and sole-source contracts to women-owned small businesses in 31 industry sectors, reports Federal Times.

Currently, the government is required by law to award 5 percent of its prime contracts to women-owned small businesses ? a goal that the government has consistently missed.

Small business advocates charge the government misses this goal because agencies have no authority to grant preferences ? that is, award sole-source and set-aside contracts ? to women-owned small businesses. And in 2000, Congress directed SBA to draft rules to allow agencies to give contracting preferences to this category of contractors.

In December 2007, SBA published a proposed rule that would authorize contracting preferences to these companies only in four industry sectors: motor vehicle dealers; household and industrial furniture and kitchen cabinet manufacturing; coating, engraving, heat treating and allied activities; and national security and international affairs.

Lawmakers harshly criticized the proposal as being years late and too narrow in scope.

In August, the agency came under new leadership. The new acting administrator, Sandy Baruah, reviewed the proposal and the data underlying it and came to agree that four industry sectors was too narrow. An agency review found the data underlying the December 2007 proposed rule were flawed.

"The whole idea that there were only four industries covered didn't strike me as quite right," Baruah told Federal Times. "This didn't make intuitive sense to me."
Baruah said that in fashioning this latest proposal, SBA is relying on a different set of data: Census Bureau data that show that women-owned businesses are underrepresented in 31 of the 140 industry sectors selling to government.

Among the industry sectors added to the list by SBA: residential building construction, telecommunications, research and development, professional services and waste management.

The proposal, posted on SBA's Web site, is open to public comment until Oct. 31. It is unclear how soon the proposed rule, if approved, might take effect.

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