Opening Doors for Woman-Owned Businesses
Feb 4th, 2008 | By Dawn Rivers Baker | Category: PodcastsI’ll confess immediately to you that last week is not destined to go down in history as one of the nation’s most exciting in small business news.
But, in many ways, it was very interesting.
For example, the debacle of the Women’s Procurement Program might be a never-ending thorn in the side of countless women business owners and the organizations that represent them but it has also highlighted the overarching problem of making selling to the feds easier to do — something that not enough people are talking about.
We also have reports on the issue of rural access to broadband and President Bush’s final State of the Union Address. And, as always, this week’s Policy Matters column.
There is also going to be a Podcast Special later this week, when I post my interview with SBA Administrator Steve Preston. That proved to be a surprisingly fun interview and I think you’ll enjoy it, too.
For further information:
House Small Business Committee Hearing Archive: SBA’s Progress on Women’s Progurement Program
Senate Small Business Committee Hearing Archive: Holding the Small Business Administration Accountable: Women’s Contracting and Lender Oversight
Broadband and Unbundling Regulations in OECD Countries (PDF)
Technorati Tags: politics, federal procurement, woman-owned businesses, State of the Union, broadband, microbusiness
The House of Representatives Committee on Small Business believs that the proposal falls short. By 13 February, the Honorable Nydia Velázquez, Chair of the Committee, urges women business owners to write!
Email LeAnn.delaney@mail.house.gov with stories of how you as a woman business owner have experienced discrimination in pursuit of federal contracts,and press SBA to amend its proposed rule.
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SBA’s Women’s Procurement Program was supposed to improve that record. I was thus disappointed in SBA’s Proposed Rule, published on December 27th 2007, because:
1. The Proposed Rule acknowledges that to implement the set aside for WOSBs in only the four most severely under-represented NAICS codes might offer improved opportunities for 1,208 companies listed in the Central Contractor Registry. It further suggests that more firms might potentially benefit if SBA opens up more NAICS codes following its next study on the matter, which would not be required until after 2011.
2. To limit implementation of the Proposed Rule to only four NAICS Codes — cabinetmaking, engraving, other motor vehicle dealers, and national security and international affairs — would have virtually NO impact on improving the federal government’s continuing and dismaying failure to meet the goal of awarding 5% of federal contract dollars to woman-owned small businesses.
3. To further require agencies considering setting aside contracts in any categories under this proposed rule to first perform an internal audit of past contracting actions to demonstrate corrective action for its own past discrimination before setting aside a contract virtually guarantees that the effect of the regulation will be negligible.
To produce such a Proposed Rule after seven years’ work, two studies and thousands of dollars’ worth of time and money is unacceptable in its own right. To face such a likely outcome is exceptionally so.
As noted below, more research is needed. But the Administration need not delay all action while waiting for the results of another study; this Proposed Rule can be salvaged. To be even marginally acceptable in the short term, the Proposed Rule needs amendments to:
• Remove the contingent requirement for an internal agency audit of discriminatory practices and remedies prior to designating a competition as restricted for WOSBs
• Increase the number of NAICS codes to include both underrepresented as well as significantly underrepresented NAICS codes.
Concerning the need for further research: while the aforementioned RAND report showed woman-owned businesses to be under-represented in 87 percent of the categories of goods and services that the federal government buys, even this study did not explain why this is so. To be truly effective, any proposal for policies intended to change the outcome needs to address the underlying problem – and we still don’t know what that is.
Government policymakers still need answers to the following questions:
Do woman-owned small businesses not participate in the procurement process in the same proportion as male-owned small businesses?
If they do participate equally, then why do they not win with proportionate equality?
In either case, is a set-aside program, or some other means, the most effective way to attract their interest and participation, and change the outcome of contract awards to
a) Reach the 5% goal, and, more importantly,
b) Reach proportional equality in dollar value of awards?
I have urged Congress to press SBA to make such amendments and recommend appropriate policy changes.
Judy Bradt
Principal & CEO
Summit Insight
Champion for Women Winning Government Contracts
judy.bradt@summitinsight.com
http://www.summitinsight.com
BUREAOCRACY POLICY BLUNDERS CALL FOR ENTREPRENEOUR SOLUTIONS
The Federal Government is speeding toward a procurement policy crisis because bureaucrats seldom think of out-of-the-box solutions. This is particularly true when it comes to procurement set-asides policy. They too often are merely interested in the promulgation of their own views even if it means bashing their own experts and disobeying statutory mandates.
A number of women’s groups have lambasted the Small Business Administration (SBA) for delaying the implementation of a procurement program – mandated by Congress - intended to boost the number of women-owned small firms that receive federal contracts. The SBA has taken 13 years to come up with a plan, so bizarre, that it would limit the set-aside contracts to four industries, including engraving and metalworking; intelligence; furniture and kitchen cabinetmaking; and . . . some car dealers. Women own roughly 30 percent of all companies in the United States, but in FY FY2006 they received $11.61 billion or 3.41%, well short of the 5 percent Congress wants them to have on a procurement budget which pushed $350 Billion
Too much bureaucracy to solve business issues has lead to a long line of poor decisions, unnecessary delays and bias rulings including justifying the government’s own mistakes by claiming miscoding of contracts such that billions of dollars earmarked for small businesses has gone to Fortune 500 companies. When even the Administrator of the Office of Federal Procurement Policy (OFPP) joins this bureaucracy insanity by ignoring his own statutory mandate. . . it is time to ask Congress not only to force the needed changes, but to look for entrepreneurship solutions.
Claiming that the Fairness in Procurement Alliance (FPA) recent whistle blower request for a statutory ruling on the ‘consistency of the FAR exemptions with the FAR and applicable law’ “falls outside the scope of section 25(c)(4)(A) because this section does not cover review of a legal opinion” is bureaucracy at its worst. In fact, the SBA legal opinion the OFPP Administrator referred to, had demonstrated the illegality of the exemptions and why the Administrator – by statute – has not only a responsibility, but a duty to eliminate their influence to exclude small businesses on two separate segments of public contracts.
Had the OFPP Administrator had done his job - as prescribed in the statute that created his office - and ruled that the ‘FAR Exemptions’ were NOT consistent with the FAR and applicable law, as even many Members of Congress were expecting, there would be in excess of $60 Billion in available set-aside contracts with which to level the playing field.
Those facts contradict the SBA Administrator’s January 22nd comments that, “We’re making it much harder for [agencies] to hit their numbers” (meaning their set-aside goals.)” They also verify the facts listed on the March 2007 GAO Report GAO-07-1255T, which recommended for DHS, GSA and DOD “to take steps designed to ensure compliance with federal contracting regulations” and pointed to the lack of effective advocacy for small and disadvantaged businesses at those agencies due to no direct reporting relationship to the Agency heads.
The basic point I am making is that bureaucrats, again, took an unnecessary and wasteful amount of time (10 years) to challenge the legality of the ‘FAR exemptions.’ By avoiding a ruling on the illegal regulations now, the OFPP Administrator has indicated his intention to allow the procurement abuses to continue which would not only waste billions in taxpayers dollars but allow for ‘large businesses’ to continue to monopolize federal procurements.
Congressional sources estimate that over the last decade, these illegal FAR exemptions have diverted $640 billion in contracts away from the statutory rights of small businesses.
Is there an entrepreneurship answer to this debacle? Absolutely! An out-of-the-box solution had been staring at the bureaucrats right in front of on their faces. I am referring to Public Law 95-507.
Executive Order 11458, which dates back to 1969, made the expansion of procurement opportunities for women already possible. Those provisions were incorporated into P.L 95-507, formally enacted in 1978. P.L. 95-507 stipulates, “It is the policy of the Government to provide maximum practicable opportunities in its acquisitions to small businesses, small disadvantaged businesses and women-owned businesses.”
P.L. 95-507 formally established the Small Business Disadvantaged (SBD) Program which IS and has always been the perfect vehicle for bureaucrats to have used to accommodate the 1994 Congressional mandate which would have given women-owned businesses the 5 percent share of Federal contracts Congress wanted. Why bureaucrats took 13 years and never looked outside-of-the-box for the solution bedazzles all of us working on an entrepreneurial solution referred to as the ‘umbrella initiative.’
What bureaucrats need to be concerned with is to stop large businesses from monopolizing public procurements. Large businesses have managed to unfairly and unethically secure contracts earmarked for small businesses without fear of legal reprisal. Currently, even if a small business protests a set-aside award to a large business and wins, there are no assurances of getting the contract back or gaining any benefits or compensation for the effort — and that is simply not only unfair but un-American. I clearly proved that point when, in 2005, I challenged a large business alleged ‘front’ and won the case (SIZ-2005-05-09-22)
Clearly, there is an obvious need to fix the procurement system, including its contracting vehicles or create a new mechanism, which would isolate set-aside contracts, bring more small businesses into the competition and thus prevent the continuation of the abuses and bureaucratic blunders of the past. The 110th Congress has passed countless numbers of bills to bring both oversight and transparency to public procurements. Let’s continue the progress!
The plight of women-owned businesses and the recent OFPP position on the FAR Exemptions case are clear indications that everyone, small businesses, bureaucrats, and elected officials would be far better off by supporting a creative non-partisan and entrepreneur-driven private initiative to transform and add value, nurture, and enhance procurement opportunities for small and disadvantaged businesses including women-owned businesses.
A joint effort between the Fairness in Procurement Alliance (FPA) and the University of North Florida (UNF) would create a mega small business procurement center as an umbrella of private businesses (with academicians and attorneys as well) responsible for the delivery of essential services and benefits to small and disadvantaged businesses all over the country. The activities of this mega center would be unprecedented because these services would be using the latest technologies to integrate a multitude of existing services into one. Most importantly, the mega Center will be in the hands of entrepreneurs as opposed to bureaucrats and. . . it would have the oversight and transparency, Congress demands.
This new partnership would allow State and local governments with ‘procurement set-aside programs’ – that are in compliance with Federal statutes - to take advantage of this far reaching effort and save taxpayers dollars at the State and municipal level while helping their local small businesses in the process.
This entrepreneur initiative would be accomplished by eliminating constitutionality issues and duplicative efforts; by enhancing the marketing of the services; and by integrating established services to maximize the benefit of a combined effort.
The mega Center effort would transform countless individual efforts into one essential service to empower and track small and disadvantaged businesses and their progress to make sure they are securing a fair share of public contracts not only at the federal level, but at the municipal and state level as well. Yes, we want these small businesses to grow – and not remained small – and moved out of the program so that other small businesses can have similar opportunities and take their place.
With the private umbrella initiative in place, procurement set-aside programs at the state and local government will be better protected from the challenges they have unfairly received when they have been linked to race. Finally, with the inclusion of a legal unit in its mix to both defend their statutory rights, prevent their abuse and facilitate the litigation of their cases - an opportunity they never had - the SBPC would avert a procurement crisis that would otherwise occur by relying on bureaucrats, until hell freezes over, for the solutions.
Raul Espinosa, Founder and Spokesperson
Fairness in Procurement Alliance (FPA)
raul.espinosa@fitnet.net
http://www.fpaportal.org