Federal Procurement | NAWBO

Federal Procurement

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NAWBO's Position

NAWBO supports achievement of the 5% Federal procurement goal for women-owned small businesses (WOSBs) and other steps designed to assure women business owners their fair share of Federal contracts and contract dollars. Failure to achieve the 5% goal has cost women business owners an average of $5 billion in lost contracts each year.

NAWBO opposes contract bundling, the Federal government’s policy of consolidating its purchases of unrelated goods and services into a single large contract. Bundling limits the opportunities for small businesses to effectively compete, thereby restricting competition and increasing the overall cost of goods and services to the Federal government.

Secondary Positions

  • NAWBO supports legislation or executive action that will hold ALL government entities, departments and purchasing agents accountable for achieving the 5% contract goal.
  • NAWBO advocates executive branch action or legislation designed to facilitate standardization of RFP solicitation language and specifications according to the industry type being sought to fulfill the proposed contract.
  • NAWBO advocates enforcement of subcontracting plans to hold prime contractors accountable for using minority and women-owned businesses. Greater enforcement of “prompt payment” requirements to subcontractors is needed.
  • NAWBO advocates executive branch action or legislation that will create a single source of timely information regarding formal and informal opportunities (projected and planned). There should be a single portal and standardized formats for displaying procurement information and opportunities on agency websites.
  • NAWBO advocates executive branch action or legislation that will ensure agencies are held accountable for documentation and accurate valuation of bundled contracts.

Relevant Facts

  • In 1994, Congress enacted the Federal Acquisition and Streamlining Act (PL 103-355; FASA) that, among other things, set a goal of 5% of Federal contract dollars to be awarded to WOSBs. This goal has never been achieved. In fact, the amount of Federal contract dollars awarded to WOSBs has never exceeded 3.4%.
  • Recognizing the lack of progress toward the 5% goal, Congress acted in 2000 to authorize a “restricted competition” or set-aside program specifically for women-owned businesses. This program, the Women-Owned Small Business Federal Contract Assistance Program, was included in the SBA Reauthorization Act (Public Law 106-554) and has now been codified in the Small Business Act, 15 U.S.C. S 637(m). The act is sometimes known as the Equity in Women’s Contracting Act. Unfortunately, more than 10 years after Congress authorized the new set-aside program, it has yet to be implemented.
  • In FY 2006, $11.6 billion in Federal procurement was spent with women-owned small businesses out of a total spent of $340 billion. That amount was actually less than the Federal procurement dollars spent with women-owned businesses in 2005. Although women entrepreneurs account for 33% of all entrepreneurs in the U.S., the overall share of dollars the Federal government spent on women-owned small businesses was only 3.4%, up from 2.89 percent in FY 2003.
  • If women business owners had received 5% (rather than 3.4%) of the $340 billion spent by the Federal government with prime contractors, they would have received $17 billion in contracts in FY 2006—$5.4 billion more than they actually did receive. In the years since FY 2000, women-owned businesses have missed out on an average of $5 billion in contracts per year, putting the total at $40 billion since the set-aside program was established in 2000.
  • NAWBO submitted testimony at hearings of both the House and Senate Committees on Small Business stating our opposition to the Small Business Administration's proposed rule on the set-aside program issued in 2007. As originally proposed, rule would only allow Federal agencies to implement the set-aside program for women-owned businesses in four of more than 2,300 business categories and even then only after the agencies individually document that they previously discriminated against women-owned businesses. The rule was ultimately withdrawn by the SBA, and a new proposed rule was published by the SBA on March 2, 2010 which responded to a number of the critical comments NAWBO made on the 2007 proposal. The proposed rules may be found online at http://www.regulations.gov.
  • In a 2010 NAWBO issues survey, women business owners indicated that 10.1% of their revenues came from state or local governments, as opposed to a mere 4.1% in 1998. In the same survey, members indicated that 5.9% of their revenues came from the Federal government, up from 2.2% in 1998.
  • A NAWBO Member Survey in 2008 indicated that only about 11% of sales of women-owned businesses come from government contracts. However, when NAWBO members were asked about their interest in doing business with government agencies in 2008, 62.8% expressed interest, and 24.4% of members expressed extreme interest.

NAWBO Actions

In January 2008, NAWBO announced its criticism of the proposed rules issued by the Small Business Administration for the women-owned business set-aside program. Since then, NAWBO has continued to advocate to ensure women-owned businesses get their fair share of federal contracts.