The latest defense spending bill includes a major boost for women-owned small businesses. Those companies will now be eligible to win sole-source contracts from the federal government.
Supporters hope it will help female entrepreneurs land more work from federal agencies. By law, the U.S. government has a goal of awarding at least 5 percent of its prime contracts and subcontracts to women-owned small businesses. In the two decades since that goal was put into effect, the government has never met it.
President Obama signed the National Defense Authorization Act, which included the sole-source measure, before Christmas.
“Passage of the women’s small business provision in NDAA is a win for women entrepreneurs and a win for America,” said Maria Contreras-Sweet, head of the U.S. Small Business Administration.
“This will help women-owned small businesses gain equal access to federal contracting as they add jobs to the U.S. economy. A big thank-you to the leaders of the Senate and House Small Business and Armed Services Committees for helping make this a reality.”
Small businesses that are based in Historically Underutilized Business Zones or are owned by service-disabled military veterans also can qualify for sole-source contracts. Basically, this gives government procurement officers the ability to award work to these businesses without putting it out for bid to multiple companies.
This fall, when the U.S. Government Accountability Office looked at the government’s track record on contracting with women entrepreneurs, several experts recommended offering sole-source contracts to women-owned companies as a way to increase their share of federal business.
That same study notes that more than 40 percent of companies that received contracts as women-owned small business in 2012 and 2013 didn’t actually meet the standards for that program. The GAO has recommended that the SBA tighten its review of women-owned companies’ eligibility and increase its oversight of third-party organizations that certify small businesses as being women-owned.
