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minority certification women-owned businesses

Government contracts why gender equality is still an issue

Did you see the recent article by Erin Andrew at the SBA regarding government contracts? It celebrated the federal government reaching their five percent women’s small business contracting goal. While they may have reached a new benchmark, it’s actually quite discouraging to see such a disproportionate figure of five percent, especially when women now own 36 percent of all businesses in the US.

African American business woman government contracts

An opinion on gender equality in business

A reader’s comment on the SBA article raises a very valid point:

“Can you help us understand why if women own nearly 30 percent of small businesses why the goal of five percent is one to celebrate? I realize not all women-owned small businesses would be qualified but isn’t five percent a low goal? What can be done to increase this percent at a faster rate?”

Why gender equality is still an issue at government level?

While the goal achieved is a positive step, it still highlights a lack of gender equality. Interestingly, the goal was set in 1994 and it’s taken over 20 years to achieve. So not only is this a small achievement, it’s also taken an incredibly long time to attain. The government must therefore take stronger action to work towards creating equality for female entrepreneurs and increase their contract opportunities for women.

Additionally, research highlights that women are 21 percent less likely to receive a government contract when competing against a business operated by men. That’s a significantly worrying statistic for female business owners. It’s important for the government to lead by example, as their leadership and policies are highly influential for businesses across the USA.

What are the solutions?

No matter how much we strive, female entrepreneurs are still at a disadvantage when competing at federal, state or local governments. With women 21 percent less likely to win a government contract, legislation and procurement processes need to be challenged.

Two potential solutions are certifications for EDWOSBs and a higher level of transparency at government level, offering increased opportunities for women in business.

minority certification women-owned businesses

We recently debated whether minority certification is beneficial for women. Certifications for economically-disadvantaged women-owned small businesses (EDWOSBs) may be one solution for improving gender equality at government level. This allows female entrepreneurs to increase their likelihood of success when applying for government contracts, if they can offer substantial value. However, achieving the certification can be a time consuming and expensive process, which is not guaranteed to pay off.

Another solution may be to increase pressure on federal agencies by tracking minority success rates during the vendor’s registration process. This would increase visibility and transparency across the board for government contracts, therefore improving diversity levels. Higher rates of equality and gender representation is an opportunity for the government to increase opportunities for female entrepreneurs, while allowing them to compete on a level playing field with other businesses.

If you have any ideas about how to increase gender equality in government contracts, please let us know by commenting below.

certified women-owned business

Women-owned small biz federal contract program, friend or foe?

Maria_Contreras_Sweet_portrait

Maria Contreras-Sweet, SBA Administrator

Are you a certified minority or women-owned business? And what does the certification mean for your business? Is your business qualified for minority or women-owned certification just because you are a woman or a minority?

I have asked these and other similar questions to several Latinas business owners and few of them were indeed certified or knew the answers.

According to the Small Business Administration, President Obama’s signature of the National Defense Authorization Act (NDAA) for fiscal year 2015 is a critical move for women-owned small businesses to earn their fair share of the federal marketplace and gain economic opportunities.

Although legislation existed since 2000, implementation has been a promise since President Obama took office. Finally, it was implemented in April 2011. Section 825 of the NDAA authorizes federal agencies to award sole-source contracts to women-owned small businesses eligible for the Woman-Owned Small Business (WOSB) Federal Contract Program, giving women the same level of access to the federal contracting marketplace as other disadvantaged groups.

“Women entrepreneurs are growing at an unprecedented rate.  More than one in four U.S. companies is owned or led by a woman, and these firms employ more than 7.8 million Americans.  Passage of the women’s small business provision in NDAA is a win for women entrepreneurs and a win for America.  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,” said the head of the U.S. Small Business Administration, Maria Contreras-Sweet.Our economy won't work

Currently, women entrepreneurs are receiving less than five percent of federal contracts.  This new provision will give the SBA a new tool to continue to open doors for more women entrepreneurs in the federal and commercial contract space.    SBA’s efforts include aggressively offering support for the Women-Owned Small Business Contract Program, which aims to expand federal contracting opportunities for women-owned small businesses.

Tina Dante, CEO/President, The Metamorphosis Group, shared on the LinkedIn group Women Impacting Public Policy (WIPP), “This has been a long time coming, and I heartily applaud it! HOWEVER, I sure hope there is oversight on this, because this also brings out the worst in people. It already is a challenge to compete with other supposedly “woman” owned businesses in the federal market, when we all know that the ‘woman’ is nowhere to be found….the real front person is a husband or a close friend. Let’s hope that the SBA keeps tight reins on this program.”

Vilma Betancourt-O’Day, President at Women Wrule, also clarifies on the same discussion: “I am a Certified Site Visitor for the National Women Business Owner’s Corporation (NWBOC), an approved 3rd party WBE certifier, a WBE/Minority/Small Business Certification consultant and an experienced Government Contractor (Federal, State, Local Municipalities. According to the Government Accountability Office (GAO)’s report on the WOSB Certification Program, two groups representing WOSBs stated that Contracting Officers prefer 3rd party certified WOSBs/EDWOSBs as the review process is less tedious for them. Fraud has already been an issue with this program as there is little to no oversight on the Self-Certified WOSBs/EDWOSBs,” she says.

And she continues: “Based on my experience as a Government Contractor, if a business entity does not have sufficient money to spend on marketing its services and/or products to the Government (and the WBE Certification is a huge marketing tool), they’re not prepared to sell to the Government. You must have enough cash to cover your payroll and other expenses incurred while working on the contract, until you get paid by the Government. It takes lots of money to get into the Federal arena. The Agencies want to make sure that you have enough cash in the bank so you don’t default on the contract.”

“Bottom line,” she adds, “Any WBE that wants to grow their business with Government or Corporate Supplier Diversity contracting, should invest in themselves and their businesses with a WBE/Minority/Small Business Certification. It must be part of their annual marketing budget.”

What is your experience regarding this topic?  Share with our community your story so we can learn form each other!

WOSB Program Third Party CertificationUpdated

The SBA has approved four organizations to act as Third Party Certifiers under the WOSB Program. The four organizations and contact information are:

Women Owned Small Businesses may elect to use the services of a Third Party Certifier to demonstrate eligibility for the program, or they may self-certify using the process outlined here on this website. SBA will only accept third party certification from these entities, and firms are still subject to the same eligibility requirements to participate in the program.

Please note, at the request of WBENC, SBA has approved WBENC only for the certification of WOSBs and not for the certification of Economically Disadvantaged WOSBs.