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New rules may help women-owned firms get federal contracts

The guidelines aimed at getting women-owned businesses the minimum 5% of government contracts initially mandated in 1994 will focus on 83 industries, including residential construction.

August 16, 2010|By Cyndia Zwahlen

In 1994, Congress passed a law requiring that a minimum of 5% of the money spent on government contracts go to the nation's businesses that are majority-owned by women.

That was great news for women who believed they had never received a fair share of those contracts.

But the government didn't reach that mandated goal, and six years later Congress passed the Equity in Contracting for Women Act to give women-owned businesses more traction getting federal contracts.

That program was never implemented. Disagreements, including a lawsuit, held it up, and advocates for the businesses accused federal officials of foot-dragging. The closest the government ever came to meeting the goal was 3.4% in fiscal 2008. Recently, however, there was new hope that the full 5% could finally become a reality. New rules for a Small Business Administration program to get contracts to women-owned businesses are going through final review by the agency.

Karen Mills, head of the SBA, told a congressional committee last month that it's almost ready to go live.

"We expect to have this program operational by the end of this year," Mills said.

The new rules will focus on 83 industries, including residential construction.

"This will make a huge difference, and it has been a long time coming," said Holli Dorr, owner of Hollister Construction Co. in Anaheim.

The new program ensures that some contracts will go to female-owned businesses because male-owned businesses will not be considered for them.

Dorr's 20-person firm hopes to win a contract to build military housing for nearby bases.

Under the new program, "I won't have to compete with the giant companies, I'll only have to compete with women-owned companies," Dorr said. "And the women are smart and hungry — they'll figure out how to team up, form partnerships and joint ventures to do it together, and charge a little bit less."

The program could have a sizable effect in Southern California. There were about 375,550 businesses majority-owned by women in the Los Angeles- Long Beach- Santa Ana area as of 2008, according to the Center for Women's Business Research.

"Just by the sheer numbers you can't tell me there is not going to be a huge cadre of highly qualified firms" eligible for the program, said Gayla Kraetsch Hartsough, president of KH Consulting Group, a federal contractor based in Century City.

At the same time, landing a federal contract is not an easy task for newbies, Hartsough said. Her small firm recently spent almost three weeks, full time, putting together an 800-page proposal to get a piece of a U.S. Navy renewable energy pilot program at Port Hueneme.

Although rules for the women's business program are not final, advocates are already pushing for changes to make it easier for more women business owners to take advantage of it. Legislation has been introduced to lift caps that limit the program to contracts worth $3 million or less for service companies and $5 million or less for manufacturing companies.

Also, the U.S. Women's Chamber of Commerce wants to at least double the federal government's minimum goal to 10% and expand the number of industries included in the program.

"We are trying to make it apply to more women," said Margot Dorfman, chief executive of the Washington-based group.

smallbiz@latimes.com

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