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Looking at the past fifteen years of progress women business owners have made, I am reminded that there is no one-step solution to solve inequalities between male and female-owned and large-and-small businesses. Rather, women-owned firms have chipped away at the inconsistencies in the federal marketplace and urged elected officials and policymakers to consider women businesses owners in their decision making.
Women-owned businesses have gained ground and we can see the progress on a number of fronts. Last year, the Census Bureau’s Survey of Business Owners (SBO) reported that there are nearly 10 million women-owned businesses in the U.S, and since 2002, the number of women-owned firms has increased by over 50 percent. Similarly, the Women-Owned Small Business (WOSB) Federal Contract Program continues to grow, and women-owned firms are reaping the benefits of $17.9 billion to WOSBs in fiscal year 2015. For the first time ever, the federal government met its 5 percent contracting goal with women-owned businesses.
While we have made tremendous progress, there is still work to be done. Part of improving access to federal markets for women entrepreneurs is improving the federal marketplace for all small businesses. While Congress passes the laws, agencies implement them through promulgating rules.
Women Impacting Public Policy (WIPP) works hard to remain informed on federal contracting changes, especially rules that govern contracting. NAWRB supports WIPP as a Collation Partner to submit comments on behalf of our collective members. By advocating together on behalf of WOSB’s with members of Congress, we can create change to give more women greater access to federal markets.
Below are some of the new developments you should know about when it comes to federal contracting. Most are good news – some are not.
“Women-owned businesses have
gained ground & we can see the
progress on a number of fronts.”
Get Familiar with “Similarly Situated Entities”
This spring, SBA released a new rule that will provide greater flexibility and encourage more subcontracting with women-owned firms. The rule updates the formula for calculating the percentage of allowable subcontracting to be based on total value of the contract, not only the labor costs. The new formula also allows for an exemption for amounts spent on “similarly situated entity” subcontractors.
A similarly situated entity is defined as a first tier subcontractor that has the same small business program status as the prime contractor and is small for the NAICS code assigned to the subcontract. This change empowers women-owned firms to pursue greater subcontracting, as prime contractors determine NAICS codes for subcontracts. For example, under a $10 million contract, a WOSB prime contractor can perform less than $5 million of the total cost (less than 50 percent), if it can subcontract to one or more WOSBs, and the total of the work performed by all WOSBs reaches at least $5 million (50 percent of the total cost).
While this change sounds like highly technical inside-the-beltway speak, Karen Primak, President and CEO of IPAK, sees real potential in the subcontracting rule changes. “This change makes us want to partner with other WOSBs so we can all obtain larger contracts. Plus, as a manufacturer of products that also provides strategic communications services, IPAK has more flexibility in the type of contracts we can pursue,” Primak states.
Empowering SBA’s Contract Watchdogs
Federal agencies often combine contracts to cut back on administrative costs. However, this harms not only small businesses, but the competitiveness of firms that work for the government. The job of protecting against this trend are Procurement Center Representatives (PCR) who serve as SBA’s small business foot soldiers. This rule ensures that small business advocates can effectively do their job by reviewing contracts that could be set-aside for small businesses, but have been combined into a requirement too large for a small business to complete. Takeaway: get to know PCRs.
“…There are many ways you can
become a part of a productive conversation
on issues that matter to business owners.”
Partnering Just got Easier
SBA encourages small businesses
to partner together (form joint ventures) to go after contacts that individual small businesses could not complete on their own. However, the formula SBA used to determine the appropriateness of this relationship led to much confusion among small firms. This new rule has a simpler formula that takes away the guesswork. The new rule specifies that if each partnering entity is small, they qualify for a joint venture.
More information about this rule can be found at https://federalregister.gov/a/2016-12494
GSA Wants You to Tell Them What They Bought
Yes, you read the title correctly. Earlier this summer, the General Services Administration (GSA) finalized a new reporting requirement for contractors that hold GSA contracts including Federal Supply Schedules (FSS) and Government-Wide Acquisition Contracts (GWACs). The new policy requires firms that sell to the government to report transaction or task order level data on goods and services. Effectively, companies will be informing GSA details of what other agencies have purchased through GSA.
The rule requires GSA contract holders to submit information including item descriptions, part numbers, quantities, and prices paid on a monthly basis. GSA plans to use this new data to analyze price data to improve the available data for federal purchases.
Courtney Fairchild, the President of Global Services, and head of the GSA Schedule Programs division, is concerned that GSA missed the mark, “While the transactional data requirement removes the Price Reductions Clause (PRC), it just replaces one burdensome reporting requirement with another. I am particularly concerned about how GSA plans to use this data to compare labor rates on service contracts—which can be like comparing apples and oranges.”
The move is part of a broader effort to streamline federal acquisition. GSA also plans on making some of this data publically available to allow contractors to better identify competitive pricing.
While this new requirement is not something women-owned firms sought out, the availability of competitive pricing could allow women-owned firms to be more agile in obtaining federal work.
More information about this rule can be found at https://federalregister.gov/a/2016-14728
Both the new SBA and GSA rules will have a direct impact on women-owned firms in the federal marketplace. While we reached the 5 percent contract goal for the first time this year, we need to be observant of changes to the marketplace to ensure we can build on our successes.
Success in the federal sector is largely dependent on knowing the rules better than anyone else. As an advocate for women owned firms, it is my job to make sure that we boil down massive agency rules to language every woman in the federal contracting space can understand. One of my mottos has been “know more than anyone else in the room.” With federal contracting, nothing could be more important.
While this article is devoted to federal contracting, there are rules and regulations governing all aspects of business. That’s why it is important to stay informed on developments on the federal, state and local levels. Join organizations that give you important information and consider taking steps to becoming an advocate. It can be as simple as a retweet on a policy position that matters to you or a “like” on Facebook. Simply reinforcing a message is advocacy. Consider writing an op-ed on an issue you care about, or attending a forum with elected officials in your area. Send out a legislative alert from an organization you trust—there are many ways you can become a part of a productive conversation on issues that matter to business owners.
Become an expert and become an advocate.