Two main parts of the Small Business Administration’s proposed rule on setting aside contracts for woman-owned small businesses could snuff out any hope for the program, said one lawmaker.
For one, the rule would excessively reduce the number of industries in which woman-owned small businesses could receive set-aside contracts, wrote Rep. Nydia Velázquez (D-N.Y.), chairwoman of the Small Business Committee. Second, it would require each agency to prove its own discrimination in procurement, she said.
“This ensures that the already inadequate number of potential set-aside contracts will turn to zero in reality,” she wrote in her Feb. 22 letter.
Velázquez’s letter is a formal response to the proposed procurement rule, which SBA announced in December. The comment period ends Feb. 25, and the agency will then begin to review the comments. However, SBA said it does not talk about comments.
To keep any hope of agencies’ setting aside contracts, Velázquez wrote that SBA needs to delete the provision that would require agencies to review their procurement histories.
Requiring agencies to review their histories for discrimination would be fatal, she wrote. “It is unclear what penalties an agency may open itself up to for admitting past discrimination, but no agency is going to take that risk.”
By not accepting a disparity ratio to prove discrimination against women in federal contracting, agencies’ only option would be to seek out inequity within them, and Velázquez describes that as unrealistic and unappealing.
“Agencies have few incentives to compete these contracts as set-asides and will not place themselves in positions that are so legally precarious to gain additional women-owned small-business achievements in a small handful of industries,” she wrote, adding that the proposed rule is “a poison pill.”
In addition, Velázquez wrote, SBA should consider both contracting dollars and the number of contracts awarded to woman-owned small businesses, which would expand the number of industries available for the set-aside program.
Velázquez wrote that SBA’s rule regarding woman-owned small businesses takes the narrowest approach of numerous approaches that experts suggested to determine the industries in which women are under-represented. By using contracting dollars as its sole metric, SBA would exclude nearly 75 percent of industries that other viable measures find women under-represented in, she said.
The proposed rule would allow agencies to set aside contracts for the businesses in only four industries: engraving, kitchen-cabinet manufacturing, national security and international affairs, and motor-vehicle dealers.
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