The government can use its purchasing power to grow contracting opportunities for women-owned businesses.
With the October release of the Biden administration’s National Strategy on Gender Equality, the president pledged to invest in women’s entrepreneurship and, "more equitably include women-owned businesses in supply chains and contracting." We can start by using the government’s purchasing power to grow digital services contracting opportunities for women-owned businesses.
Goals are not being met
Federal “set-asides” were established to put small business owners from disadvantaged backgrounds on more equitable footing when pursuing government contracts. Women comprise 43 percent of the federal workforce and roughly 57 percent of the U.S. civilian workforce, but the Small Business Administration goal for women-owned businesses awards remains at a mere 5 percent. Even that modest goal is rarely met. According to the SBA’s small business procurement scorecard, we have achieved it only two times in the scorecard’s sixteen year history, in fiscal years 2015 and 2019.
The numbers are equally bleak when you look at the digital services space. From fiscal year 2018 through the present, USASpending.gov data shows a total of 25,745 awards set-aside for small businesses, about 37 percent of all digital services contract awards. However, only 569, or less than 1 percent, were set aside for Women Owned Small Businesses (WOSBs) or Economically Disadvantaged Women Owned Small Businesses (EDOWSBs).
Why it matters
Last month at the Grace Hopper Celebration of Women in Computing conference, General Services Administrator Robin Carahan rallied more women technologists to public service, noting that women currently make up less than one-quarter of all federal technologists. We need to apply that same lens to the scarcity of opportunity for women in digital services contracting.
Business leaders and technologists influence technology products with their personal backgrounds and experiences. Government services must be designed by teams that bring a wealth of perspectives to the fore. Diverse teams will create services and products that better serve the needs of all users.
An expansion of opportunity for women-owned businesses reflects a commitment to gender diversity in technology leadership and across the workforce. Growth in women’s entrepreneurship moves the needle toward the inclusion of more traditionally marginalized communities.
How we fix it
As a starting point, we need to increase the SBA’s government-wide targets for women-owned small business awards. In June, the Biden administration promised to grow federal contracting with small disadvantaged businesses by 50 percent. Any new targets must include an expansion for women-owned small businesses. Five percent is not enough -- and neither is 10 percent.
Targets are intended to be the minimum threshold for compliance. Agencies are required to award at least 5 percent of the total value of all prime contracts to women-owned businesses, but we must aim higher. Some agencies already exceed their WOSB targets, proving that it can be done. We should study those achievements and scale them government-wide. In addition, we should apply more resources toward developing dual or intersectional set-asides for woman and minority owned businesses.
Second, the administration should review the requirements for EDWOSB certification. Spousal sign-off is still required. Let’s take a hard look at that rhetoric, the rationale behind it and the message it sends to women entrepreneurs.
Third, Congress and the administration should examine the differences in sole source award authority. The application requirements for EDWOSB and 8(a) certification are similarly stringent, but sole source authority rules make the latter far easier to award. (Contract officers can only award a sole source contract to a WOSB if there is no “reasonable expectation” that more than one WOSB would bid on the work. There is no such requirement for 8(a)s.) Correcting this disparity is an easy opportunity for procurement innovation.
Fourth, let’s improve training for contact officers. A 2019 GAO Report cited a lack of knowledge about WOSB and EDWOSB authority as an obstacle to adoption. To help bridge the gap, SBA co-sponsors ChallengeHER, but much of that content is geared toward the WOSBs themselves, not the contact officers who must create the set-aside. Women-owned businesses should not be expected to educate the government on how their set-aside can be used.
Let's act now
During the pandemic, women’s' workforce participation has decreased at a faster rate than men, down 9%, while men’s is down 7.8% compared to February 2020. According to the Federal Reserve Bank of New York, women and especially women of color were far more likely to lose their jobs or be forced out of the workforce during the pandemic recession.
We need to reverse this trend and follow through on the administration’s commitments to increase economic opportunity for women-owned businesses and reduce inequity. Digital services program officers have been leaders in procurement innovation. They can be leaders for women as well.