Growing into New Markets: The Power of Procurement

After a decades-long battle, a Women-Owned Small Business Federal Contract Program is now in place at the US Small Business Administration. Truth be told, the 10-year fight to get the law calling for this program implemented was just the tip of the iceberg. Way back when women business owners and their organizations (NAWBO and AWED (now defunct) chief among them) fought for the passage of the Women’s Business Ownership Act of 1988, they tried to get language inserted referring to access to government contracting programs, but were told that it would sink the entire bill if it were to be inserted – so it was left out.

In the mid 1990’s, then, a 5% goal was established, requesting but not requiring federal agencies to target at least 5% of their spending with women-owned small businesses. Well, as we womenablers know, that goal has never been reached on a government-wide basis – due in large part to the “big kahuna” status of Defense Department spending. In actuality, as of fiscal year 2008 year, 14 federal agencies spent more than 5% with women-owned firms. (Read more about it in this fact sheet from the National Women’s Business Council.) Kudos to them!

And kudos to everyone who kept the pressure on, especially during the stonewalling years of the Bush Administration, to see the day come – February 4, 2011 – when the program was finally put in place. It’s still early days, as they say, but hundreds of women business owners and other womenablers gathered on March 2 to raise a glass to the program’s success. Thanks, WIPP, for throwing the party!

Anyway, we’re writing today in the wake of these positive developments to share some information that was gathered – by Womenable for American Express OPEN’s Victory in Procurement for Small Business initiative – to better understand how women and men small business owners are faring in the federal procurement marketplace. There are three reports publicly available that have come from this research:

What do these reports show – especially about women business owners? Here are some key findings:

  • It takes time and money to get into the federal procurement marketplace – 20 months of trying for the first contract win and an average $86,000 annual investment – but it took women business owners no longer, and a somewhat lower annual investment, to be successful;
  • Once they have become active federal contractors, women match their peers with respect to their business’ size and the total value of the contracts they’ve won to date;
  • However, both women and minority business owners are much more likely to be left at the starting gate. While 28% of active contractors are women and 24% are firms owned by persons of color (close to the national average among all firms), fully 39% of inactive contractors (defined as firms that are registered on CCR but that have either never performed or are not currently performing on a federal contract) are women and 48% are minorities.

We hope you’ll take a few minutes and read through one or all of these reports – and take advantage of the programs that are out there to help you break into the federal procurement marketplace, including:

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