Women-Owned Firms Making Their Mark in Federal Procurement

As a firm grows and seeks new markets for its products and services, public sector clients can prove to be a winning avenue for expansion. That’s what many women business owners in the U.S. are finding, according to a series of recent surveys conducted among active small business contractors.

Puzzling Elements.The groundbreaking research – conducted for American Express OPEN’s Open for Government Contracts initiative by Womenable – queried business owners who are registered on the U.S. federal government’s System for Award Management (SAM) and who had performed on a contract within the previous five years. Surveys were conducted in 2010, 2011 and 2013 and – in addition to overall analysis among all small firms – special reports focusing on trends among women-owned firms were published.

According to these reports (which are listed and hyperlinked below), women-owned firms that are involved in contracting are every bit as accomplished in terms of employment and revenue size as their male counterparts. Specifically, over the past three surveys, we have learned that:

  • It takes time and money: In 2012, active small business contractors invested an average of $128,628 in time and money during the course of the year seeking federal procurement opportunities. This includes the time spent attending meetings and seminars, investigating opportunities online or in person, and preparing and submitting bids. Women business owners invested somewhat less – $112,112 – but were every bit as successful. On average, it took women-owned firms an average of 20 months and 4.3 bids before winning their first contract; very similar to the 25 months and 5 bids that it took men-owned firms.
  • Perseverance pays off: Once small firms are actively engaged in federal contracting, women-owned firms are every bit as accomplished in terms of business size as are their male colleagues. While in general, among all firms, women-owned firms are smaller than average, among active small business contractors, 31% of women and 30% of men employ 50 or more workers in their firms, and 42% and 48%, respectively, generate $1 million or more in revenue. Selling to the federal government can lead to substantial business growth!
  • Policies matter: Back in 1994, the federal government established a 5% spending goal for federal agencies to encourage contracting with women-owned small businesses. That goal has never been met, but in fiscal year 2012 it reached 4%. There’s hope that the goal will finally be reached by virtue of a recently-established WOSB Procurement Program, which gives federal agency procurement personnel more flexibility in letting out contracts for bids (including lifting prior caps on the value of contracts that could be awarded to women-owned firms). From the perspective of active women business owner contractors, the program is starting to find its footing. Back in the 2011 survey, when the program was just launched, just over one-third (37%) of women surveyed said they found the program useful in seeking federal contracting opportunities. Now, in the 2013 survey, the view has improved considerably – fully 61% find the program useful, including 28% who find it very or extremely useful. With this playing field-leveling policy, more and more women are finding federal procurement success.

Click on the links below to download and read these reports. You may also wish to read more about the American Express OPEN/SBA/WIPP ChallengeHer program or learn more about the status of the newly-strengthened Women-Owned Small Business Procurement program. According to recent procurement statistics, even though the overall 23% small business procurement goal was recently met, the 5% goal for federal spending with women-owned small businesses was not – nor has it ever – been met. A sure sign, if there ever was one, that more needs to be done to increase access for women-owned small businesses to this important avenue for growth.

2013 – Women-Owned Small Businesses in Federal Procurement: Building Momentum, Reaping Rewards

2011 – Women and Minority Small Business Contractors: Divergent Paths for Equal Success

2010 – Women and Minority Federal Small Business Contractors: Greater Challenges, Deeper Motivations, Different Strategies, and Equal Success

NWBC Publishes 2013 Annual Report

The National Women’s Business Council, a bipartisan women’s enterprise advisory body in the US established by the Women’s Business Ownership Act of 1988, has published their 2013 annual report to the President, US Congress, and the US Small Business Administration.
NWBC-2013AnnualReport-cover
The colorful 40-page report contains nine policy/program recommendations grouped within four pillars (Guess which one is our favorite!):

  1. Access to Capital
  2. Access to Markets
  3. Job Creation and Growth
  4. Data

Among the recommendations are two, in our view, worth calling out and commenting upon:

  • Implement an annual Survey of Business Owners model-based program.” The SBO is the Census Bureau’s quinquennial business census, which provides we womenablers with a mother-lode of invaluable statistics on the number and growth of women-owned firms. However, being quinquennial means that the data are only published every five years, and business moves much faster than that. Of course, Womenable and American Express OPEN have published an annual State of Women-Owned Businesses reports that provide estimates in between SBO reports (see a listing of these reports HERE), but more frequent government-published data would be extraordinarily useful. However, such an expansion of SBO is also very unlikely, given the expense required and the current state of the US budget. And yet, to paraphrase Robert Browning,

    “Ah, but a woman’s reach should exceed her grasp,
    Or what’s a heaven for?”

  • Increase the number of women-owned or -led firms participating in incubators and accelerators and consider establishing an accelerator and incubator program focused on women-owned or -led firms.” Womenable has long pointed out the need for paying much more attention to issues of growth and development of existing women-owned enterprises. This is another timely recommendation, but the NWBC missed an important opportunity to call out a key partnership in this endeavor: the Nation’s 100+ women’s business centers. Rather than trying to make existing incubators and business accelerators more female-friendly (good luck with that), we should expand the remit of and financial support for WBCs to offer growth-focused programming. Indeed, most of them already do – but they are doing so outside the “marching orders” provided to them by the SBA and Congress, which essentially puts WBCs in velvet handcuffs and says that all government funds can only go toward serving nascent firms and socially and economically disadvantaged populations.

The Council has done a good job of keeping the momentum going over a period – over the past three or more years, really – of staff and leadership turnover. There’s a new Chair in place, but no Executive Director at the moment. Despite that, they’ve published a report that’s well worth reading, and using for womenabling advocacy efforts in the United States and beyond. Keep up the good work, NWBC!

WOSBs Getting Their Contracting Groove On?

How are women business owners doing in the federal procurement marketplace? According to a new report, authored by Womenable for the American Express OPEN for Government Contracts program, the answer is “increasingly well.” Even though, on average, women business owners who are active federal contractors have been seeking contracts for less time than their male counterparts, they are every bit as successful in terms of overall revenue and employment, and are rapidly catching up in terms of federal contract award value.

pot_o_goldOne reason for their growing success may be the increased traction of the Women-Owned Small Business (WOSB) Procurement Program, established in 2011. Two years ago, just over one-third (37%) of women business owners who had self-certified as a woman-owned small business (WOSB) found that designation to be useful in seeking contracting opportunities. Now, a 67% majority of WOSBs find the designation useful, including 28% who find it very or extremely useful.

Other key findings from the report include:

  • In each of the three American Express OPEN for Government Contracts surveys, women-owned firms have been found to invest less time and money researching opportunities and submitting proposals for federal contracts. In 2012, women-owned firms spent $112,112 pursuing federal contracts, compared to the $137,040 investment made by men-owned firms;
  • The average investment made by small businesses in seeking federal contracts has, however, risen dramatically over the past three years, with a greater than average increase seen among women-owned firms (up 59% compared to a 49% increase among all small contractors);
  • While women invest less time and money seeking federal contracts, their prime and sub-contracting bidding activity and success rates match the average for all active small firm contractors; and
  • On average, it takes a small business new to the federal procurement marketplace about two years (24 months) and 4.7 unsuccessful bids before winning that all-important first contract. It took women business owners less time and effort (20 months and 4.3 unsuccessful bids) to land their first contract compared to their male counterparts (25 months and 5.0 unsuccessful bids).

So, while selling goods and services to federal agencies may not be the “pot of gold at the end of the rainbow,” for many small businesses – including an increasing number owned by women – federal procurement is an important avenue to business growth.

You may download and read the report, “Women-Owned Small Businesses in Federal Procurement: Building Momentum, Reaping Rewards,” at the highlighted link. This report is the second in a series of four reports. The first, “Trends in Federal Contracting for Small Businesses,” may also be downloaded and read. The other two reports, the next focused on trends in federal contracting among minority business owners and the final, taking a look at how small business owners are utilizing subcontracting and teaming to achieve procurement success, are forthcoming.

Womenable Testifies at U.S. Senate Hearing

Womenable President and CEO Julie R. Weeks testified at a recent hearing of the Senate Committee on Small Business and Entrepreneurship, entitled “Creating Jobs and Growing the Economy: Legislative Proposals to Strengthen the Entrepreneurial Ecosystem.” Weeks was one of eight witnesses invited to address the committee. Other witnesses included officials from the U.S. Small Business Administration, a representative from the National Federation of Independent Business chapter in Maine, an official from the Granite State Economic Development Corporation, and business owners. Weeks spoke as an expert in women’s enterprise development, and as chair of the Association of Women’s Business Centers.JulieWeekstestimony_sm

The hearing, held on November 29th, focused on actions that the Committee could take now and early in the next Congress to spur small business growth and job creation. Weeks’ testimony, which can be downloaded and read in its entirety HERE (PDF file with active source links) or HERE (HTML on the SBC website), offered three specific policy recommendations:

  • Federal Procurement and WOSBs: Eliminate the monetary cap which is currently limiting the procurement opportunities that can be directed toward women-owned small businesses, and enable agency procurement officials to restrict competition for WOSBs;
  • Women’s Business Centers: Ensure that the SBA, when measuring and analyzing the performance of the WBC program, includes all of the support provided by WBCs, not just one-on-one counseling; and
  • The Census Bureau’s SBO Program: Ensure the continued funding of the quinquennial Survey of Business Owners program, and direct the Census Bureau to investigate growth continuum issues such as the emergence of “women-led” firms, and the feasibility of determining the gender ownership status of non-profit businesses.

The hearing was also significant in that it was the last Senate Small Business Committee hearing to be co-lead by retiring Senator Olympia Snowe – who has been a champion not only of small business development in general but of women’s enterprise development in particular during her storied 35-year Congressional career. Weeks concluded her testimony with a tribute to Snowe, saying,Weeks_Snowe_sm

“Finally, if I might be so presumptuous to speak on behalf of the entire women’s enterprise development community, I would like to recognize that, ever since she came to the U.S. Congress in 1978, Senator Olympia Snowe has been a vocal supporter and forceful advocate for women’s entrepreneurship issues without equal in the U.S. Congress. Her support and thought leadership on behalf of the women’s business center program, on federal procurement issues, on SBA entrepreneurial development coordination and impact evaluation, on the National Women’s Business Council; her inclusiveness in calling advocates to the table to discuss challenges and solutions; and the collegial way she has led the Senate Committee on Small Business and Entrepreneurship as both Chair and Ranking Member is unparalleled and is a shining example of the best in national politics and policymaking. Her voice and leadership will be sorely missed by all of us.”

All in attendance gave Senator Snowe a standing ovation near the start of the hearing.

A press release issued by the Committee can be read HERE, and video from the 2+ hour hearing can be viewed on the Senate SBC video archive or on C-SPAN.org. (Weeks was the last of the panelists to testify.)

Progress for Women in Federal Procurement? Not So Much …

As we womenablers know, after a very long battle, a  Women-Owned Small Business Procurement program was launched by the US Small Business Administration in February 2011. How’s that program faring nearly 18 months later? Well…

First of all, there’s been no official commentary or updates from the SBA since the program was launched. Secondly, a recent analysis in an article on Bloomberg.com finds that just $21 million has been awarded through the new program – less than the cost of one unmanned drone. WIPP Lobbyist Ann Sullivan, quoted in the article, puts it well:

“We worked for 11 years to try and get this thing in place. Is the program working? Well, looking at those numbers, the answer is no, it’s not working.”

OK, womenablers, time to put the pressure on the SBA – and on all federal agency purchasing offices – to start utilizing this program!

For advocacy fodder, you might want to download and read these two reports looking at the performance of women-owned firms in the federal contracting arena:

These research reports show that once women-owned firms start winning federal contracts, their success and business size matches their male peers – proving they are up to the task and that access to government markets can level the playing field of business achievement.