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

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Federal Contracts Requiring Larger Investment for Small Businesses

A new survey conducted among small business owners who are active federal government contractors finds that their investment of time and money seeking contracting opportunities has increased by 21% over the past year, as federal contract spending has declined 12%.

This and other facts come from Trends in Federal Contracting for Small Businesses, a new report authored by Womenable from a survey conducted by us for American Express OPEN’s Victory in Procurement for Small Business program.

The survey was conducted online in October 2011 among small business owners who are registered on the Central Contractor Registry (CCR) and are either currently performing on a federal contract (prime or subcontractor) or who have done so within the past five years.

Other findings from this first of four reports drawn from the survey include:

  • On average, active contractors invested $103,827 in time and money last year seeking federal contracts, up from $86,124 in 2009;
  • Larger firms invest more seeking contracting opportunities, but so do firms owned by persons of color. Women invest somewhat less time and money seeking federal contracting opportunities than do their male counterparts;
  • On average, small firms submitted an average of 4.4 bids before they won their very first federal contract – the lesson being, if at first you don’t succeed, try, try, and try again;
  • Over the long term, experience pays off. Average bidding success rates – 38% overall – are significantly higher among firms with 10+ years of contracting experience compared to those firms with three years or less contracting experience.

The other three reports will focus on special trends among women and minority business owners, how strategies and outcomes change with level of procurement experience, and what lessons can be learned from firms that focus on subcontracting as a procurement strategy.

To learn more and download a copy of the report, read this Womenable-authored blogpost on openforum.com. Look for the next report from this survey in about a month; it will focus on the key findings among women and minority business owners.