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

Time to Raise a Ruckus

As I write this, the US House Small Business Committee is convening a “foregone conclusion” hearing focusing on the duplication of entrepreneurial development services at the SBA. Why is it a foregone conclusion? They’ve already sent in their Views and Estimates letter to the House Budget Committee – not only saying that there is duplication of business development services but recommending the elimination of funding for the nation’s 110 women’s business centers (WBCs) in FY2012. And they’ve denied any women’s business center leader or the Association of Women’s Business Centers the opportunity to testify in defense of the program at this hearing. We’ve tried, and sent in letters and research findings refuting their contention, to no avail.

Yes, the economy is still sputtering. Yes, the budget deficit is a serious issue that must be addressed. And, yes, there is most certainly some duplication of services in the economic development efforts of the federal government (as mentioned in the recent GAO report). But do we really think, at the very time we want to get small businesses booming again, that this is the time to cut programs that provide direct support to business creation and job growth? And do we really think that a “one size fits all” approach to business development will work when business trends in general are moving toward “mass customization” and the “mass market of one“?

We can’t sit idly by and allow budget-cutting fervor to outweigh the need for a variety of approaches to economic development assistance. Here’s why Chairman Graves is wrong:

  • WBCs have a proven track record of results: In an analysis of WBC program outcomes conducted by the National Women’s Business Council (see this link for a research summary), it was found that the federal investment in WBCs yielded a 14: return on investment in terms of business revenues added to the economy.
  • The services provided by WBCs are not duplicative: This same study found that there was no difference in program outcomes of WBCs based on their proximity to an SDBC – the clients they serve and support provided are different and number of firms launched or businesses created are the same. Thus, they are not duplicative.
  • WBCs differ from SBDCs and SCORE in some very important ways: 1) WBCs provide longer-term, more relational support, whereas SBDCs and SCORE are more likely to provide one-time, transactional support;
    2) WBCs provide a variety of services (counseling, training, peer groups, mentoring), whereas SBDCs and SCORE are more likely to provide 1 solution to their clients; and
    3) given that the are locally-designed and embedded within local economic development groups, WBC support is more customized and tailored to the needs of a particular community, whereas SBDCs and SCORE are more likely to look similar regardless of location.

And here’s where Congressman Graves and the GAO are right:

  • Women business owners are “the largest growing class of small business owners in the country.” (Views and Estimates letter, p. 9) Quite true, so why, then, eliminate one of only three line-itemed programs for women business owners in the entire Federal budget?
  • “Without quality data on program outcomes, these agencies lack key information that could help them better manage their programs. ” (GAO report, p. 45). Absolutely right, we need better information on outcomes and impact. We are confident that if there were better information, the value of WBCs would be clearer. An invaluable program is definitely being hampered by incomplete data.

What can you do? Write to your members of Congress – especially if they are a member of either the House or Senate Small Business committees, and tell them that the women’s business center program has been invaluable for women’s enterprise creation, and that this is no time to eliminate a program that has a proven economic benefit. All the ammunition you need is contained in the points above (plus your own personal story).

Fellow womenablers, it’s time to raise a ruckus. And here’s one more piece of ammunition: The Performance, Progress and Promise of Women’s Business Centers in the United States, published by Womenable in 2006.

“Between the great things we cannot do
and the small things we will not do,
the danger is that we shall do nothing.”
~ Adolph Monod

~ Julie R. Weeks, President and CEO of Womenable and author of the Womenabler blog, is also the Chair of the Board of the Association of Women’s Business Centers