Jan 18, 2008

The controversial program which would allow federal agencies to set aside contracts for some women-owned small firms would help the government meet its annual contracting goals for the first time in over a decade, the head of the Small Business Administration said this week.

At a congressional hearing on Wednesday, SBA Administrator Steven Preston called the program an "additional tool" in efforts to award five percent of all federal contracting dollars to women-owned small businesses every year -- a goal the government has failed to achieve since being set by Congress in 1994. Preston said he doubts the goal will be met this year.

"I believe five percent will be achieved some day," Preston said. "I think that if you look at the growth over the last several years, it's been very strong."
Opponents of the program, which was unveiled earlier this month after seven years of review, say it will benefit only a fraction of women entrepreneurs, while shutting out others.

Under the proposed rules, federal agencies would be allowed to set aside contracts for women-owned business in a handful of industries identified as underserved in the federal procurement market. There are currently 313 industries listed in the procurement registry.   

Elizabeth Papez, the deputy assistant attorney general, said both the delays and restrictions were necessary to ensure the program complied with constitutional law.

"The program would require federal agencies to grant contracts to some businesses and deny them to others on the basis of gender," Papez said. As such, it had to withstand scrutiny under the equal protections component of the fifth amendment, she said.

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