New SBA Initiative to Award Projects to Women

The United States Small Business Administration is ramping up its efforts to assure that more government contracts are awarded to women owned businesses as well as women-owned businesses where the women is economically disadvantaged.

In 1994, congress enacted legislation that required the United States Government to award at least 5% of its contracts to certified women-owned businesses. This law was championed by women’s advocates yet considered discrimination by others. Proponents of the law argue that it’s not discrimination because agents are only empowered to use their discretion to decrease the amount of competition.

This problem, along with other problems has caused the government to not yet comply with this mandate. Although the legislation was enacted, there are no penalties if the government falls short and there are no incentives for compliance. This has caused the federal government to only come as class as 3.8%.

Now, there are new efforts to see this legislation satisfied. The SBA is heading up the women-owned small business contract program which will allow certain contracts to be set aside for certified women owned businesses. As of February 4^th, 2011, businesses may apply to be a certified women owned business and the SBA hopes that by the fourth quarter of 2011 contracts utilizing this program will begin to be awarded.

In order to be a certified women owned business, 51% or more of the owners must be women who are actively participating in the day to day decision of the business. Additionally, all female owners must be United States citizens. Owners may self-certify or later, be certified by a third party government approved certifier.

Additionally, the same program allows contracts to be set aside for economically disadvantaged women owned businesses. Women qualify for this designation if their personal net worth is less than $750,000, she has made less than an average of $350,000 over the past 3 years and the total value of her assets are less than $6 million.

With the average yearly revenue of most designated small businesses being less than $250,000, women who own small businesses have a great chance of qualifying as an economically disadvantaged women owned small business. This may allow for small businesses all over the United States to qualify for government contracts that they were not able to get prior to this program.

If you’re a women who owns a small business, now is the time to make sure that your business is properly registered with your state and federal governments so you are eligible to bid on contracts once the program is fully active.