WASHINGTON – U.S. government contracts to female-owned small businesses dropped for the second consecutive year, declining at a faster rate than awards to their male counterparts.
The women’s contracts slid 5.5 percent to about $16.4 billion in the fiscal year that ended Sept. 30 from $17.3 billion in fiscal 2011, according to data compiled by Bloomberg.
Awards to small firms owned by men fell 4.1 percent to $80.9 billion.
The gender gap may reflect stiffer competition over a shrinking pool of contract revenue as well as the bureaucratic burdens associated with a new effort to reserve awards for female-owned firms, according to former procurement officials and small business advocates.
Women-owned small businesses are at the very bottom of the food chain, said Jeanne Peck, chief executive officer of Nash Locke, an information technology company based in McLean, Va. They often have to fight for the scraps of subcontracts.
It may get worse for women, as they face difficulty winning a greater share of business in an era of federal spending cuts, said Robert Burton, acting administrator of the Office of Federal Procurement Policy under George W. Bush.
I don’t think you’re going to see any of these figures rise, Burton, now a partner at the law firm Venable in Washington, said in a phone interview. Historically, the government has never put a strong emphasis on women-owned small businesses.
The government set a goal in 1994 of awarding at least 5 percent of the total value of eligible contracts to female-owned businesses. It never has met that target. Women captured about 3.2 percent of the total, according to federal procurement data. The Small Business Administration hasn’t released official numbers using its own methodology, which excludes some contracts.
The gender disparity is particularly striking because the U.S. government is in its second year of a new program aimed at boosting awards to female-owned small businesses, said Ann Sullivan, head of government relations for Women Impacting Public Policy Inc., a Washington-based nonprofit organization that promotes women in business.
The effort, which allows agencies to reserve money for female-owned businesses, started in April 2011, 11 years after Congress ordered the SBA to create the program.
In the first full year of the program, about $72.5 million in contracts were set aside for female-owned small firms in fiscal 2012. That’s less than 0.1 percent of what Lockheed Martin, the No. 1 government contractor, won in the same period. It’s also less than the price of a single V-22 tilt-rotor aircraft, made by Boeing and Textron.
We’re not going to break the champagne out yet, said Sullivan, also president of Madison Services Group Inc., a government relations firm in Washington. Sullivan worked with Congress, the SBA and the White House to help create the set- aside program.
Agencies’ contracting officers may be reluctant to use the program because they must take on the burden of verifying that the businesses are legitimate, said Margot Dorfman, chief executive officer of the Washington-based U.S. Women’s Chamber of Commerce.
I’m not sure I blame them, Dorfman said in a phone interview. There’s no incentive to encourage them to use the program.
John Shoraka, the SBA’s associate administrator for government contracting and business development, didn’t provide a comment on the decline in small business contracts to women.
We will continue education, outreach and recruitment of female-owned small businesses to the federal procurement process, he said in an email.
The defense authorization bill signed into law this month removed caps on contracts awarded under the program, a development that Shoraka called another win for women-owned small businesses.
Previously, the ceilings were $4 million for services and $6.5 million for manufacturing. Last year, only one company received a contract valued at more than $3 million under the program.