Report: Women-Owned Small Businesses Shut Out of Federal Government’s Most Lucrative Contracts
Wednesday, October 5, 2016
A new report from WIPP finds clear evidence that women-owned small businesses have limited opportunities to win some of the federal government’s most sought-after contracts, despite a proven ability to deliver innovative goods and services across the globe.
The report also outlines steps policymakers can take to rectify the problem.
DO NOT ENTER: Women Shut Out of U.S. Government’s Biggest Contracts, analyzed 19 Multiple Award Contracts—the large umbrella contracts favored by many federal agencies, which create a pre-approved list of businesses that can supply unlimited goods or services during a specified period—with a total value of more than $253 billion.
It found that women business owners are at a disadvantage in these contracts. For instance, 12 of the contracts analyzed have requirements that guarantee certain socio-economic groups, such as service-disabled veterans and HUBZone small businesses, are allowed to compete for contracts. Only three of those 12 have such guarantees for women-owned firms.
Key findings in the report include:
- Most major contracts reserved awards for socio-economic groups but not for women-owned small businesses. Twelve of the contracts analyzed had such reserved awards, however 9—a full three quarters of the contracts—had no such reserved awards for women-owned small business owners.
- Some socio-economic groups have exclusive access to contracts worth billions of dollars, but women-owned small business owners do not, making it more difficult for contracting officers to use their services.
- The disparities in contracting already found by the U.S. Department of Commerce were reinforced, if not expanded by this analysis: that women-owned firms are already 21 percent less likely to win government contracts.
- However, once women-owned firms gain access to Multiple Award Contracts, they are winning 20 percent of the work. Considering women-owned firms only receive 5 percent of government spending overall, this is a vast increase and a strong indication they are providing high quality services.
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