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Four Steps Congress Should Take to Help WOSBs in the FY2021 NDAA

Posted By Elizabeth Sullivan, WIPP Advocacy Team, Wednesday, February 5, 2020
Updated: Tuesday, February 4, 2020

If you participate in the monthly WIPP Policy Update webinars, you will likely hear us reference the National Defense Authorization Act, or more lovingly known as the “NDAA.” As it remains one of the last “must pass” bills – due to the Constitutional requirement that Congress provides for a common defense – each year presents an opportunity to advocate for changes that will benefit women-owned businesses. So, here is what we think should be included this year: 

Elizabeth Sullivan
  1. Expand investment in women- and minority-owned companies.
    Currently, women-owned businesses receive around 2.8% of all venture dollars. Due to WIPP’s championship of this issue, Senators Marco Rubio (R-FL) and Maria Cantwell (D-WA) introduced the Women and Minority Equity Investment Act of 2019 (S. 1981), which would allow women-owned contracting firms to take investment by women-owned equity firms and still meet the “51% unconditionally owned and controlled” standard set by SBA to participate in the WOSB/EDWOSB program. Representative Robin Kelly (D-IL) introduced an identical bill in the House (H.R. 3633). The same barriers apply to minority-owned businesses. These bills allow minority-owned federal contracting firms to take investment by minority-owned equity firms.

    This legislation is groundbreaking on both sides of the equation. It opens up a path for investment in women-owned businesses who are government contractors, as well as strengthens women investors. Women in investment firms tell us that this change in the law would strengthen their ability to secure greater equity positions within their companies and women-owned companies looking for investment will be incentivized to seek out women-owned investment firms. The same holds true for minority investments under this legislation.

  2. Increase the share of contracts awarded to small businesses


    WIPP fought and won sole source authority for the WOSB program in 2015—gaining parity with other federal contracting programs. While the fight has changed in 2019, the drumbeat is the same: parity. Currently, the sole source dollar limits for WOSBs are $4 million and $6.5 million (manufacturing) over the life of the contract. While this might sound like a lot of money, in the $550 billion federal marketplace, $4 million over 5 years is small potatoes. We have also heard from WOSBs that even though agencies are interested in awarding sole source contracts to them, these dollar limits are too small.

    A shift in government buying calls for a shift in rules for sole source contracts. As government buying continues to trend toward buying through large vehicles and moving away from direct contracts, the ability for small companies to win sole source awards is more crucial than ever. Increasing the award amounts for sole source contracts is extremely beneficial to the small business contracting community, however, it is equally as important to streamline and simplify rules for awarding these contracts. It is not uncommon to hear from small contractors that are told over and over again by the federal workforce the same thing – awarding a sole source contract is too confusing and/or time consuming. 

    WIPP supported H.R. 190, which passed the House and gives all small businesses including WOSBs greater opportunities through sole source contracting. This bill raises the dollar amounts for sole source contracts to $4 million and $7 million to be awarded each year, instead of over the life of the contract. A proposal in the Senate would also raise these thresholds to $8 and $10 million each year. 

    With respect to simplification, WOSBs, HUBZones and SDVOSBs require that a contracting officer must justify through market research that not two or more offers at a reasonable price are expected. The contracting community has interpreted this as “you are the only company in the world that performs this work,” leading to exceedingly few sole source awards. While the missions of these programs are all different, one thing is crystal clear – putting these contracting programs on equal footing with respect to this rule would ease the burden for the federal government and the businesses trying to meet its agencies missions. 

  3. Give small businesses more runway.
    You may be thinking you have heard this one before. That’s because a significant WIPP-supported legislative victory was achieved in 2018, giving small firms more “runway” to transition out of the small business set aside program and into full and open competition. The law allows businesses to average revenues over 5 years rather than the previous three years for purposes of determining size standards. In fact, the law finally went into effect earlier this month. Despite the expanded time this gives many small contractors, there are some that are still left in the lurch – businesses whose work falls under employee-based NAICS

    These companies face the same challenges – bumping out of their size standards and struggling to compete with billion-dollar companies in the full and open marketplace. Therefore, increasing the length of determination for industries measured based on annual average employees would give small companies a little more runway to succeed when they become midsize companies. Using a five-year standard for all industries this would create parity for small businesses in every industry and promote sustainable growth of small businesses.
  4. Share best practices for contracting with small businesses.

    WOSBs continue to find that agencies are reluctant to use small business programs. Recognizing this challenge, WIPP worked with the Homeland Security and Governmental Affairs Committee to introduce The Promoting Rigorous and Innovative Cost Efficiencies for Federal Procurement and Acquisitions (PRICE) Act of 2019 (S. 3038), which addresses agency utilization of small businesses in the federal marketplace.

    Introduced by Senators Gary Peters (D-MI) and Joni Ernst (R-IA), this bipartisan bill requires the Director of the Office of Management and Budget (OMB) to convene the existing Chief Acquisition Officers Council (CAOC) to identify and disseminate best practices in non-defense small business contracting in the federal government. The PRICE Act would positively impact the way in which this valuable information is gathered and shared across the federal government, as well as provide increased opportunities for small businesses by educating the acquisition workforce on best practices for using small business programs. 


As we promote these changes, look for action alerts and other ways to engage from our team. Since it is an election year, there will be limited opportunity to advance this legislation – all the more reason why the NDAA is so important. These four changes would go a long way to help the government meet its 5% goal of contract awards to women-owned companies.

 

 

Tags:  Advocacy  Congress  legislation  regulatory 

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Knowing the Game Changers

Posted By Ann Sullivan, WIPP Chief Advocate, Wednesday, June 5, 2019

When I started representing WIPP in Washington some 17 years ago, Republican George W. Bush was in his second year as President and Senate Democrats held their majority by a very slim margin, while the House was controlled comfortably by Republicans. Women held 62 seats in the House and 13 seats in the Senate. No women chaired Congressional Committees and two women held Cabinet posts – Ann Veneman (Department of Agriculture) and Elaine Chao (Department of Transportation).

 

Things are a little different now— but maybe not as much as one might think. President Donald Trump is also a Republican, but this time the Senate is controlled by Republicans and Democrats control the House. But the game changer is women in power. As of January 2019, there are 106 women in the U.S. House of Representatives, including delegates, and 25 women in the Senate. Seven women head Congressional Committees—not to mention Speaker of the House Nancy Pelosi, who is second in the presidential line of succession, after the vice president.

AnnSullivan

 

 Even though there were relatively few women in Congress, in those early days there were a few game changers—Senator Kay Bailey Hutchison and Senator Olympia Snowe. Senator Hutchison was the head of the Republican Policy Committee in the Senate and included us in her monthly meetings, even though we were the only women in the room. Senator Snowe supported women business owners from her position on the Small Business Committee highlighting our issues.

Today, women-owned companies in the United States make a much bigger impact than in 2002. Women owned 6.5 million nonfarm U.S. businesses in 2002, employing 7.1 million people and generating $939.5 billion in business revenues. The latest numbers, by contrast, show women own 10 million firms, generating $1.4 trillion in receipts and employing 8.4 million.

 

WIPP was founded because women business owners were not well understood and did not have “a seat at the table.” Routinely left out of important agency and Congressional meetings, women pressed for a bigger presence. Making a difference in public policy was, and is to this day, WIPP’s mission. WIPP’s first example of making a big difference was pushing for a federal program which set aside federal contracts to women-owned companies. The women’s procurement program rallied women all over the country who believed that resistance to implement this law was just plain wrong. The game changer was locking down Presidential candidate support for implementation and when President Barack Obama won – it was one of the first things he did. Our strategy of presenting our platform at both conventions attended by powerful women in both parties and our members worked.

 

With WIPP’s legislative and regulatory victories, our narrative started changing. We no longer asked for a “seat at the table.” We had it. Rather, we were seated at the head of the table. Congressional Members, staff and committees consult our organization and its members for views and testimony on every aspect of policies affecting entrepreneurs. SBA became our partner through ChallengeHER, educating women nationwide on working with the private sector. Lastly, we became an integral part of the small business community and worked diligently to build a cohesive coalition with all other parts of the community – another game changer.

Changing the game has been in WIPP’s DNA since its inception. In June, there are two additional opportunities to lead. First, the Senate will hold a hearing on contracting issues with an eye to making the small business programs more effective. WIPP will testify, addressing the disappointing performance of the WOSB/EDWOSB program and efforts to increase federal contracts to women-owned businesses.


The second opportunity is the 2019 WIPP Business Leadership Conference. Participation, just like those early days, requires everyone’s attendance. WIPP visits to Capitol Hill has never been more important. Our visibility helps all women entrepreneurs across the country, even though they may not even be aware of our efforts. Our attention to issues such as business growth requires action and this conference provides opportunity for engagement with Congressional Members and staff.

 

Unlike the early days, we are not begging for a seat at the table. But now that we have a seat, it is our responsibility to do something with that seat. Get involved. Add your voice.


Tags:  Advocacy  Congress  leadership  WIPP Annual Conference 

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And...We’re Off to the Races

Posted By Elizabeth Sullivan, WIPP Advocacy Team, Tuesday, March 5, 2019

Senate Small Business Committee holds first hearing of the year with Small Business Administration Administrator Linda McMahon

 

The first Committee hearing in a new Congress sets the tone for the two years ahead—priorities, attitudes and bipartisanship (or lack thereof) are on display. The Senate Committee on Small Business and Entrepreneurship held their first hearing on February 13 by hearing from Small Business Administration (SBA) Administrator Linda McMahon.

Three areas of focus bubbled up during the hearing. Challenges facing women-owned small businesses, access to capital and issues around the workforce. 

Committee Members repeatedly mentioned challenges facing women-owned small businesses. Issues from access to capital to access to contracts were raised, signaling the Committee’s dedication to implementing policies that help WOSB’s succeed. Senator Joni Ernst (R-IA) raised two important questions for WOSB federal contractors. She addressed the delay in a report that was commissioned by Congress to the SBA to look government-wide at small business participation on multiple award contracts (MACs). This legislation was in direct response to WIPP’s report, Do Not Enter: Women Shut Out of U.S. Government’s Biggest Contracts (October 2016). The data is desperately needed to understand the landscape of small business contracting and create future policies that ensure fairness in the federal marketplace. 

Senator Ernst also raised the importance of ensuring small businesses are not shut out of opportunities as the government continues to buy through large contracts. The Administrator pointed to small business goals as a mechanism to hold agencies accountable. WIPP has partnered and participated in roundtables with other business organizations to determine the best path forward to safeguarding small businesses during this shift in acquisition policy. Furthermore, the Administrator shared that the SBA will be launching an innovative interactive digital platform to provide resources for women entrepreneurs, which they predict will expand their outreach capabilities from 150,000 to one million users. 

Another common thread throughout the Committee Member’s questions was access to capital. This is nothing new – women-owned firms still only get 4% of all commercial loan dollars and about 2% of venture capital funding. Additionally, only 18% of 7(a) loans in FY2017 went to women-owned firms and 27% to minority-owned firms. In response, the Administrator expressed the importance of SBA’s Capital Access programs and utilizing them to the fullest extent possible. Senator Duckworth pointed to the need for enhancement of SBA’s micro loan program as a possible solution. Furthermore, in her testimony, the Administrator highlighted that SBA was able to reduce loan processing times by half and provided $60 billion in loan guarantees. Despite this success, the Administrator committed to working to increase awareness of SBA loan offerings and resources for acquiring capital. 

Issues around workforce dominated many questions posed to the Administrator. This aligns with WIPP’s pillar-- rethinking workforce development. Questions centered around the plight of low-wage federal contractor employees and protection from future government shutdowns. Additionally, Senator Coons asked the Administrator what she saw as workforce challenges for small businesses as she traveled around the country last year. Administrator McMahon identified access to a skilled workforce and expressed SBA’s commitment to tackling this problem through its resources around the country.  

The Committee’s priorities align with several of WIPP’s six Policy Pillars. We look forward to continuing work with the Senate Small Business Committee and the SBA around these issues.

Tags:  Advocacy  Congress  hearings  SBA 

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more Calendar

7/8/2020
WIPP Policy Update - July 2020

9/9/2020
WIPP Policy Update - September 2020

10/14/2020
WIPP Policy Update - October 2020

11/11/2020
WIPP Policy Update - November 2020

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