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This guest post by Rose Wang of Binary Group introduces some of the issues facing women-owned businesses in federal contracting.

This is a guest post by Rose Wang, Founder and CEO, Binary Group

The business owner landscape has changed dramatically over the last twenty years. Women are creating more businesses, employing more workers and generating more revenue than ever, as demonstrated by these statistics:

  • Women-owned businesses are growing. It is estimated there are over 8.6 million women-owned businesses in the United States The growth in the number, revenues and employment of women-owned firms over the past 16 years exceeds the growth rates of all but the very largest, publicly traded corporations in the country.1
  • Women are hiring more employees. When looking specifically at the 2007-2013 period, it is estimated the net increase of 5.3 million jobs economy-wide has come almost entirely from very large public corporations and women-owned firms.1
  • Women-owned firms continue to diversify into all industries. Women are starting more businesses in areas outside of education and other services, including technology, engineering, and health care.1
  • Women have a major impact on the economy. The economic impact of women-owned businesses in the United States is $3 trillion annually, as well as job creation or maintenance of more than 23 million jobs – 16% of all US jobs.2

Many of these women-owned businesses provide services, products and consulting to the Federal Government. The Federal Government established a 5% goal for procurement with women-owned small businesses (roughly at 3% now). In early 2013, a major improvement to the program was achieved. An amendment to the FY13 National Defense Authorization Act removed the dollar award caps on the women-owned small business (WOSB) set-aside program. With these policy changes and the current administration’s focus on creating new jobs and economic growth, one would think that agencies would be trying to meet or exceed the WOSB 5% goal.

Federal Government report card

Yet according to the National Women’s Business Council (NWBC), preliminary findings of a research project on the impacts of the newly implemented WOSB program3, women-owned small businesses are not getting their share of WOSB set-aside contract money. In fact, among the top five federal government agencies to use set-aside contract mechanisms (DoD, GSA, VA, DoJ, and DoI), WOSB set-aside contracts are at an average of 0.12% of the total set-aside contracts awarded since FY2011!

The Women-Owned Small Business (WOSB) procurement program was signed into law in 2000 and implemented by SBA in 2011. Why is this program so important? It’s all about job creation. By 2018, the Bureau of Labor Statistics projects that small businesses will create 9.7 million new jobs, with approximately 5 million to 5.5 million of those being created by women-owned businesses. This represents over half of the new jobs in the small business sector and one third of the total new jobs that will be created nationwide over the next eight years.4

In part two of this post, Rose will offer her solution for making sure that women-owned businesses get the work that has been set aside for them, so they can keep making these positive contributions to the U.S. economy. Stay tuned!

1 According to American Express OPEN’s 2013 State of Women-Owned Businesses Report: A Summary of Important Trends, 1997-2013.

2 The Center for Women’s Business Research 2009 Study.

The full NWBC report will be released in June 2013 with much greater detail about procurement practices across the Federal government.

4 The Guardian Life Small Business Research Institute 2010.

This post originally appeared on the Binary Group blog at http://www.binarygroup.com/blog/article/a_momentous_step_to_shrink_the_contracting_gender_gap, and was adapted and reprinted with permission.

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