Omnibus provision suspends controversial women's procurement regulation

The omnibus bill signed into law by the president on Wednesday included a provision barring the Small Business Administration from using any of its funds to implement a controversial regulation that narrowly restricts the women's procurement program.

The provision puts the brakes on the regulation, still under review, which confines set-asides for female-owned small businesses to just a few industries in which women are considered to be underrepresented. Women's groups and lawmakers were infuriated by the methodology used to show underrepresentation, which they said was excessively narrow.

Congress created the women's procurement program in 2000, but it has been mired in rule-making ever since. The law mandates a 5 percent contracting goal for women-owned small business, but agencies continue to fall short of that target.

"Today, the Bush administration's absurd proposal to create more red tape and agency roadblocks for female entrepreneurs is stopped," said Rep. Nydia Velázquez, D-N.Y., chairwoman of the House Small Business Committee. "Had the Bush administration been allowed to go forward with this plan, it would have essentially gutted the women's procurement program and made it harder for female entrepreneurs to succeed."

SBA spokesman Michael Stamler said the women's procurement program is a priority for the administration and the agency will be reexamining the entire existing rule. There is no timeframe for this review, however, because SBA is still in transition, he said.

"This is just not the type of thing you jump into without an administrator in place," said Stamler.

Margot Dorfman, chief executive officer of the Women's Chamber of Commerce, said SBA's response to this omnibus provision will be crucial. She is urging the agency to implement an alternative methodology for proving underrepresentation that would allow the program to be applied to 87 percent of industries.

"We're really hoping we don't have to recreate the wheel," Dorfman said. "We are really focused on finding a way just to simply pull out that one problematic clause on discrimination and have it move forward with the 87 percent of industries feasible per the studies already performed."

Dorfman is well-aware that if SBA chooses to conduct additional underrepresentation studies, the program likely will be delayed for months. Both Velázquez and Dorfman say the ongoing stimulus efforts make it more important than ever to avoid delays and administer the program in a way that expands federal contracting opportunities for women-owned businesses.

"With the Recovery Act, the number of contracts coming down through agencies has been a great number, so we're really concerned if we don't get this law up and running and implemented, women-owned firms will be losing billions," Dorfman said. "They have been losing $5.6 billion annually, and with the additional contracts coming down, the amount now could far exceed that."

Velázquez said the Small Business Committee will be working hard to ensure the program is implemented so "female entrepreneurs have a fair chance to compete for the public works projects that will rebuild our economy."