By Gina Blitstein
There is some huge help to women-owned small businesses on the horizon, courtesy of the Small Business Administration. Come February 1, 2011, their Women’s Procurement Program – also known as the 8(m) program - will take effect, impacting the 79,800 women-owned small businesses registered to do business with the federal government.
The goal of this program is to provide a boost to the federal government’s efforts to finally reach its procurement goal to award 5% of all contracts to women-owned small businesses (WOSBs). To put that percentage into a dollar perspective, that 5% represents $30 billion; in 2009, while significant, only $16 billion of the earmarked amount was awarded to WOSBs.
What does the SBA’s Women’s Procurement Program mean for women-owned businesses? Lourdes Martin-Rosa has over two decades of experience in helping small businesses navigate the government procurement landscape and serves as American Express OPEN Advisor on Government Contracting. Lourdes says the program will permit an increase in contracting opportunities and fair competition allowing WOSBs to capture the full $30 billion of the federal procurement pie. She goes on to say that women can expect some significant advantages once the program takes effect.
Specifically, what advantages can women expect come February 2011 when the program takes effect? Lourdes reports that when the program takes effect in early February, it will allocate contracts to WOSBs within 83 NAICS (North American Industry Classification System) codes, giving WOSBs within these industries a significant edge in government contracting.
They also anticipate a “trickle-down effect” that will benefit both WOSBs and other businesses as well: As the federal government begins seeking WOSBs to fulfill their federal procurement goal, WOSBs will become an attractive commodity for teaming and subcontracting opportunities with other non-WOSB firms.
Lourdes offers the following example of how the program will provide greater opportunities for the industry-mates of WOSBs: If a large Advertising Agency (Advertising, Public Relations and Marketing are among the 83 NAICS codes) wanted to tap into the federal procurement market for the first time, they could team with a WOSB within the same industry. Both companies would share the contracting opportunity creating a win - win situation for everyone.
In this example, Lourdes points out, the WOSB wins because they have the backing and guidance of a large corporation. The federal agency wins because they’ve met their WOSB procurement goal and have a larger firm mentoring the smaller firm. Since in most NAICS categories, the WOSB must self perform at least 51% of the contract’s value, the prime contractor is the WOSB, so she will be handling all of the finances and submitting payments to the larger firm.
Why is government contracting a significant issue to WOSBs? Lourdes does the math for us, explaining that, were the $30 billion earmarked for contracting with WOSBs divided equally among the 79,800 registered businesses, each business would receive approximately $380,000 in contracting opportunities. That’s a pretty convincing reason to take note!
Here are two important reasons you may want to consider government contracting as a source of income for your business:
- The federal government is a solid business partner, for any company wanting to secure a stable long-term customer. The chances of the federal government bouncing a check, paying late and/or not paying at all are very unlikely.
- Most government contracts are one year contracts with 4 year options to renew, meaning woman-owned businesses will have the opportunity to win a 5-year contract. In today’s economy, a 5-year contract represents stability, constant cash flow and an opportunity to plan and grow for any small business.
Clearly, the opportunities for successful government contracting as a women-owned small business have never been brighter. Once the Women’s Procurement Program is launched on February 1, 2011, contracting officers will be able to set aside specific federal contract requirements to be competed only among WOSBs, opening the door to new contracting opportunities.
Lourdes’ advice: “The business opportunities are enormous and WOSBs can not let this one pass them by!”
Are you planning to take advantage of the Women’s Procurement Program to claim your piece of the federal procurement pie?