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This New Rule Means More Government Contracts for Women

The government just eliminated a cap on contracts for women-owned small businesses. Here's what the change could mean for your business.
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If you run a woman-owned small business and you want to get government contracts, things just got a little bit better for you.

Sequester or no sequester, the U.S. government spends a ton of money. Regardless of how you might feel about that politically, it means opportunity for small businesses. A small change to the federal rules that just went into effect that means more of those opportunities could go to women-owned small businesses.

First, the bad news, which Inc's Liyan Chen wrote about in January. Women-owned small businesses landed about $16.4 billion in federal contracts last year, down 5.5 percent from $17.3 billion in fiscal 2011. By the way, men-owned firms also saw a drop (by 4.1 percent, to $80.9 billion).

But the good news now for women-owned small businesses is that the government now has authority to set aside more contracts for women. Previously, contracts had to be comparatively small to qualify--worth less than $6.5 million for manufacturing contracts and $4 million for all other contracts. Now, that cap is gone.

Technically, the SBA issued an "interim rule," rescinding the cap, which you can comment on until June 6 at www.regulations.gov. (Just look up the regulation number RIN 3245-AG55.) The whole thing is a result of direction found in the 2013 National Defense Authorization Act. The SBA is also launching a series of educational programs for women-owned businesses.

To qualify for set-asides, a firm has to be at least 51 percent owned and controlled by one or more female U.S. citizens, and firms have to be certified ahead of time. You can find out more about certification on the SBA's website, here.

While this change affects only women-owned small businesses, the government tries to give about a quarter of its contracts to small businesses, although the percentage has generally fallen a bit short in recent years.

The government also formally sets aside opportunities for firms run by members of economically or socially disadvantaged groups, service-connected disabled veterans, and businesses located in certain underprivileged geographic areas.

So how do you get these kinds of opportunities? Well, to get a sense of the scope of opportunities, check out the contracting clearinghouse website, which currently lists about 26,700 open federal contracts. That's a lot, but when I wrote about federal contracting after attending the SBA's Small Business Week conference a year ago, there were 31,000 contracts listed.

Beyond that, experts I've talked with advise looking for opportunities to become a subcontractor to larger firms, and developing personal relationships with officials at the agencies you hope to contract with and their prime contractors.

Not sure where to begin with that? Here's one idea: Small Business Week this year runs June 17 to 21, with events in five cities this time: Seattle, Dallas, St. Louis, Pittsburgh, and Washington, D.C.

IMAGE: Stefan 1981/Flickr
Last updated: May 8, 2013

BILL MURPHY JR. | Columnist

Bill Murphy Jr. is a journalist, ghostwriter, and entrepreneur. He is the author of Breakthrough Entrepreneurship (with Jon Burgstone) and is a former reporter for The Washington Post.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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