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LEGAL ISSUES

SBA Defends Contracting Plan

The controversial new program will boost procurement for women-owned firms, the agency says.
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A controversial program allowing federal agencies to set aside contracts for some women-owned small firms will help the government meet its annual contracting goals for the first time in over a decade, the head of the Small Business Administration said this week.

At a congressional hearing on Wednesday, SBA Administrator Steven Preston called the program an "additional tool" in efforts to award five percent of all federal contracting dollars to women-owned small businesses every year -- a goal the government has failed to achieve since being set by Congress in 1994. Preston said he doubts the goal will be met this year.

"I believe five percent will be achieved some day," Preston said. "I think that if you look at the growth over the last several years, it's been very strong."

Opponents of the program, which was unveiled earlier this month after seven years of review, say it will benefit only a fraction of women entrepreneurs, while shutting out others.

Under the proposed rules, federal agencies would be allowed to set aside contracts for women-owned business in four industries identified as underserved in the federal procurement market. There are currently 313 industries listed in the procurement registry.   

Elizabeth Papez, the deputy assistant attorney general, said both the delays and restrictions were necessary to ensure the program complied with constitutional law.

"The program would require federal agencies to grant contracts to some businesses and deny them to others on the basis of gender," Papez said. As such, it had to withstand scrutiny under the equal protections component of the fifth amendment, she said.

According to the U.S. Women's Chamber of Commerce, women make up 30 percent of the nation's business owners, but receive just three percent of federal contracts.

Last updated: Jan 16, 2008




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