Proposed Rule Threatens Women-Owned Businesses
Recently proposed regulations by the Small Business Administration to limit federal contracting set-asides for women-owned business have come under fire as having "no basis in law" and portending "doom" for the seven-year old program, according to the East Bay Business Times. Besides limiting set-asides to four industries, the proposed rule also requires each federal agency to make a finding that it had discriminated against women before setting aside contracts.
Jennifer Brown, Vice President and Legal Director of Legal Momentum, a legal advocacy organization dedicated to securing equality and justice for women, condemned the proposed rule, saying:
It is frankly impossible to imagine any federal agency making a formal determination that it had engaged in sex discrimination in awarding government contracts. [This would not only] embarrass the agency but presumably open it to litigation by past disappointed contractors.
She added that no court decisions require individual agencies to make such findings.
Denise Farris, a commercial construction lawyer, said, "the practical effect of this rule is that virtually no contracts will ever be successful set aside under this program."
Written By:Mike Stamler On February 6, 2008 3:19 PM Written By:Raul Espinosa On February 6, 2008 5:21 PM
The SBA rule is dumbfounding because it flies in the face of the nuanced RAND findings. Further, the SBA proposed rule for WOSB applies "strict scrutiny," the wrong legal standard of review. The "Strict Scrutiny" standard is based on Supreme Court decisions in City of Richmond v. J.A. Carson Co. and Adarand Constrctors v. Pena. Each of these cases dealt specifically with legal challenge to race-based, not gender-based, procurement programs. There is no basis for the assumed similar standard holding for gender based set-aside programs such as in the WOSB program.
Executive Order 11458 , which dates back to 1969, made the expansion of procurement opportunities for women already possible. Why the SBA did not use such program and spent 7 years looking for a method is also dumbfounded. The provisions of Executive Order 11458 were incorporated into P.L 95-507, formally enacted in 1978. P.L. 95-507 stipulates, "It is the policy of the Government to provide maximum practicable opportunities in its acquisitions to small businesses, small disadvantaged businesses and women-owned businesses."
P.L. 95-507 formally established the Small Business Disadvantaged (SBD) Program which IS and has always been the perfect vehicle for bureaucrats to have used to accommodate the 1994 Congressional mandate which would have given women-owned businesses the 5 percent share of Federal contracts Congress wanted. Why bureaucrats never looked outside-of-the-box for the solution bedazzles all of us working on an entrepreneurial solution referred to as the ‘umbrella initiative.’
A joint effort between the Fairness in Procurement Alliance (FPA) and the University of North Florida (UNF) would create a mega small business procurement center as an umbrella of private businesses (with academicians and attorneys as well) responsible for the delivery of essential services and benefits to small and disadvantaged businesses all over the country. The activities of this mega center would be unprecedented because these services would be using the latest technologies to integrate a multitude of existing services into one. Most importantly, the mega Center will be in the hands of entrepreneurs as opposed to bureaucrats and. . . it would have the oversight and transparency, Congress demands.
This new partnership would allow State and local governments with 'procurement set-aside programs' – that are in compliance with Federal statutes - to take advantage of this far reaching effort and save taxpayers dollars at the State and municipal level while helping their local small businesses in the process.
This entrepreneur initiative would be accomplished by eliminating constitutionality issues and duplicative efforts; by enhancing the marketing of the services; and by integrating established services to maximize the benefit of a combined mega effort.
This mega Center would transform countless individual efforts into one essential service to empower and track small and disadvantaged businesses and their progress through the system to make sure they are securing a fair share of public contracts not only at the federal level, but at the municipal and state level as well. Yes, we want these small businesses to grow – and not remain small – which is what the bureaucrat rules encourage. Procurement set-asides are about opportunities and, when groups end-up having it, they move out of the program so that other small business groups can compete in a level playing field.
With the private umbrella initiative in place, procurement set-aside programs at the state and local government will be better protected from the challenges they have unfairly received when they have been linked to race. Finally, with the inclusion of a legal unit in its mix to both defend their statutory rights, prevent their abuse and facilitate the litigation of their cases - an opportunity they never had – this Mega Center would avert a procurement crisis that would otherwise occur by relying on bureaucrats, until hell freezes over, for the solutions.
Raul Espinosa, Founder
Fairness in Procurement Alliance (FPA)
"the way to stop discrimination on the basis of race is to stop discriminating on the basis of race"
And the best way to stop discrimination on the basis of sex is to stop discriminating on the basis of sex.
And how exactly does the "Proposed Rule Threatens Women-Owned Businesses"? Does it shut them down or give them an advantage in a bidding process? Does it say that they are not allowed to present proposals?
What the rule does do is to try to make it a level playing field from here on out. Past discrimination may have occurred. I am sorry for that but that should give no individual the leg-up on business over me. I didn't create or benefit by the earlier situation. By creating set-asides, all you are doing is creating a never-ending cycle of wrongs. It has to end.
The SBA proposal does not restrict any contracting program for set-asides because there currently is no program for set-asides. Although the SBA's proposal is for a limited program, it is being proposed for an area where the current alternative is nothing. It doesn't portend "doom" or anything else for any "seven-year-old program" because there is -- say it aloud with me -- no program at the present time. There never has been a set-aside contracting program for women. This is the first. And at worst, if it fails to bring in a single new contract for a woman-owned small business, then the current situation will be unaffected, and contracts with women-owned small businesses will continue to grow (from $4.6 billion in 2000 to more than $11.6 billion in 2006).