Lawmaker calls SBA's rule 'silly'

The House Small Business Committee chairwoman today called a proposal regarding a women’s procurement program “silly” and said it won’t do much to send more contracts to women-owned small businesses.

Rep. Nydia Velázquez (D-N.Y.) said Small Business Administration “should scrap the rule and go back to the drawing board to provide a wider path” for women join the federal marketplace.

The program aim is to bring more businesses owned by women into the federal marketplace by having agencies set aside contracts for such companies.

Velázquez said SBA’s rule is too narrow because it limits agencies’ women set-aside programs to companies in only four industries, such as furniture and kitchen cabinet manufacturing and motor vehicle sales.

“Women entrepreneurs…are left scratching their heads. 'Can this be for real?'” she said.

In choosing how to determine women’s disparity, Velázquez said SBA picked the most restrictive method of finding where discrimination exists in industries, when a study by the Rand Corp. had many others from which to choose.

“If this rule becomes final, the administration will be successful in blocking [the program] by regulation,” Velázquez said.

However, SBA Administrator Steven Preston, who testified, defended the program, saying the methodology was scientific. He also said the program was in line with the Rand study, which suggested SBA should focus on the total contracting dollars going to women-owned small businesses, not the number of contracts awarded to them.

The logic was that everything from congressional appropriations to the agencies’ small business contracting goals is measured in dollars, Preston said. Basing a measure number of contracts does little because it doesn’t account for businesses’ financial benefits.

Preston said he was surprised by the method’s outcome. He added, though, that a procurement program intending to bring more women-owned companies into federal contracting is only one way to boost how much money agencies send to women-owned companies, and it won’t increase the numbers on its own.

“There is no single magical approach,” he said. “It’s an additional tool in the quiver.”

One of Velázquez’s frustrations is that SBA’s proposal doesn’t embody what Congress envisioned when it passed legislation that created the program in 2000.

She also disagreed with a provision in SBA’s proposal that would require agencies to determine their own disparity regarding women in their contracts before using the program. She said it would hamper the program’s success.

Elizabeth Papez, deputy assistant attorney general at the Justice Department who also testified, said one of the gender-based program’s highest hurdles is proving discrimination against women in contracting so the program would be able to withstand legal scrutiny, even by the Supreme Court.