Policy

Government Agencies Fail to Hire Women-Owned Businesses, Again


The Small Business Administration announced its annual tally of federal contracting results on Friday, and the results were familiar: The government failed, yet again, to meet its target for awarding 5 percent of contracts to women-owned small businesses. In the 20 years since Congress set the 5 percent goal, the federal government has never hit its mark.

About 4.3 percent of total contracts went to women-owned businesses, according to data available online. That amounts to $15.5 billion, $2.3 billion short of the goal. Over the last 20 years, these kinds of missed opportunities have cost women business owners at least $63 billion, according to a recent report from the Senate Committee on Small Business and Entrepreneurship.

The biggest culprit was the Department of Defense, which fell $3.3 billion short of its target for awarding contracts to women-owned small businesses. The Department of Energy awarded $321 million in contracts, or 1.5 percent of its total spending, to women-owned small businesses. The DOE has argued in the past that the nature of the agency’s work makes it difficult to contract with small companies.

Of course, the targets are just targets. There are no real consequences for falling short. The goals, and the annual reporting of the results, are a bit of political theater, allowing the SBA to cheer on agencies that fare well, and shame those that fall short of goals.

This year, the SBA actually had some success to trumpet. For the first time since 2005, agencies hit their target of awarding 23 percent of contracts to Main Street. We’ve known that was coming for a while, but it may offer some encouragement to female small business owners: If they’re really, really patient, they might get access to their share of government jobs eventually.

Clark is a reporter for Bloomberg Businessweek covering small business and entrepreneurship.

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