News From Congresswoman
Nydia M. Velázquez
Representing New York's 12th Congressional District - Brooklyn, Manhattan, Queens
Ranking Democratic Member, House Small Business Committee

For Immediate Release
October 29, 2004

CONTACT: Kate Davis, Allyson Ivins, (202) 225-4038

Velázquez Applauds Women's Chamber of Commerce for Taking Action to Implement Procurement Program
USWCC files lawsuit against SBA for failing to implement program

WASHINGTON -Congresswoman Nydia Velázquez, Ranking Democrat on the House Small Business Committee, issued the following statement regarding the U.S. Women's Chamber of Commerce lawsuit that was filed today against the Small Business Administration (SBA) for their failure to implement the women's procurement program:

"Today, the U.S. Women's Chamber of Commerce (USWCC) took an important step to get the U.S. Small Business Administration (SBA) to implement the women's procurement program - section 8(m) of the Small Business Act. The USWCC has filed suit in the U.S. District Court in Washington, D.C. forcing the SBA to move ahead with this program that has been stalled for nearly four years.

After nothing but years of rhetoric from organizations that claim to represent women business owners, the U.S. Women's Chamber of Commerce has stepped up and taken action needed to implement the women's procurement program. As the author of the legislation that resulted in the creation of the women's procurement program, I commend the USWCC for taking the administration to task for its failure to act on this important program, which will aid women business owners who want to do business with federal agencies.

Women-owned businesses are a dominant force in our economy. Since 1997, women-owned firms have grown at nearly twice the rate of all businesses. Growth in employment by women-owned businesses has been even more dramatic at 24 percent versus 12 percent for all other firms. Women-owned companies employ 19.1 million people - more than one in four workers, and generate 18 percent of all sales - nearly $2.5 trillion. Nearly one-third of U.S. businesses are owned at least 51 percent by women, and would be eligible for this procurement program.

For the past four years, the president has traveled the country touting his record on issues impacting small business - and especially women-owned businesses. Unfortunately, the rhetoric simply doesn't match the reality. The tax cut offered by the president has not sufficiently addressed the needs of small firms. Nothing has been done about rising healthcare costs. Small businesses continue to lose traction in the federal marketplace, with the overall small business goal not being achieved in any of the past four years. And, to top it off, a program that will literally increase contract opportunities for women business owners has been stalled.

When I became the Ranking Democrat on the House Small Business Committee seven years ago, I recognized that the federal marketplace has remained closed to women-owned companies. This became even more evident five years ago when I began tracking the promises agencies make through their establishment of small business contracting goals and issuing an annual report on the actual achievements towards those promises.
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The women's government contracting goal of 5 percent, established in 1994, has yet to be achieved. In fact, in FY 2003, the achievement was only 2.89 percent, costing women-owned businesses $6 billion in lost contracting opportunities in that year alone. In 1999, 2000, 2001 and 2002, those lost opportunities amounted to $4.8 billion, $4 billion, $5.5 billion, and $4.9 billion, respectively. In the past five years, if the women's procurement goal had been achieved, women-owned businesses would have received more than $25 billion in additional contracts. The women's procurement program would substantially impact the ability of federal agencies to achieve their women business goals.

This much needed procurement tool was created with the reauthorization of the SBA's programs that occurred in 2000. When Congress created the women's procurement program, the goal of the initiative was to correct the market failure that allows two-thirds of businesses to receive more than 97 percent of government contracts. This program, which had strong bi-partisan support from its inception, will allow federal agencies to restrict competition to only women-owned businesses in industries that have historically been closed to them.

From the beginning, the implementation of this program has been stymied by the administration. The linchpin of the program - the study to determine which industries are in fact under-represented by women-owned businesses - must be completed prior to government agencies being able to use the program to contract with women-owned companies. This critical study was completed by the SBA and regulations were drafted. However, these regulations ran into a roadblock in the required review by the Office of Management and Budget (OMB). The SBA ultimately withdrew the study and draft regulations from OMB.

Since that time, no further substantive action has occurred. Every spring, in connection with the SBA's budget request hearing, the Committee has asked the SBA Administrator for an update on the implementation of this program. Letters have been sent. A plethora of meetings have occurred. And, each year, the SBA provides more excuses and smokescreens for why they have not progressed.

The frustration of the Committee on Small Business was evident in the most recent attempt to reauthorize the SBA's programs. Democrats and Republicans on the Committee worked together to make the women's procurement program a reality. It is unfortunate that a common sense solution that is supported by so many varying groups and legislators across the board has yet to see action. Through today's filing by the U.S. Women's Chamber of Commerce, the USWCC is accomplishing what the Republican leadership in Congress has been unable or unwilling to do: forcing the administration to implement laws passed by Congress.

It is my hope that the SBA will implement the women's procurement program without further delay. From 2001 to 2004, women in the workforce have lost 300,000 jobs. Entrepreneurship is key to getting people back to work, and the women's procurement program will help in this regard.

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