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Public Statements

Letter to Steven Preston, Administrator of the Small Business Administration

Letter

By:
Date:
Location: Washington, DC


Letter to Steven Preston, Administrator of the Small Business Administration

Obama Calls on the SBA to Fairly Consider Government Contracts to Women Owned Businesses

In 2000, Congress passed a provision requiring the SBA to award 5% of contracts to women owned businesses

U.S. Senator Barack Obama today sent the following letter to the head of the Small Business Administration (SBA), Steven Preston, objecting to the SBA's proposed rule, entitled Women-Owned Small Business Federal Contract Assistance procedures, which would do little or nothing to rectify the underrepresentation of and discrimination against women owned businesses in government contracting awards. For decades, evidence has shown that women and minority business owners have been subject to discrimination through lending, access to capital, and basic access to federal contracting opportunities. In 2000, Congress passed legislation to move towards rectifying this problem by aiming to award 5% of federal contracts to women owned businesses. However, this goal has never been met as a result of the SBA's refusal for seven years to take the necessary steps to implement the legislation, and it is unlikely to be met with these unnecessarily stringent proposed regulations.

In the letter, Obama calls on the SBA to withdraw its proposal and replace it with a program that reflects the appropriate legal standard, Congressional intent, and the pervasive lack of federal contracting opportunities for women-owned small businesses.

The text of the letter is below:

Dear Administrator Preston,

As a member of the United States Senate, I write to convey my strong objection to the SBA's Proposed Rule entitled Women-Owned Small Business Federal Contract Assistance procedures, published December 27, 2007 (Fed. Reg. 73285). I join Senate Small Business Committee Chairman John Kerry who expressed his concerns to you in a recent letter as well. The proposal conflicts with the intent of Congress, is unjustified by any legal standard, and will do little or nothing to rectify the underrepresentation of, and discrimination and artificial barriers faced by, women owned businesses in government contracting awards.

As decades of evidence has shown, women business owners and minority business owners have been subject to discrimination in numerous ways, including in lending, access to capital, and basic access to federal contracting opportunities. Based on the record, in 2000, Congress passed an unambiguous law that sought to take a small step toward rectifying this chronic problem faced by women owned businesses. The legislation set a realistic and modest goal that 5% of federal contracts be awarded to women owned businesses. Because of persistent barriers, this goal has never been met. In 2006, women owned businesses comprised 30 percent of all small businesses but received only 3.4% of all federal contracts.

There is thus a critical need to implement the Women's Procurement Program in ways that will ensure that Congress's purposes will fully be met. The SBA proposal is not only inadequate to meet this goal; in fact it affirmatively undermines Congress's intent that women owned businesses be awarded their fair share of government contracts.

First, the SBA proposed regulations impose legal requirements that go far beyond any legal standard, statutory or constitutional. These requirements create a hurdle for federal agencies which will ensure that Congress's permissible and critical goals will never be met.

Moreover, the SBA has unnecessarily and unfairly restricted application of the Women's Procurement Program. Congress exceeded constitutional requirements in directing that the Program be used only in the specific industries where women-owned businesses are under-represented. But in interpreting the study it commissioned, the SBA limited the Program to only 4 of 2,300 business categories; in fact, the study should fairly be read to find under-representation in the overwhelming majority of business categories.

Despite a clear and legally justified Congressional mandate, the SBA refused to release the necessary implementing regulations for seven years. Unfortunately, this long awaited proposal is a tragic step backward. The SBA should withdraw this proposal and replace it with a program that reflects the appropriate legal standard, Congressional intent, and the pervasive lack of federal contracting opportunities for women-owned small businesses.

Sincerely,

Barack Obama
United States Senator


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