Government Contracts Monitor

Obama and Procurement: Small Business Opportunities

January 14, 2009

President Obama campaigned on a promise to strengthen small business programs for women, disabled veterans, and minorities.  The new administration will now be tested to follow through on this promise.

The future of the long-awaited women’s-procurement program lies in the hands of the Obama administration.  The program, which will set aside federal contracts for women-owned small businesses in industries where they have been traditionally underrepresented, was initially finalized on October 1, 2008.  However, the Small Business Administration (SBA) reopened the issue and extended the period for comments until March 13, 2009.

A key issue will be determining which industries will be subject to set-asides.  The original proposal created set-aside programs for women-owned small businesses in 4 standard industry classifications (out of a total of 140): furniture and cabinet-makers, auto dealers, engravers, and national security.  Women’s business advocates opposed the measure and called for a more extensive program. 

Although the federal government aspires to award 5% of all contracts to women-owned small businesses, it has traditionally awarded less than 3% of contracts to women-owned small businesses.  Expect to see the Obama Administration try to improve upon this number by (at the very least) adopting the proposed rule.

Service-disabled veterans-owned small businesses may also benefit from new government policies.  According to Guy Timberlake, CEO of the American Small Business Coalition, service members returning from Iraq and Afghanistan will be a key concern of the new administration.  Timberlake speculates that support for veteran-owned businesses may improve upon the preference programs already provided by FAR 19.14.

Veterans and woman-owned small businesses seem poised to receive significant support from the Obama administration.  However, whether this support will be translated into permanent policy changes remains to be seen.