Page 4 businessperson within, a particular field. I would commend his recommendation and his rationale to this Committee for consideration. There are several other parts of this proposed legislation which our Association supports. We endorse the concept of a Small Business and Capital Ownership Program within SBA with its own Director, selected by the President and confirmed by the Senate. We are also pleased to see proposed legislative language which would coordinate government, private business, and the educational community. We also believe it is important for the Small Business Administration to be able to actively seek procurement opportunities for qualified 8(a) firms. Rather than being the "poor child" which must accept what is offered from its "richer relatives", the SBA, with legislative authority, could stand on an equal plain with other government departments and agencies in seeking out contracting opportunities to assist socially or economically disadvantaged firms within its 8(a) program. We also strongly favor "control" being a part of the definition of a small business concern. There is a recommendation the Association would like to make to be included in this proposed legislation. Should an individual be denied participation in the SBA 8(a) program, in addition to the appeals process currently available, we would like to see a final appeal resting with the SBA headquarters in Washington, D. C. In this way, SBA national officials would be in a position to carefully monitor what is happening in the regions and can verify or overturn a regional committee's decision, should it be necessary. Regarding women-owned firms, statistics are scarce. Previous witnesses have mentioned the 1976 study by the Department of Commerce, based on the 1972 census, which stated that women only owned 4.6 percent of the nation's businesses and the receipts of these firms represented only 0.3 percent, or $8.1 billion, of the total receipts of all business firms in America. The National Association of Women Business Owners has a slogan around these figures: "Last year, for every 30¢ earned by a woman business owner, an other business owner made $100." Page 5 There is no doubt that the numbers of women beginning their own firms is increasing. U. S. NEWS AND WORLD REPORT, in its August 29, 1977 issue, stated that Esmark, Inc. (a Chicago firm) had estimated that the number of female-owned businesses had reached 978,000 in 1976, more than double the number in 1972. As women are entering the work force in greater numbers, many are entering as entrepreneurs rather than employees. - - It is difficult to locate women-owned firms. In response to government initiative and other factors of cultural change there has been recent interest in minority businesses owned by Blacks, Hispanics, Native Americans, and members of other groups. As a consequence, it is now possible to quickly identify businesses owned by members of a wide variety of racial and ethnic groups. The same is not true for women-owned businesses. There are some buying guides for women's services, but there is not a single unified listing. The National Association of Women Business Owners is undertaking the job of compiling a national directory of womenowned enterprises. With the aid of a grant from the Equitable Life Assurance Society of the United States, in 1977, the Association compiled a directory of women-owned firms in the Washington/ Baltimore area. The Directory was published in April of 1977. Equitable has again provided funding to the Association to update this pilot Directory, computerize the listings, and expand the Directory to include women-owned enterprises in Boston and Chicago. The Association views this as the beginning of a national directory, which can be used by the public and private sectors in identifying women enterpreneurs for contracting purposes. There are, however, some figures on women-owned busineses and their contracting levels within the SBA 8(a) program. In 1975, the U. S. Civil Rights Commission published a study entitled, MINORITIES AND WOMEN AS GOVERNMENT CONTRACTORS. That report indicated that in FY '72, 1,780 firms were qualified in the 8(a) program. Of these, 38 were owned by women. Approximately $153 million was let in 8 (a) contracts. Of this amount, only $3 million Page 6 went to women-owned firms. The Commission updated its study in .Not only is there a need for SBA to increase - all 8(a) contracts. This figure, however, overstates the participation We have also included in Appendix B the table from the Commission's 1977 Staff Update which shows the distribution of 8(a) contracts awarded to female-owned businesses, by dollar volume, 1968-1977. There can be only one conclusion based on these statistics. Women, whether or not they are members of minority groups, do not participate equally in the SBA 8(a) contracting program! Testimony previously submitted before this Committee alludes to the fear that if more firms are qualified under the 8(a) program, there will not be sufficient dollars to go around. We consider this argument to be nonsense. First of all, under the authority in this proposed legislation, the SBA will be able to actively seek procurement opportunities for qualified firms. Furthermore, in FY '76, the SBA returned $64 million Page 7 in unused 8(a) contract dollars to the Defense Department. The report from the GAO mentioned that SBA rejected more than half of the $21.3 million in contracts offered to the program by the General Services Administration's Federal Supply Agency. It went on to say that the Veterans Administration estimated the program accepted only half of the $20 million worth of contracts it offered to the program. Furthermore, the Secretary of Transportation recently announced that a program of "minority" set-asides would be in effect throughout the Department. At the present time, under the provisions of the Railroad Revitalization and Regulatory Reform Act of 1976, the Minority Business Resource Center, a part of the Federal Railroad Administration (DOT), is seeking out minority firms and matching them with procurement opportunities with the nation's railroads and railway organizations. Women are declared "minorities" under this particular law. In extending DOT's "minority" program, the Secretary stated that women-owned firms would be eligible for the set-asides. The only conclusion, based on the above data, is that there is plenty of procurement opportunities and dollars available to many types of businesses. Participation in the 8(a) program should not be limited due to a scarcity of Federal dollars. Rather, each eligible firm should be admitted, since the level of Federal spending seems to rise every year and the variety of contracting opportunities becomes more and more diversified. The final issue we would like to address is the one about which we are most frequently asked. What special problems do women face in the world of business. The fact that there are special problems is widely acknowledged. The President referred to them when he established the Task Force on Women Business Owners. The Secretary of Commerce alluded to them when she testified before the Minority Enterprise and General Oversight Subcommittee of the House Small Business Committee last summer. On June 16, 1977, before this 29-399 O 786 Page 8 same Committee, SBA Administrator A. Vernon Weaver said: ...Small business persons, whether male or However, the problems are more severe for women, It has conclusively been shown that women business While it is evident that women are as eligible as I could not express the problems better than did the SBA Recently, a woman residing in Bethesda, Maryland, brought suit against the SBA for removing her from the 8 (a) program during the recent moratorium and review of all 8 (a) contractors. On March 10, 1978, a U. S. District Court ordered the woman and her firm reinstated in the 8(a) program. THE WASHINGTON POST, on the following day, quoted SBA Deputy Administrator Patricia M. Cloherty as saying that SBA "...will continue to admit people to the 8(a) program on an individual basis, irrespective of race, sex, religion, and other distinguishing characteristics. That's the way the program is supposed to be administered." We agree completely. In conclusion, we are pleased with many of the initiatives that the SBA is taking. We would urge this Committee to support legislation, such as the one proposed by Senator Nunn, so that the restructuring of the 8 (a) program will be fair and equitable for all Americans. |