Women-owned small businesses can be warriors now too

As has been said by many people before me, it’s always a good idea to read the fine print in a document. 

Normally, that statement carries with it largely negative connotations.  But in the case of the passage of the voluminous 2015 National Defense Authorization Act (NDAA), the fine print was music to the ears of those who champion opportunity for women entrepreneurs.  In it there was some very important “fine print” located in section 825 of the NDAA that, for the first time, authorized federal agencies to award sole-source contracts to women-owned small businesses eligible for the Woman-Owned Small Business (WOSB) Federal Contract Program for defense industry contracts.  That is a momentous development for women-owned companies in Rhode Island and all over the United States, providing women and their companies the same level of access to the federal contracting marketplace that other disadvantaged groups currently enjoy. 

{mosads}While the defense industry has done better at meeting diversity goals for minority-owned businesses, and should be applauded for their progress, until passage of the 2015 NDAA there was a gaping hole in efforts to catalyze opportunities for the burgeoning women-owned business segment in America.

As I told President Obama when I had the great privilege of meeting the president, along with other Rhode Island business and academic leaders at Rhode Island College this past summer, one of the key areas the federal government was lagging was the need to widen opportunities for women-owned businesses to participate in the billions of dollars of defense industry contracts that are helping fuel local and regional economies.  Given the strong defense industry presence in Rhode Island and New England, passage of 2015 NDAA represents a critical step forward for women-owned businesses to participate fully in the opportunity to help serve our country by supplying the defense industry with goods and services that support the critical mission of supporting the American warfighter. 

Why is it important that women-owned businesses be granted this access to defense industry contracts?  Because women-owned businesses represent a very significant driver in the U.S. economy.  Women-owned businesses are growing at an unprecedented rate.  Today, more than one in four U.S. companies is owned or led by a woman.  Most importantly, women-led companies have an economic impact of $3 trillion that translates into the creation and/or maintenance of more than 23 million jobs.  That’s an enormously significant figure.  It represents fully 16 percent of all U.S. jobs. These jobs not only sustain the individual worker, but contribute to the economic security of their families, the economic vitality of their communities and the nation.  Women-owned firms are not a niche market; they are a major driver to the success and sustenance of the U.S. economy. 

This provision of the law isn’t a hand out of any kind: this is recognizing that nearly a quarter of the country’s businesses are small businesses run and owned by women.  These companies are playing a leading role in the success of the country’s economy.  Importantly, those companies have not been given a seat at the table to compete for defense industry contracts – in most cases by virtue of their size.  As small businesses, it is extraordinarily difficult to compete with the large defense contractors for large-scale defense contracts.  And we should all be aware of the important statistics about small businesses in America:  small businesses employ more than half (51 percent) of all people in the country, and they have generated nearly two-thirds (64 percent) of net new jobs over the past fifteen years.  

While there is clearly more work to be done, we can rightly celebrate that small women-owned businesses are gaining traction toward making a more meaningful contribution to the defense of our nation.  While not every women-owned small business can compete with the giants of the defense contracting industry, women-owned small businesses can be a vital sub-contractor for large defense industry contractors, providing valuable products and services to help those larger companies meet diversity contracting regulations.  This provision ensures that women-owned businesses can compete on equal footing for their share of the defense industry contracts in the future, which is a more equitable foundation for such a large segment of the nation’s economy to work from. 

Snead is the founder, president and chief executive officer of Banneker Industries, a Rhode Island-based integrated logistics and supply chain services provider that serves many defense contractors. Snead is active in national women’s business issues and was recently inducted into the Women’s Business Enterprise Hall of Fame.