Cairo Corp. of Chantilly, Va., has grown nearly 200 percent annually during the past five years and now tops Washington Technology's annual list of the 50 fastest-growing federal IT contractors. Owner and president Alba Alemán said she doesn't want any special treatment from the government because of her gender.
"I don't put a lot of credence into whether I'm a woman or a man. I just work toward success," said Alemán, whose 80-person 8(a) small business moved to Chantilly, Va., in January.
Others said that, Alemán's success notwithstanding, more needs to be done to give women a shot at competing in the federal market.
In fiscal 2003, 2.98 percent of government contract dollars went to woman-owned small businesses, according to the Small Business Administration, an amount far short of the federal 5 percent goal.
If the goal were to be met, up to $5.5 billion in federal contracts would go to woman-owned small businesses annually, according to Rep. Nydia Velazquez, D-N.Y., ranking minority member on the House Small Business Committee.
"It's a huge amount of money," said Sharon Hadary, executive director of the Center for Women's Business Research in Washington. Hadary said women aren't getting fair consideration for federal contracts.
"Woman-owned small businesses account for 2 percent to 3 percent of federal contract dollars, yet they are 30 percent of privately held firms," Hadary said. "We really do need to create a level playing field."
Under current regulations, woman-owned small companies that don't fall into any other small-business category, such as 8(a), can only pursue contracts set aside for all small businesses or full-and-open competition contracts. Many women said that if contracting officers were allowed to set aside contracts for woman-owned businesses, federal agencies would have no problem meeting their collective 5 percent goal. Other types of small businesses -- 8(a), HUBZone and service-disabled veteran-owned -- have set-aside programs.
"By not having that set-aside, woman-owned businesses are getting pushed out of set-aside opportunities," said Valerie Perlowitz, owner of Reliable Integration Services Inc. in Vienna, Va. "Everyone is getting a piece of the pie except woman-owned."
As a group, women who own small businesses in the federal IT market are ambivalent about the set-aside program. They want to be taken seriously and don't want to appear helpless or weak. But they also want equal treatment from the government. For many, this means getting the set-aside status that was promised them in law four years ago.
"We'd just like to have fair play," said Catherine Giordano, president and chief executive officer of Knowledge Information Solutions Inc. in Virginia Beach, Va.
ON THEIR OWN
More than twice as many woman-owned firms are on Washington Technology's 2004 Fast 50 list this year as were on last year. Fifteen of the companies, or 30 percent, are woman-owned. Only seven woman-owned firms made the list last year. Two woman-owned companies are on Washington Technology's list of the Top 25 8(a) firms.
The women's strong showing belies the difficulties they've had along the way, competing in what Irma Tuder said is "still a good-old-boy network." Tuder is president and CEO of Analytical Services Inc. in Huntsville, Ala., which graduated from the 8(a) program in April.
For example, when Alemán started Cairo Corp. in 1999, she used a business model that was similar to a business run by men. She had great credit and money to put into the business. Yet she had difficulty securing financing.
"That was one of the most frustrating aspects of starting the business," she said. "I didn't need a loan. I needed a line of credit to finance my payroll, and getting that was extremely challenging."
Alemán's experience wasn't unusual, said Ann Sullivan, federal legislative consultant for Women Impacting Public Policy, a Washington advocacy group. "Not all that long ago, you had to take your husband to the bank," she said. "It has loosened up some, but the banking industry has not seen the same potential for woman-owned businesses as did their male counterparts."
Many women said they also have difficulty making business connections because of stereotypical notions about them.
"I've met clients for dinner, and if they are male and somebody sees us together, they may get the wrong impression. My male colleagues have told me it gets questioned," said Angela Drummond, owner of SiloSmashers Inc. in Vienna, Va., No. 43 on the Fast 50 list.
Alemán has been asked out on dates at business functions. She always says no. Men definitely don't get the same kind of attention, she said.
"The experience has taught me to be very serious, so that the only thing that projects is 'I'm here to do business,' " she said. "As long as you don't blur those lines, people will always respect you for that. No dates, no lunch."
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Both women say they try not to focus on the pitfalls of being a woman in a male-dominated industry.
"If you focus on those hurdles, you are never going to get to the other side," Drummond said.
So the women focus on growing their businesses. SiloSmashers made its first acquisition this year, and now employs 86 people. The company has had 58 percent compound annual growth over the last five years. Drummond has fueled that growth by partnering with another small firm to compete
with large businesses such as Accenture Ltd. and Booz Allen Hamilton Inc.
Drummond, a Native American, said SiloSmashers probably will graduate from the 8(a) program in 2006, four years early, because of its rapid growth.
THE CASE FOR SET-ASIDES
Despite their successes, many women said they still want a set aside for their companies. Some said that without a set aside, the federal government will never meet its annual goal of awarding 5 percent of prime contracting and subcontracting dollars to woman-owned small businesses.
"It's only a goaling program now," Perlowitz said. "The problem now is that if I talk to a contracting officer, say we are woman-owned and the customer wants to buy something quickly, there is nothing that allows them to set aside this piece of work because it is woman-owned."
A 1994 federal law set the 5 percent goal, and a 2000 law allowed a set-aside program for women, but the program has never been written into regulation.
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The 2000 law required a disparity study before the procurement regulations were written. The study would identify industries in which woman-owned businesses were under-represented in federal contracting. It has never been completed.
"There has been no sense of urgency around this," Sullivan said. "It's inconceivable to us that it would take so long to complete a relatively simple study."
The Senate Small Business Reauthorization Act of 2003 includes a provision that would transfer the study to the Government Accountability Office, but that bill has not been voted on by the full Congress.
The Senate Small Business Committee is "aware of the desire to establish a set aside, but our hands are tied until we have reliable data to determine there is a need," said committee spokesman Craig Orfield.
According to SBA spokeswoman Tiffani Clements, the agency conducted a study but decided it did not conform to legal requirements because SBA included firms that were not "ready, willing and able" to bid on government contracts.
The study was turned over to the National Academy of Sciences for review, and a committee of experts will make recommendations on proper study methodology, Clements said. Constance Citro, director of the Academy's Committee on National Statistics, said the recommendations would not be made until late November.
Even as SBA officials pursue completion of the study, they seem to question whether women really need a set aside.
"A number of factors would seem to mitigate against much of an adverse effect on woman-owned small businesses," Clements said. "Chief among these factors is that the SBA 8(a) program and related small disadvantaged business programs afford minority women and eligible white women the advantages of federal procurement set asides. In addition, there are many other programs and policies designed to assist woman-owned small businesses offered by SBA."
SOMEONE ELSE'S SLICE
For some, the issue is still in doubt.
"Most agencies are meeting their woman-owned small-business goals without setting aside contracts for woman-owned businesses, which speaks highly of woman-owned businesses," said Leslie Butler, president of Zen Technology Inc. The Bethesda, Md., company is No. 33 on the Fast 50 list.
Indeed, agencies such as the Commerce, Education and Interior departments surpassed 5 percent in contracting to woman-owned businesses last year. But many more -- such as the Energy Department, which awarded less than 1 percent of its work to woman-owned businesses -- didn't come close.
A new set aside would bring new woman-owned businesses into the federal marketplace, benefiting the government, Tuder said. But unless the amount of money going to small businesses increases overall, a new set aside will only take work out of other small-business programs, she said.
"If you are just taking from one to the other, it doesn't help anybody," she said.
Staff Writer Gail Repsher Emery can be reached at gemery@postnewsweektech.com.
