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Judge Wants Answers on Women's Set-Aside

A federal judge has ordered SBA to report on its progress toward implementing the set-aside program for women business owners that was signed into law nearly five years ago.

U.S. District Judge Reggie B. Walton in Washington rejected SBA’s motion to dismiss the lawsuit filed by the U.S. Women’s Chamber of Commerce. The Chamber asked the court to direct SBA to implement the set-aside program.

In his Sept. 30 order, Judge Walton told SBA to give him a status report within 45 days after he issues a written opinion.

Women’s Chamber CEO Margot Dorfman said, “After five years of waiting, we are very happy to find that our American legal system works, even when our executive branch does not.”

President Clinton signed the Women’s Procurement Program into law on Dec. 21, 2000. The law required SBA to conduct a study to identify “industries historically underrepresented by women-owned small businesses,” which would be eligible for set-asides.

The Justice Department rejected SBA’s original study, saying it would not stand up to a court challenge because it did not prove discrimination against women.

In 2002 SBA asked the National Academy of Sciences to evaluate its study. The Academy’s Committee on National Statistics did not issue its report until March 2005, when it declared the study was flawed and recommended a new one.

In May 71 Democratic members of Congress filed a friend-of-the-court brief supporting the Chamber lawsuit, saying SBA’s delay “frustrate[s] Congress’s intent.” At that time SBA said it was moving to commission a new study, but no RFP had been issued as of Oct. 5.

SBA did not reply to a query about the current status of the study.

Congress has set a goal of awarding 5% of federal prime contract dollars to woman-owned firms, but their share was around 3% in fiscal 2004.


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