Expanded Women’s Set-Aside Doesn’t Quiet Critics SBA intends to expand its women’s contracting program to allow set-asides in 31 industries, rather than the four industries in its previous proposal, but it will not retreat from one controversial requirement: Before any contract can be set aside for woman-owned firms, the procuring agency must show that it has discriminated against women in that industry. Critics have argued that the discrimination provision renders the set-aside program meaningless, because no agency will admit discrimination. “It’s a poison pill,” said Margot Dorfman, CEO of the U.S. Women’s Chamber of Commerce. There is no such requirement in any other set-aside program. Acting SBA Administrator Sandy Baruah said the provision is necessary to conform to court decisions limiting affirmative action. In a Sept. 30 interview, Baruah told Set-Aside Alert SBA has softened its original legal interpretation so that “no federal agency has to say, ‘We purposely and intentionally discriminated.’” In legal terms, he said, that means an agency can acknowledge “passive,” unintentional discrimination rather than “active,” deliberate discrimination. “Set-aside programs have to meet a constitutional standard,” he said. “If that rule were open to broad and immediate legal challenge, that rule is of no worth to anybody. “I am comfortable and confident that we have, from a constitutional standpoint and a legal standpoint, is the right way to proceed.” In December SBA proposed limiting set-asides to woman-owned firms in just four of 140 industry groups, based on the findings of a Rand Corp. study that those were the only industries in which women were underrepresented in federal contracting, when measured by the dollar value of contract awards. The agency has since examined unpublished census data, and concluded that 31 industries should be eligible for set-asides. (See list.) SBA proposed a new rule asking for comment on that conclusion. Baruah said set-asides will be permitted in the 31 industries unless public comments convince him otherwise. “Firstly, 31 industries certainly is more common-sense than four,” he said. “It is a more reasonable number than four. “Secondly, the census data lacks the data anomaly that the Rand data had.” As SBA explained it, data used by Rand double-counted some woman-owned businesses, making it appear that there were more such businesses than actually exist. Senate Small Business Committee Chairman John Kerry, D-MA, called the new proposal “insulting and hardly an improvement from the SBA’s earlier ruling… Eight years ago, when Congress passed this law, our intent was to level the playing field for women entrepreneurs. This ruling includes more roadblocks and does nothing to make it easier for women to compete.” By issuing a new proposed rule, SBA is delaying the start of the set-aside program for several more months, most likely until after a new president takes office Jan. 20. Dorfman called it “just another stalling tactic.” “They don’t like the data, so they’re putting out the data they do want,” she said in an interview. “It’s still sabotage.” Dorfman said an SBA attorney showed her the new rule as they were entering a Washington courtroom for a Sept. 29 hearing on the Women’s Chamber’s lawsuit over delays in implementing the program. U.S. District Judge Reggie B. Walton has told SBA to keep the rulemaking process moving, but stopped short of setting a deadline for implementing the set-asides. Congressional opponents of the SBA rule introduced several measures to overturn it and broaden the set-asides to cover more industries, but none of them passed. SBA’s proposed rule including the new industries is at http://edocket.access.gpo.gov/2008/E8-23139.htm. Comments are due Oct. 31. The final rule setting out how the program will work is http://edocket.access.gpo.gov/2008/E8-23138.htm.