SBA Revisions Would Benefit White Women

WASHINGTON — The Clinton administration intends to greatly expand the number of white women entrepreneurs eligible for the government’s largest program that aids minority businesses, officials said Tuesday. The move comes at a time of growing political and legal challenges to federal affirmative-action policies.

Small Business Administrator Aida Alvarez said proposed new regulations for the SBA’s 8(a) minority-business program, published Tuesday, are meant to add several thousand new firms to the program, increasing its ranks by half.

“I expect the increase will largely come from [white] women-owned firms,” Alvarez said in an interview.

In fiscal 1996, about 6,000 firms received $6.4 billion in federal contracts through the program, which permits federal agencies to reserve contracts for minority-owned firms. In 1994, only nine firms in the program were owned by white women, nine by white males and nine by whites with disabilities, the SBA says.

The revisions would make it easier for white women to contend that they have been subject to discrimination in the contracting market. They might, for instance, make a case that as women they had been unable to obtain necessary bank loans.

“The message is . . . this agency is strongly behind the 8(a) program and intends to improve it and open it to more people,” said John T. Spotila, SBA’s general counsel. The program’s name will be changed from a “minority enterprise program” to a “business development program,” he said.

Some Washington analysts said the new rules were partly an effort to expand the political base of an at-risk program by making more people eligible for it.

Other regulations and policies expected this year from the Justice and Commerce departments will deny important contracting benefits to large, successful, minority-owned firms and crack down on abuses, officials said.

The SBA will give small, disadvantaged firms more leeway to team up in bidding on large contracts and will create a mentoring program in which large firms taking part in the program can help newcomers learn the ropes, Spotila said.

Small “disadvantaged” businesses, including companies in the SBA program, got about 5.5%, or $11 billion, of the total $197.5 billion of federal purchases in fiscal 1996, the same share as in the year before.

In the Washington region--home to the nation’s largest concentration of participating companies--minority executives and industry representatives were divided on the likely impact on the program and the area’s economy.

Sam Carradine, executive director of the Washington-based National Assn. of Minority Contractors, said the addition of firms owned by white women inevitably would reduce contracts for minority-owned companies.

“It doesn’t necessarily mean the female-owned firms aren’t in need of programs of assistance,” Carradine said. “But when you have a finite pie and add more people carving up that pie, some won’t get as much,” said Carradine, whose association represents 5,000 construction contractors nationwide.

Fernando Galaviz, head of the National Federation of 8(a) Firms, supports the changes, believing they will strengthen the program. But he still has fears that the program fails to properly address the needs of small minority firms. He is president of Centech Co., an Arlington, Va., computer services firm.

The program, which was designed to help minority businesses in the aftermath of urban riots in the mid-1960s, has become a focal point of a campaign by conservatives against affirmative-action programs that has reached the Supreme Court.

In its 1995 decision in Adarand vs. Pena, the court required that racially based preferences in federal programs must be narrowly tailored to meet specific instances of discrimination.

Although several federal agencies earmark contracts for women-owned firms, the SBA’s program has been reserved almost exclusively for minority-owned small businesses as a general remedy to past discrimination.