Our Credibility is Questioned
April 5, 1977 — US House of Representatives, Subcommittee on Minority Enterprise, Washington DC
Ms. Kaiser: Thank you, Mr. Chairman, I am sure this is a really great day for me because I have ben hoping for an opportunity to express the viewpoints of the members of our association in terms of some of the problems we have encountered.
I am Inez Kaiser, the president of the National Association of Minority Women in Business. Our organization was founded I 1973 and it is really an outgrowth of a study that I conducted for OMBE and the Department of Commerce I 1972. In fact, it was a brainchild of mine because there was no information available concerning minority women in business. There needs to be information identifying the kids of businesses they own and some of the problems they encounter.
As a result of this study in 1972 it was my pleasure to become the chairman of the first Conference on Women in Business. Since that time we have ben attempting and trying to secure funds to continue our program. Though we have not been successful, I feel that we have certainly pricked the conscience of many persons and as a result there have bene conference send funding by other agencies to sponsor regional conferences held on women- owned businesses.
Our membership is composed of approximately 2,000 women who are active, and we have a total of 5,000 women involved. The types of businesses that we are engaged in are manufacturing, retailing, and various types of service ranging from professional levels to unskilled and untrained levels.
The age range of our members varies from the late twenties to the seventies with representation throughout the United States. I would like to point out that our members are owners of their own businesses and that we s a whole have tried to become familiar with the various kinds of government offices.
We have five primary goals that we address ourselves to. Number one, we as members try to combine our efforts to secure more business from Federal agencies and the private sector. Second, we try to become familiar with all the legislation and government programs that affect us as entrepreneurs. Third, we shear knowledge ad information with each other than will assist us in our professional growth. Further, we monitor the performance of Federal agencies in awarding contracts to women, and especially to minorities. And lastly, we encourage minority college students to consider becoming business owners because we realize they are the future of tomorrow, and we sincerely hope they will continue to carry on.
As has been stated earlier, women who own businesses encounter different problems. We live in a society that for years was so structured that in general, females were not owners of businesses; furthermore, minority women face more and different kinds of problems because of their racial and ethnic backgrounds. We realize this country has made some progress since the civil rights movement in the 1960’s to provide equal opportunities for all Americans, but minorities in general have been discriminated against more than nonminorities. It is for this reason that we organized a national association to bring together women who share common business problems and have similar goals.
I would like to emphasize that black females do compose the greatest number of our membership, although it is open to all minorities who wish to join. I also would like to state that most of us did not inherit a business. We did not have husbands who owned businesses. We were just women who had a desire and the determination to become a part of the mainstream of this economy.
We have read in detail a report of the U.S. Commission on Civil Rights published in May 1975, subject: “Minorities and Women as Government Contractors.” My remarks today will express some of the concerns in that report as well as those of members of our organization. We do find that our group confirms most of the findings in this report. The first area I would like to discuss are the special problems faced by women, especially blacks, as a class within the business system. We find that as minority business owners, those of us who are black, that the best opportunity for us to secure contracts from the Federal Government is through the 8(1) program. Due to the size of most of our businesses, we cannot become involved in competitive bidding. Although this program, 8(a) was designed to help small businesses, according [to] the Commission’s report, it identified only 38 female-owned firms as having been approved for the 8(1) program out of a total of 1780 “mostly minority” firms. There were 402,000 female-owned businesses in 1972, according to a report released by the Department of Commerce in March of 1976. Of that total, 38,810 were minority-owned businesses. The average grow earnings of female-minority-owned businesses was $25,000 per year. This reflects the small percentage of female-owned businesses by minorities and the amount of business they generate during a year. According to the information we received last year, there were only 14 female-owned 8(a) firms that received a total of $4 million in business. Out of the total amount of contracts et, a very small dollar volume went to black business women. Those who did receive the moneys were based primarily on the east coast.
Since I am one of the 14 8(a) contractors listed — with 17 years of experience — it would be noted that for the year 1976 my firm received zero dollars in business from the Federal Government. Two years prior to that, our firm received one government contract with a total value of approximately $35,000, $15,000 of which was turned back into the Government at the end of the fiscal year because we were not given task orders to use the money nor was the money carried over the next fiscal year upon our request. Also, $8,000 of this sum was paid to a university group that served as subcontractors to us, which meant that, in reality, $23,000 out of the $35,000 was never received by us — yet, according to the records we were awarded a $35,000 contract.
The top value of any contact that has been received by me during the 7 years I have been in the program has been $39,000, where, on the other hand females of other races have received many substantial contracts ranging from $50,000 to $100,000 each and with a total yearly volume in excess of $100,000. The inequity in the awarding of contracts to my firm is typical of what is happening to other members of our organization who are not located in Washington, D.C. or on the east coast.
It might be of interest to this committee that 3 years ago we opened a second office in Washington, D.C. after having been confronted with the idea from several Federal agencies that we did not have a local base was shy we did not receive contracts and we had to do our own marketing.
It has not been advantageous for us to have an office in D.C. It has only added to expenses.
Another problem that we as minority, and especially black women, are faced with is that our credibility is, has been, and is continuously questioned. The “program people” and contracting officers of Federal agencies still do not believe that black women are capable of performing a task or rending a service equal to other women and males.
Another problem that e have encouraged a deep lack of sensitivity to the methods in which black businesses are operated. It is common to hear at any government seminar you attend that black women do not know how to run a business and lack management skills. According to the Labor Department statistics, over 51 percent of the black households are headed by females and studies have shown that black women can manage and run successful businesses if given an equal opportunity to compete in a free enterprise system. Another problem that we are consistently faced with is that “contracting officers” and “program” people in most agencies are non-minorities. The trend and tendency is to award contracts to their own.
Since black compose over one-fourth of the total population of approximately 40 cities, the minority female-owned businesses are located in these areas. The cities populated with the most blacks are no located on the east coast but in the Midwest, the South, and the Southwest. In the past, the distribution of government contracts to black females has been uneven from a geographical standpoint.
Now that SBA has been decentralized, we have found that many of the regional directors have little or no sensitivity to black businesses headed by females. Many 8(a) contracts have been awarded to white firms headed by males or to those headed by white females. This is particularly true in the region where I reside.
Due to the cash flow problems of most small businesses and our lack of knowledge of all government regulations, we have become the victims of racism and we have been taken advantage of in dealing with “program people,” “Contracting offers” and other persons involved with the 8(a) program. It seems apparent to use that there is need for more strict regulations to enforce or assure the promptly payment of invoices once work has been completed.
I can personally attest to this because I have been trying since August to collect some funds on two government contracts that are completed. We have tried many avenues, such as contracting persons in congressional offices, contracting the secretaries of agencies, and up to this moment little or nothing has bene done. We still have outstanding invoices.
Speaking in the area of finances, moneys that have been allocated for the community development corporations and other economic development organizations in major cities is not available to females because in may instances there is need to use community property and jointly owned investments for collateral. Also, boundary lines have been so designed that you automatically are ineligible to borrow working capital. This is particularly true for those of us who are in the service businesses, and over 90 percent of our businesses are service-oriented. It is hard for us to get a loan unless you have an office in the ghetto. There is no reason for us to be in the ghetto. My offices is locate downtown. There are but a few of the problems minority females face in the business system, especially in doing business with the Federal Government.
SBA’s responsiveness to our problems has been minimal. First of all, there has been little, if any, total commitment tat the top to assist black and other minority female business owners. Individuals in the decisionmaking position, evidently, have not been sensitized to our needs, nor has there been much effort to improve the inequalities called to their attention by women.
We would like to go on record by saying the former associate administrator of the Office of Minority Enterprise, Mr. Connie Mack Higgins, was dedicated and committed to assisting all minorities, especially black females, but he was continuously “bucking” a disinterested group of nonminority administrators on a national and local level.
It is also our observation that little effort was made on the part of the administrator of the 8(a) program to provide opportunities for minority-female-owned firms to subcontract either by negotiating or otherwise. The Department of Defense, in particular, awarded nonminority owned firms most of its contracts, even those for recruiting and training females and minorities.
SBA has provided little assistance to minority females in their securing Government contracts. Instead, we have been informed to do our own marketing. The cost is prohibitive to make numerous trips across the country to attempt to market your services, when most of the contracts are “earmarked” before they are published in Commerce Daily or posted. Even if one is successful in securing contracts, there is the addition al cost of attending the briefing sessions, writing proposals, and in most cases due to the time limits hand-deliver the proposals to the contract office.
SBA works with the minority enterprise employees in most agencies, but there is little followthrough to see that the “program people” locate contracts or the review panel and contracting officers award contracts to minority females.
The SBA employees, most of whom have had little or no experience in the field of business ,evaluate unfairly the performance of minority female contractors. Most of them are male and nonminority. Efforts are used to get you out of the program instead of assisting you to increase your volume of business.
The agency’s guarantee loan program is primarily designed to provide moneys for those firms in the manufacturing fields, to assist them to purchase raw materials and machinery. This automatically means assisting males, because very few of us are in manufacturing business.
Our general recommendation is that the newly appointed Administrator read the recommendation of the Commission’s report and begin immediately implementing them. Whomever it is, they must have a total commitment to assist minority female-owned businesses, and become familiar with their potential from experience with them and not on the generalization that they are inferior.
The staffing of every department of SBA all over the country should have some black females in a policymaking position. This means regional offices as well.
It is our recommendation that a black female, who has had business experience, head a women’s division to deal primarily in the area of assisting women in doing business with the Government. The National Association of Minority women in Business encourages Federal agencies to recruit actively and to employ a larger proportion of minorities and women as contracting specialists, particularly in supervisory and policymaking jobs.
We would also like to recommend that a minority woman who has owned or does own a business be appointed to the SBA advisory board. To our knowledge there is not a black woman on the advisory board.
Our association strongly recommends that by fiscal year 1980 that at least 5 percent of the total dollar amount of all Federal contracts be awarded to minority females.
National Association of Minority Women in business also urges the SBA to reevaluate and revise its system of selecting contractors to be awarded contracts. There has been too much weight given to “experience” in name only, and not practical experience of a company as well as to staff qualifications.
The review panel for awarding contracts also should include black females.
Our group is greatly concerned with the slow-paying method of SBA and all Federal agencies for work performed. There should be a ceiling on the number of days to process a invoice. We as contractors are responsible to vendors, staff, consultants, et cetera, for promptly payment of expenses incurred, but have to wait months to be reimbursed by the government.
The National Association of Minority Women in Business’ position is that if all the present legislation that has been passed is properly enforced and the recommendations of the Civil Rights Commission on Minorites and Women a Government Contractors is implemented, we as a group would automatically increase our volume of businesses.
We wish to thank you for the opportunity to appear before your committee and share our observations as minority women in business — especially those of us who are black and as a result are double minorities. We are capable, qualified female owners of business and shall continue to work until we are accepted as our counterparts. We shall continue to manager our businesses until we become a viable part of the free enterprise system of our great country.
Source: Hearings Before the Subcommittee on Minority Enterprise and General Oversight of the Committee on Small Business, House of Representatives, Ninety-fifth Congress, First Session, Washington DC, April 5, May 24, and June 7, 1977 (Washington DC: US Government Printing Office) 1977, p. 34-38.