and appropriate statistical methods and data needed to help understand gender disparities in federal contracting. The workshop was held April 30-May 1, 2004; this report is based primarily on the workshop materials and discussion.
From our review of the data and methods used, we conclude that the disparity ratio estimates from the CAWBO preliminary study are not adequate to identify industries in which women-owned small businesses are underrepresented (or substantially underrepresented) in federal prime contracting. For that reason, the estimates should not be used to designate industries in which to permit the use of preferential contracting programs.
The CAWBO preliminary disparity ratio estimates were developed for industry categories (defined by 2-digit Standard Industrial Classification or SIC codes) by dividing the utilization share for each industry by the availability share. Utilization was defined as the share accruing to women-owned small businesses of the total dollar amount of contract actions for federal prime contracts over $25,000 in fiscal year 1999 for the particular industry. Availability was defined as the share of women-owned businesses with paid employees among all businesses with paid employees in the particular industry from the 1997 Survey of Women-Owned Business Enterprises.
We find the CAWBO study to be problematic in several respects, including that the documentation of data sources and estimation methods is inadequate for evaluation purposes. The CAWBO study does not provide sufficient justification for the definition and data used to measure the availability of women-owned small businesses. In particular, it does not adequately justify the decision to include in the availability measures all women-owned businesses with paid employees as “ready, willing, and able” to perform federal contracting, even though “ready, willing, and able” is the judicial standard that has been invoked in lawsuits against preferential contracting programs. In addition, the CAWBO study uses an inconsistent definition for the disparity ratio (comparing dollars of contract awards with numbers of businesses), different years for estimating utilization and availability in a period of rapid growth of women-owned small businesses, and 2-digit industry SIC categories instead of the more realistically delineated 3-digit or 4-digit categories in the newly devised North American Industry Classification System (NAICS). Finally, the CAWBO estimates, which pertain to the period 1997-1999, are now out of date.