Study Finds Underrepresentation of Women-Owned Small Businesses Depends on How Disparity Ratios Are Measured

Date: August 25, 2021

Women face a wider variety and a greater severity of challenges in starting and growing their business ventures than men. Difficulties obtaining government contracts represents one of the largest hurdles faced by women-owned firms. Congress approved the Women-Owned Small Business (WOSB) Federal Contracting Program to provide greater opportunities for small businesses to win federal contracts.

The Small Business Administration partnered with Optimal Solutions Group LLC (Optimal) to conduct a study that identified the industries in which WOSBs are underrepresented with respect to federal procurement contracting. Optimal used the disparity ratio approach, which measures the degree to which WOSBs are represented in proportion to their prevalence in the population of “ready, willing, and able” businesses. The disparity ratios were calculated by the number of contracts and the obligations of contracts. The evaluation also used secondary data sources, such as the Federal Procurement Data System, the System for Award Management, and calculations based on Census data for all firms in the United States.

Overall, the evaluation suggested that results regarding WOSBs’ disparity in federal procurement depend on how it is measured. The results revealed that WOSBs’ underrepresentation was greater when the disparity was measured with respect to the obligations of awards than for the number of awards. These results support the importance of using both measures of the disparity. Optimal recommends that future studies should develop interactive, near real-time decision support tools to provide detailed results for disparity metrics.  

Visit WOSB Federal Contracting Program for more information.


Optimal Solutions Group, LLC

Founded in 2000, Optimal Solutions Group, LLC, is a nonpartisan public policy research and technical assistance firm that stands out for its quantitative expertise and innovative approaches to provide rigorous, data-driven research and technical assistance to government agencies, corporations, nonprofit organizations, and philanthropic foundations. Located at the University of Maryland’s Discovery District in College Park, Optimal is a leader in driving real-time public policy research. Optimal has 60+ employees, including multidisciplinary researchers with backgrounds in economics, education, health, housing, sociology, statistics, information management and entrepreneurship. Optimal has four research centers—Health, Education, Housing and Workforce Development, and Social Policy—as well as an International Practice, Analytics Group, and Entrepreneurship and Innovation Center.