{"id":1496,"date":"2013-11-04T23:57:01","date_gmt":"2013-11-05T04:57:01","guid":{"rendered":"http:\/\/www3.law.harvard.edu\/journals\/jol\/?p=1496"},"modified":"2018-08-28T23:16:25","modified_gmt":"2018-08-29T03:16:25","slug":"rosie-the-riveter-cuts-the-cap","status":"publish","type":"post","link":"https:\/\/journals.law.harvard.edu\/jol\/2013\/11\/04\/rosie-the-riveter-cuts-the-cap\/","title":{"rendered":"Rosie the Riveter Cuts the Cap"},"content":{"rendered":"

Rosie the Riveter Cuts the Cap<\/strong><\/p>\n

Jenna Tynan<\/strong>[*]<\/a><\/p>\n

 <\/p>\n

This year, Harvard Business School celebrates the 50th anniversary of its first coed class.[2]<\/a>\u00a0This effort to break gender barriers in education was just one piece of the greater movement (advanced through direct action, judicial decisions, and legislation) to enhance the status of women in the business community.\u00a0The next legislative advance for female entrepreneurs comes from an unlikely source: The National Defense Authorization Act of 2013 (NDAA).[3]<\/a><\/p>\n

The specific provision in the 600-plus-page document eliminates caps on contracts set aside for Women-Owned Small Businesses (WOSB) and Economically Disadvantaged Women-Owned Small Businesses (EDWOSB).\u00a0Previously, contracting officers could only set aside contracts valued less than $6.5 million for manufacturing and $4 million for all other industries.\u00a0Proponents believe that government agencies will be in a better position to meet the statutory goal of WOSBs representing no less than 5% of federal contracting and subcontracting revenue.[4]<\/a>\u00a0But should women business owners celebrate because the NDAA has cut the cap?<\/p>\n

The legislation provides an example of how the law of unintended consequences may thwart otherwise favorable efforts.\u00a0The legislative history itself fails to indicate dubious intentions: Senator Olympia Snowe (R-Me.) proposed the amendment, which was co-sponsored by six senators (Democrats and Republicans, male and female).[5]<\/a>\u00a0However, this change may not favor female small business-owners as expected.\u00a0First, the number of contracts set aside for women-owned small business concerns may dwindle as agencies meet representation goals with a few big-ticket procurements.\u00a0In essence, the same amount of contracting funds may become concentrated in a few WOSBs.\u00a0If these businesses remain under revenue thresholds for their procurement category, a WOSB oligopoly could ensue, thereby restricting the competition the amendment sought to enhance.\u00a0However, considering the practical context of government procurement, this result is highly unlikely to occur: \u201csmall business\u201d definitions prevent, perhaps imperfectly, such concentration.<\/p>\n

The more interesting result involves an ancillary amendment in the NDAA that changes how subcontracting is calculated for \u201csimilarly situated entities.\u201d[6]<\/a>\u00a0Small business \u201cset aside\u201d contractors generally cannot subcontract out more than 50% of a contract\u2019s value.\u00a0However, the amendment now treats activities subcontracted to \u201csimilarly situated entities\u201d (i.e. other women-owned businesses) as \u201cprime activities\u201d (i.e. not subcontracted) for purposes of the threshold.\u00a0What\u2019s the issue?\u00a0Assume Rosie Rivets (a WOSB) wins a $10 million contract, but that Rosie Rivets subcontracts 70% of the project to Betty Builders (another WOSB).\u00a0There\u2019s no problem yet, as both contractors are promoting the legislation\u2019s goals.\u00a0Now assume that Betty Builders subcontracts out 90% of its tasks to Big Boys, a standard company (i.e. not a small business and not women-owned).\u00a0Because the amount contracted to Betty Builders is treated as \u201cprime\u201d no subcontracting flag is raised.\u00a0 As a result, Rosie Rivets walks away with $3 million in revenue, Betty Builder with $700,000 and Big Boy\u2019s wins the lion\u2019s share of $6.3 million.<\/p>\n

Many protections against this type of gaming do exist. For example, contracting officers are not impelled<\/em> but merely allowed<\/em> to set aside higher contracts.\u00a0Moreover, procurement regulations and\/or the fact that economic benefits from the arrangement would be minimal may further restrict gaming on the behalf of larger contractors.\u00a0Thus, well-intentioned legislation may result in unexpected consequences, but for now, Rosie has indeed cut the cap.<\/p>\n

\n

[*]<\/a> J.D. Candidate, Harvard Law School, 2016.<\/p>\n

[2]<\/a> 50 Years of Women in the MBA Program<\/em>, Harvard Business School (last updated Apr. 17, 2013), http:\/\/www.hbs.edu\/women50\/ [https:\/\/perma.cc\/GU4S-3VRT].<\/p>\n

[3]<\/a> National Defense Authorization Act for Fiscal Year 2013 (\u201cNDAA\u201d), Pub. L. 112\u2013239, 126 Stat. 1632.<\/p>\n

[4]<\/a> See<\/em> Press Release, United States Small Business Administration, SBA Announces Changes to Contracting Program For Women-Owned Small Businesses (Jan. 17, 2013), https:\/\/www.sba.gov\/about-sba\/sba-newsroom\/press-releases-media-advisories\/sba-announces-changes-contracting-program-women-owned-small-businesses [https:\/\/perma.cc\/7GVP-CNRA].<\/p>\n

[5]<\/a> See<\/em> S. Amdt. 3218, 112th Cong. (2012) (agreed to in Senate by voice vote, Dec. 3, 2012).<\/p>\n

[6]<\/a> See<\/em> NDAA \u00a7 1651(e)(2)(C), 126 Stat. at 2081 (2013) (codified as amended at 15 U.S.C. \u00a7 657s).<\/p>\n","protected":false},"excerpt":{"rendered":"

Rosie the Riveter Cuts the Cap Jenna Tynan[*]   This year, Harvard Business School celebrates the 50th anniversary of its […]<\/p>\n","protected":false},"author":1,"featured_media":1499,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2,27,28],"tags":[11],"class_list":["post-1496","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-jol-commentary","category-jol-online","tag-featured-2"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/journals.law.harvard.edu\/jol\/wp-content\/uploads\/sites\/86\/2013\/11\/We_Can_Do_It1.jpg?fit=1000%2C1294&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/peZQ7o-o8","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/journals.law.harvard.edu\/jol\/wp-json\/wp\/v2\/posts\/1496","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/journals.law.harvard.edu\/jol\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/journals.law.harvard.edu\/jol\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/jol\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/jol\/wp-json\/wp\/v2\/comments?post=1496"}],"version-history":[{"count":0,"href":"https:\/\/journals.law.harvard.edu\/jol\/wp-json\/wp\/v2\/posts\/1496\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/jol\/wp-json\/wp\/v2\/media\/1499"}],"wp:attachment":[{"href":"https:\/\/journals.law.harvard.edu\/jol\/wp-json\/wp\/v2\/media?parent=1496"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/jol\/wp-json\/wp\/v2\/categories?post=1496"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/jol\/wp-json\/wp\/v2\/tags?post=1496"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}