Understanding Substantial Underrepresentation in Business Credit and Assistance
Definition & Meaning
Substantial underrepresentation refers to a significant disparity in the participation of women-owned small businesses (WOSBs) in federal contracting. Specifically, it is defined as a disparity ratio between 0.0 and 0.5. This ratio is calculated by dividing the share of federal prime contract dollars awarded to WOSBs by their share of total business receipts. A lower ratio indicates a higher level of underrepresentation.
Legal Use & context
This term is primarily used in the context of federal contracting and small business regulations. It is relevant to the Small Business Administration (SBA) and affects how federal contracts are awarded to women-owned businesses. Understanding substantial underrepresentation can help businesses navigate eligibility for federal assistance programs and contracting opportunities.
Real-world examples
Here are a couple of examples of abatement:
For instance, if women-owned businesses receive $100 million in federal contracts while their total business receipts are $500 million, the disparity ratio would be 0.2, indicating substantial underrepresentation.
(Hypothetical example) If a state reports that only 10 percent of its federal contracts go to WOSBs, while WOSBs represent 30 percent of total business receipts, this would also indicate substantial underrepresentation.
Relevant laws & statutes
Substantial underrepresentation is defined under 13 CFR 127.102, which outlines the Women-Owned Small Business Federal Contract Assistance Procedures. This regulation provides the framework for assessing eligibility and ensuring equitable access to federal contracts for women-owned businesses.