HOUSINGWIRE MAGAZINE / DECEMBER 2010

TALCOTT FRANKLIN: AT THE CENTER OF THE MORTGAGE BUYBACK BATTLE

HOUSINGWIRE EXCLUSIVE

LIGHTING
THE WAY
While private capital remains dark,
FHA Commissioner DAVID STEVENS and
Chief Risk Officer BOB RYAN are charting
a path toward the future of housing finance
PAGE 54

T H E P U B L I C AT I O N F O R M O R T G A G E L E N D I N G, S E R V I C I N G A N D I N V E S T M E N T P R O F E S S I O N A L S
 servicingmanagement
Dodd-Frank could be boost
for women business owners
Act expected to increase federal contracting opportunities
BY DESIREE PATNO
OVER THE YEARS, there have been directives, set asides
PATNO
and legislation specifically written for women business
owners to overcome decades of underutilization in federal
contracting. Women business owners must work harder
and smarter to begin to realize or benefit from what is prom-
ised in terms of contracts for women-owned businesses.
As far as glass ceilings go, 5% is a discouragingly low
target for the percentage of federal contracts going to wom-
en-owned businesses when you consider women start new
businesses at twice the rate of men and own or control 40%
of all U.S. small businesses.
“Companies within 50 miles of the White House earn
nearly $1 of every $3 in federal contracts given to small
firms,” according to a 2008 Associated Press article. Unfor-
tunately, there is currently no mechanism encouraging bal-
anced geographic awards to small businesses.
Small businesses, and the women, minorities, veterans
and disabled veterans behind them, deserve renewed atten-
tion. One of Dodd-Frank’s positive components is the effect
its implementation will have on the inclusion of minorities
and women, with the addition of the Office of Minority and
Women Inclusion, or OMWI, among key federal agencies
such as the Treasury, the Federal Deposit Insurance Corp.
and the Federal Housing Finance Agency. All told, 20 Offices
of Minority and Women Inclusion must be up and running
by January 2011. The main underlying issue for women-
owned businesses is the definition of WOB utilization, as
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the bill falls short of establishing a quota system and does
not give clear guidance in terms of goal-setting. At this time,
there appears to be no mandate or minimum requirements.
The interpretation and ultimate enforcement will be up to
that governing agency and will lead to lack of uniformity
in how the set-asides are enforced. Some level of standard-
ization is required to build a quality, representative ratio
growth of women-owned businesses.
PROVISION 342
Provision 342 of Dodd-Frank outlines the role the OMWI
will play in each federal agency and the on-going responsi-
bilities within the OMWI.
Dodd-Frank will require that federal institutions meet a
standard for including minority- and women-owned busi-
nesses in prime and subcontracting opportunities.
For example, the office’s responsibility to develop and
implement procedures “to ensure, to the maximum extent
possible, the fair inclusion and utilization of minorities,
women and minority-owned and women-owned businesses
in all business activities of the agency at all levels, includ-
ing procurement, insurance and all types of contracts.” It is
unclear how the language “maximum extent possible” will
be interpreted at each institution.
For one interpretation, we look to 1972’s Title IX, the civ-
il rights amendment dealing with varsity athletic opportu-
nities for male and female undergraduates. The prevailing
 interpretation of Title IX dictates that if 40% of a universi-
ty’s population is female, then a corresponding percentage
of varsity sports slots be reserved for women. The precedent
of Title IX could suggest a way forward for all types of fi-
nancial institutions and related businesses looking for an
acceptable interpretation of the provision’s language.
Taking it one step further, the provision mandates that
“for review and evaluation of contract proposals and for
hiring service providers ... a component that gives consid-
eration to the diversity of the applicant” must be included.
This includes the work force, not just the ownership, of sub
and prime contractors.
If a prime contractor or other service provider is deemed
to have failed in its efforts to “make a good faith effort” to
fairly include women and minorities as subcontractors, the
director of the OMWI office can recommend that the con-
tract be terminated. While a recommendation can be made,
the OMWI director won’t have the power to actually ter-
minate any contract, nor is there any mechanism to ensure
that contracts will be terminated and re-awarded if good-
faith efforts at inclusion aren’t met.
Women-owned businesses will be faced with different
mandates at 20 institutions, particularly in the case of the
Federal Reserve. The board of governors of the Fed will cre-
ate its own OMWI but so will its 12 regional offices.
Women business owners have been historically, and re-
main today, at a disadvantage when seeking to do business
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with the federal government. The government has been
slow to implement powerful and enforceable legislation
guaranteeing access to women-owned businesses.
The 2000 Women’s Procurement Act, passed 10 years
ago, was designed to create an avenue for women business
owners to compete fairly for government contracts, but it
wasn’t for implementation until after October’s issuance of
a final rule. February 2011 will mark the long overdue be-
ginning of this program.
Women business owners must bear the brunt of edu-
cating themselves on the process and the opportunities —
taking full advantage of teaming arrangements with other
creative partnerships that will give their businesses the
scope and weight necessary for competition in the federal
marketplace.
The success of Provision 342 will depend directly on
the degree to which women business owners educate them-
selves and how they make the most of the opportunity — in
addition to the standardization of its implementation.
Women business owners must unite more than ever and
become advocates for the standardization of how the Dodd-
Frank provisions are implemented.
Desiree Patno is the founder and president of the National Asso-
ciation of Women REO Brokerages. NAWRB represents women
business owners and is the only provider of women-owned busi-
ness certification in Distressed Services.