June 18, 2019

June 18, 2019

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June 17, 2019

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Big Changes Coming to the SBA’s Women-Owned Small Business Program

The SBA’s Women-Owned Small Business (WOSB) and Economically-Disadvantaged WOSB (EDWOSB) programs aim to promote women-owned businesses by providing them with more federal government contracting opportunities.  So far the program has not yet permitted agencies to award WOSB and EDWOSB contracts on a sole source basis.  However, that seems to be changing.

Under a proposed rule issued May 1st by the SBA, agencies will be permitted to award sole source contracts to WOSBs and EDWOSBs.  And, according to the SBA, the program will soon join the SBA’s 8(a) and HUBZone programs as “prequalification” programs, meaning that each company seeking the WOSB or EDWOSB status must apply for and be formally certified by the SBA prior to claiming the status in future solicitations.  The rule is only proposed at this point, which means that the current competition requirements are still in effect.

Sole Source Awards

Under the proposed rule, an agency may make a sole source award to a WOSB or EDWOSB where:

  1. the solicitation’s NAICS code is in an industry designated by the SBA as “underrepresented” or “substantially underrepresented” by women;
  2. the contracting officer expects only one WOSB/EDWOSB will submit an offer;
  3. the anticipated value of the contract (including options) will not exceed $6.5M for a manufacturing contract or $4M for any other contract;
  4. the contracting officer believes that the award can be made at a fair and reasonable price; and
  5. the contracting officer finds that the proposed awardee is a responsible contractor.

This new sole-source authority will be a very powerful tool for contracting officers to make contract awards to WOSBs and EDWOSBs under non-competitive circumstances.  Additionally, a competitor cannot file a formal WOSB/EDWOSB status protest in regards to a sole source award.

Certification

To qualify for WOSB or EDWOSB status, an entity must be a small business which is 51% unconditionally and directly owned and controlled by women (and that those women fall beneath certain net worth and income thresholds for EDWOSB status).

Historically, WOSB/EDWOSB companies have “self-certified” as to their status.  Now, the SBA has indicated that in the future, a company seeking WOSB or EDWOSB status must apply for and be formally certified prior to claiming the status in future solicitations.  However, the new proposed rule does not provide any details on the certification requirements, but the SBA merely noted that it will establish such requirements in subsequent rulemaking.

This new proposed rule is sure to boost the U.S. Government’s awards to WOSBs and EDWOSBs, but also the outside scrutiny of such companies.  While any company currently “self-certified” as a WOSB or EDWOSB should already be fully compliant with the program, many companies fall out of compliance due to ownership changes, changes in management, or other routine changes in operations.  Therefore, while we wait for the final SBA rules on sole source and certification, we recommend that all current WOSB and EDWOSB businesses ensure that their corporate documents and actual operations comply with the program’s rules. 

© 2019 Odin, Feldman & Pittleman, P.C.

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About this Author

Michelle DiCintio, Corporate, Tax and Finance Law, Odin Feldman
Shareholder

Michelle DiCintio’s practice focuses on assisting both established and early-stage companies in all types of transactions, including mergers and acquisitions, finance, commercial, and government contracting matters, as well as corporate governance, compliance and policy development and general employment issues.

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