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Sole Source Authority for Women-Owned Small Businesses

Effective October 14, 2015, federal contracting officers are permitted to award sole source contracts to WOSBs and EDWOSBs.  The objectives of this final rule are to put the SBA’s Women-Owned Small Business (WOSB) and Economically-Disadvantaged WOSB (EDWOSB) programs on a level playing field with other SBA government contracting programs with sole source authority, and to provide an additional tool for government agencies to meet the statutorily mandated 5% prime contracting goal for WOSBs.

It is important to note that the sole source authority can only be used where a contracting officer conducts market research in an industry where a WOSB/EDWOSB set-aside is authorized.

Sole Source Awards

Under the new rule, a contracting officer may make a sole source award to a WOSB or EDWOSB in limited cases where the contracting officer conducts market research and determines that:

  1. the solicitation’s NAICS code is in an industry where a WOSB or EDWOSB set-aside is already authorized (designated by the SBA as “underrepresented” for EDWOSBs or “substantially underrepresented” for WOSBs by women);

  2. there is only one WOSB/EDWOSB likely to submit an offer that can perform the work;

  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 award can be made at a fair and reasonable price; and

  5. the proposed awardee is a responsible contractor.

Additionally, a competitor cannot file a formal WOSB/EDWOSB status protest in regards to a sole source award.  Only the contracting officer or the SBA can protest.

Clearly this new sole-source authority could be a very powerful tool for contracting officers to make contract awards to WOSBs and EDWOSBs under non-competitive circumstances.  However, the fact that not all industries (NAICS codes) qualify for the program, and that the contracting officer has to determine that only one WOSB/EDWOSB can perform the solicitation requirements, are going to limit significantly the use of this new sole-source authority.  Although the SBA is to be commended on helping to level the playing field for women-owned small businesses, considering that contracting officers can currently set aside work in all NAICS codes for every other SBA small business set-aside program (i.e., SDVOSB, HUBZone and 8(a)), it is a shame that the SBA did not allow contracting officers to set-aside contracts to women owned businesses in every NAICS code utilized by federal government procurement officials.

Certification Process

Also of note, in an effort to implement the WOSB and EDWOSB sole source authority promptly, the SBA’s new rule did not address the 2015 National Defense Authorization Act’s requirement for WOSB and EDWOSB certification, but rather indicated that it would do so through a separate future rulemaking.  The SBA received significant comments regarding the certification process, so WOSB, EDWOSB, and contracting officers should anticipate significant changes to the current WOSB/EDWOSB certification process in the future.

© 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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