SBA releases final women-owned small business rule
With the publication recently of a final rule in the Federal Register, the U.S. Small Business Administration will begin implementation of its women-owned small business (WOSB) contracting program. The agency expects the program to be available for WOSBs in early 2011.
- To be eligible, a firm must be 51 percent owned and controlled by one or more women, and primarily managed by one or more women. The women must be U.S. citizens. The firm must be small in its primary industry in accordance with SBA's size standards for that industry. In order for a WOSB to be deemed economically disadvantaged, its owners must demonstrate economic disadvantage in accordance with the requirements set forth in the final rule.
- Based upon the analysis in a study commissioned by the SBA from the Kauffman-RAND Foundation, the final rule identifies 83 industries (identified by NAICS codes) in which women-owned small businesses are under-represented or substantially under-represented in federal procurements.
- The SBA has identified eligible industries based upon the combination of both the "share of contracting dollars" analysis, as well as the "share of number of contracts awarded" analysis used in the RAND study. This differs from an earlier proposed version of the rule which identified only four industries in which women-owned small businesses were under-represented. This earlier version proposed to identify eligible industries based solely on the "share of contracting dollars" analysis used in the RAND study.
- In accordance with the statute, the final rule authorizes a set-aside of federal contracts for WOSBs where the anticipated contract price does not exceed $5 million in the case of manufacturing contracts and $3 million in the case of other contracts. Contracts with values in excess of these limits are not subject to set-aside under this program.
- The final rule removes the requirement, set forth in a prior proposed version, that each federal agency certify that it had engaged in discrimination against women-owned small businesses in order for the program to apply to contracting by that agency.
- The proposed rule allows women-owned small businesses to self-certify as WOSBs or to be certified by third-party certifiers, including government entities and private certification groups.
- The final rule requires WOSBs which self-certify to submit a robust certification verification, to complete the certifications at the federal Online Representation and Certification Application (ORCA) Web site, and also to submit a core set of eligibility-related documents to an online document repository to be maintained by the SBA. Each agency's contracting officers will have full access to this repository.
- The SBA intends to engage in a significant number of program examinations to confirm eligibility of individual WOSBs.
- In the event of a contract protest or program review, the SBA has the authority to request substantial additional documentation from the WOSB to establish eligibility.
- SBA intends to pursue vigorously punitive action against ineligible firms which seek to take advantage of this program and in so doing to deny its benefits to the intended legitimate WOSBs.