Women-Owned Small Businesses

Posted on August 25, 2020 Socio-economic Policies

The Small Business Administration’s (SBA) Women-Owned Small Business (WOSB) Federal Contracting Program is designed to provide greater access to federal contracting opportunities for WOSBs and economically disadvantaged women-owned small businesses (EDWOSBs).

To participate in the program, WOSBs must

  • be a small business (as defined by the SBA);
  • be at least 51% unconditionally and directly owned and controlled by one or more women who are U.S. citizens;
  • have women manage day-to-day operations and make long-term decisions; and
  • be certified by a federal agency, a state government, the SBA, or a national certifying entity approved by the SBA.

EDWOSBs must (1) meet all the requirements of the WOSB contracting program; (2) be owned and controlled by one or more women, each with a personal net worth less than $750,000; (3) be owned and controlled by one or more women, each with $350,000 or less in adjusted gross income averaged over the previous three years; and (4) be owned and controlled by one or more women, each having $6 million or less in personal assets (including business value and primary residence).

First, WOSBs get all the same benefits that small businesses do, such as the right to bid for a small-business set-aside contract. But the program offers other unique benefits. Under this program, federal contracting officers may set aside federal contracts (or orders) for WOSBs (including EDWOSBs) in industries in which the SBA determines WOSBs are substantially underrepresented in federal procurement and for EDWOSBs exclusively in industries in which the SBA determines WOSBs are underrepresented in federal procurement. The SBA has identified 364 six-digit North American Industry Classification System (NAICS) industry codes (out of 1,023) in which federal agencies may set aside federal contracts exclusively for WOSBs (including EDWOSBs) and 80 six-digit NAICS industry codes (out of 1,023) that may be set aside exclusively for EDWOSBs.

Federal agencies may also award sole source contracts to WOSBs and EDWOSBs in eligible industries under the following conditions: the contracting officer does not have a reasonable expectation that offers would be received by two or more eligible WOSBs and EDWOSBs; the award can be made at a fair and reasonable price; and the anticipated total value of the contract, including any options, is below $4 million ($6.5 million for manufacturing contracts). Finally, the SBA’s Office of Women’s Business Ownership offers WOSB-specific resources to help WOSBs grow, such as business training and counseling.

The WOSB program’s legislative history is a bit more complicated than other small business contracting programs, primarily due to the distinctions between WOSBs and EDWOSBs and among underrepresented, substantially underrepresented, and other NAICS codes. These distinctions were designed to shield the WOSB program from legal challenges related to the heightened level of legal scrutiny applied to contracting preferences after the Supreme Court’s decision in Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995), which involved contracting preferences for small disadvantaged businesses. The Court found in that case that all racial classifications, whether imposed by federal, state, or local authorities, must pass strict scrutiny review. Id. at 232-237.

Starting on July 15, 2020, the certification process for WOSBs and EDWOSBs will begin to change as SBA implements Congress’ changes to the WOSB Federal Contracting Program, as put forth in the 2015 National Defense Authorization Act (NDAA). These new regulations make it easier for qualified small businesses to participate in the WOSB Federal Contracting Program by improving the customer experience. At the same time, the SBA is strengthening oversight and maintaining the integrity of the certification process. Once the new WOSB Federal Contracting Program regulations go into effect, the SBA will:

  • SBA will provide a new, free online certification process for WOSBs and EDWOSBs.
  • SBA will allow participation from firms certified by the U.S. Department of Veterans Affairs Center of Verification and Evaluations, provided they meet all eligibility requirements.
  • SBA will allow continued participation from businesses that utilize approved ThirdParty Certifiers (TPC) to obtain WOSB or EDWOSB certification.
  • SBA will eliminate the current selfcertification option from certify.sba.gov, effective October 15, 2020.

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