New Woman Owned Small Business (WOSB) Rule Is In Effect – WOSBs Should Seek Certification Now To Remain Eligible To Compete For Set Aside Contracts

On July 15, 2020, the Small Business Administration (SBA) began accepting applications under its new certification process for WOSBs.  The new process also applies to Economically Disadvantaged WOSBs.  As discussed in our prior article by Pat Meagher, SBA changed the rules for the WOSB and EDWOSB programs to require certification in order for those firms to compete for set aside contracts.   

WOSB and EDWOSB Program Eligibility

The government has a statutory goal to award 5 percent of all prime contracting dollars to WOSBs.  To be eligible for the WOSB program, a business must: be a small business; be at least 51 percent owned and controlled by women who are U.S. citizens; and must have women manage day-to-day operations and also make long-term decisions.  To qualify as an EDWOSB, a business must: meet all the requirements of the women’s contracting program; be owned and controlled by one or more women, each with a personal net worth less than $750,000; 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 be owned and controlled by one or more women, each $6 million or less in personal assets.  

New Certification Requirements Are Now Effective

Firms were previously permitted to self-certify to the WOSB requirements, but SBA had faced criticism that up to 40 percent of firms receiving awards were improperly certified.  Congress eliminated the ability of firms to self-certify eligibility for the WOSB program as part of the 2015 National Defense Authorization Act (NDAA), Public Law 113-291.  To comply with the 2015 NDAA, SBA published its final certification rule in May, 2020.  Under the new rule, certification will be required in order WOSB for entities to compete for set-aside contracts and task orders.  

WOSBs can submit applications for certification to https://beta.certify.sba.gov/.   WOSBs can also seek certification through approved third parties, and SBA will also accept 8(a) certifications and CVE certifications from the U.S. Department of Veterans Affairs.  Currently, there are four organizations that are approved by the SBA to provide third-party certification: the El Paso Hispanic Chamber of Commerce; the National Women Business Owners Corporation; the U.S. Women’s Chamber of Commerce; and the Women’s Business Enterprise National Council.  

Firms wishing to use their 8(a) certification must upload their most recent annual review letter to https://beta.certify.sba.gov/, or their 8(a) acceptance letter if the firm is in their first program year.  Any firm wishing to use their CVE certification must upload their certificate and the supporting documentation confirming that it is owned and controlled by one or more women.  

Effect on Existing Contracts

Firms that previously relied on self-certification and now hold active contracts based on that certification will continue to be considered eligible as a WOSB for the life of the contract, provided they were eligible as a WOSB at the time of the offer.  Firms may continue to self-certify for offers for set-aside contracts and task orders until October 15, 2020.  Any self-certifications on multi-year contracts longer than five years will require certification under the new rule prior to the end of the fifth year of the contract.  

Offers on Set Aside Contracts After October 15, 2020 Will Require Certification

On October 15, 2020, SBA will begin issuing decisions on certification.  Firms that do not certify may continue to receive awards outside of the WOSB and EDWOSB programs, and their self-certifications may still count toward an agency’s goal for awards to WOSBs.  But after October 15, 2020, firms that have not certified through one of the approved methods will no longer be eligible to compete for new set-aside contracts or task orders.  

The new rule contains a provision allowing contracting officers to request an SBA determination if a firm has submitted an application for certification, but the certification is still pending at the time an offeror is selected for award.  However, if that determination is not received from the SBA within 15 calendar days, he contracting officer may presume that the apparently successful offeror is not an eligible WOSB or EDWOSB.  Additionally any award received by a firm that has not properly certified will be subject to protest risk.  Many firms will be seeking to complete the certification process to remain eligible for set-aside awards.  To avoid certification delays that could jeopardize the ability to compete for set-aside contracts and task orders, firms should begin the certification process now.