Amidst the news cycle focusing on the government shutdown, there is some other action in the House of Representatives that recently caught our eye.
The House recently passed a bill called the “Expanding Contracting Opportunities for Small Businesses Act of 2019.” If the bill becomes law, we will see a dramatic expansion in the size of sole source contracts for SDVOSBs, WOSBs, and HUBZones.
Flash forward almost four years, and the SBA has not yet implemented a WOSB certification program. In fact, the SBA hasn’t even proposed rules to implement such a program. Instead, although the SBA continues to license a few third-party certifiers, the SBA also continues to say that WOSBs “can self-certify directly at certify.sba.gov by answering questions and uploading documents.”
So where the heck is the mysteriously missing SBA WOSB certification program? And is it even legal for the SBA to continue allowing WOSB self-certification?
Nearly 90% of women-owned small business sole source contracts reviewed by the SBA Office of Inspector General were improper, according to a startling report issued yesterday.
In the study, the SBA OIG concluded that because of pervasive flaws in the award of WOSB and EDWOSB sole source contracts, “there was no assurance that these contracts were awarded to firms that were eligible to receive sole-source awards under the Program.” And if that wasn’t enough, the SBA OIG reiterated its position that, as a legal matter, it is improper to award any WOSB or EDWOSB sole source contract to a self-certified company.
Under a multiple award contract, the underlying contract ordinarily governs whether a contractor qualifies as a woman-owned small business for purposes of task or delivery orders.
As demonstrated in a recent SBA Office of Hearings and Appeals decision, if a company qualifies as a WOSB or EDWOSB at the time of its initial offer on the underlying multiple-award contract, it will also qualify as a WOSB or EDWOSB for each order issued against the contract, unless the contracting officer requests recertification in connection with a particular order.
A self-certified woman-owned small business was ineligible for a WOSB set-aside contract because the woman owner’s husband held the company’s highest officer position and appeared to manage its day-to-day operations.
A recent SBA Office of Hearings and Appeals decision highlights the importance of ensuring that a woman be responsible for managing the day-to-day business of a WOSB–and that the woman’s role be reflected both in the corporate paperwork and in practice.
Woman-owned small business self-certifications (which the SBA still accepts more than 2 1/2 years after Congress eliminated it) may allow “potentially ineligible businesses” to win WOSB set-aside and sole source work, according to a fascinating new GAO report.
Among other things, the GAO report provides a comprehensive overview of the SBA’s progress addressing problems with the four major socioeconomic preference programs–8(a), SDVOSB, HUBZone and WOSB. And to its credit, the SBA has fixed a number of previously-identified flaws. But other problems remain, including the SBA’s now-longstanding failure to eliminate WOSB self-certification.
The government missed its Fiscal Year 2016 HUBZone goal by a country mile, and didn’t hit the 5% WOSB goal, either. But according to the SBA, the government deserves an “A” for its FY 2016 small business achievements.
That’s some rather generous scoring, wouldn’t you say?