The woman-owned small business program is in the midst of major changes: from the addition of sole source authority, to lingering questions about what the heck the SBA’s plan is to address the elimination of WOSB self-certification.
I recently joined host “Game Changers” podcast host Michael LeJune of Federal Access for an in-depth discussion of recent WOSB program changes, and where the WOSB program goes from here. Click here to listen to the podcast, and visit the Game Changers SoundCloud page for more great discussions with government contracting thought leaders.
The SBA has acknowledged that Congress eliminated WOSB self-certification in the 2015 NDAA–but suggests that WOSB self-certification may continue until the SBA adopts a regulatory framework for a formal certification program.
In a proposed rule released today, the SBA adopts a pragmatic approach that nonetheless may be legally problematic given that Congress did not authorize a continuation of WOSB self-certification pending SBA regulatory action.
With little fanfare, Congress just passed legislation eliminating the ability of WOSBs to self-certify for purposes of WOSB set-aside contracts.
The 2015 National Defense Authorization Act rewrites the portion of the Small Business Act governing WOSB set-asides, deleting what I have called the “trust but verify” option: the ability for putative WOSBs to self-certify as such, then back up their self-certifications by submitting supporting documentation to the WOSB Document Repository. Instead, the 2015 NDAA would appear to require a formal certification in order for a small business to be awarded a WOSB set-aside contract.
Only one percent of women-owned small business contract awards have come from WOSB or EDWOSB set-asides.
This disheartening finding was part of a recent GAO report on WOSB contracting, which finds that WOSB set-asides have had a “minimal effect” on agency awards to WOSBs and attainment of agency WOSB goals. The GAO report offers some insights on program changes that might increase the use of WOSB set-asides, including one major change that may already be in the works.
The SBA performs only “minimal oversight” of third-party certifiers for the woman-owned small business program, and thus “lacks reasonable assurance that only eligible businesses receive WOSB set-aside contracts,” says the GAO in a recent report on the WOSB Program.
The GAO report identifies numerous weaknesses in the WOSB certification system, and provides a number of recommendations to strengthen WOSB Program oversight.
False or incorrect women-owned small business self-certifications may be a significant government-wide problem, according to a recent audit report issued by the NASA Office of Inspector General.
The NASA OIG report states that in a study of sampled awards to self-certified WOSBs, 7 out of 20 awardees, or 35 percent, “may not have met the criteria for a woman-owned small business.” Noting that these firms won nearly $75 million in government business in 2010 alone, the NASA OIG has referred its report to the SBA and GAO, concerned about a “potential Government-wide effect of this condition.” Continue reading
Back in the ’80s, I spent many a weekday afternoon watching The Transformers (the cheesy original cartoons, not the abysmal movies that followed much more recently). The tagline of the show, which was about a bunch of robots that can transform into vehicles, was “more than meets the eye.”
“More than meets the eye” is also a good way to think about the requirements for the still relatively young women-owned small business program. Google the phrase “women-owned small business program requirements” and you’ll come up with any number of articles stating that a viable women-owned small business must be “at least 51% unconditionally owned and controlled” by women.
While this is certainly true, these articles rarely explain exactly what the SBA has in mind when it comes to “unconditional” ownership and control. Under the WOSB regulations, the truth, especially on the “control” front, may surprise you.