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.
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 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 WOSB Program, 8(a) Program, and SBA affiliation rules were all on the agenda during my interview today with government contracts guru Mark Amtower on his popular radio show, Amtower Off-Center.
If you weren’t able to catch the show live, just click here to listen or download the audio from Federal News Radio. And be sure to tune in every week as Mark talks government contracts with movers and shakers from industry and government alike.
Of 34 WOSB and EDWOSB set-aside awards examined by the SBA Office of Inspector General, 15 of those awards were improper.
The SBA OIG’s conclusion comes in a new WOSB program report, and suggests that some Contracting Officers are unaware of the WOSB progran’s unique requirements, including the NAICS code limitations for WOSB and EDWOSB set-asides.
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.