The SBA has launched a new WOSB portal to help women-owned businesses better manage the WOSB self-certification process–even though Congress eliminated the statutory authority for self-certification more than a year ago.
The SBA apparently was caught off guard by Congress’s action, but I don’t understand why the SBA is spending time and resources to improve a prohibited self-certification mechanism. While the SBA continues to state that WOSB self-certification remains valid indefinitely, the SBA has yet to answer what should be a simple question: what the heck is the legal justification for continuing to promote a self-certification mechanism that Congress has explicitly eliminated?
On March 24, 2016, the SBA launched a modernized website, certify.SBA.gov, which takes the place of the previous WOSB document repository. According to the SBA’s WOSB Program website, as of March 24, “all WOSB Program requirements will be managed through certify.SBA.gov.” All WOSB Program participants are required to create a user account on the new website. WOSBs and EDWOSBs can then use the website to upload third-party certification documents, or the forms required for WOSB self-certification.
During the transition to certify.SBA.gov, the WOSB Document Repository will be unavailable, perhaps “for several weeks.” While the Repository is down, “SBA will review the Repository on behalf of” a Contracting Officer. The SBA’s WOSB Program website provides instructions for Contracting Officers to contact the SBA and request such a review.
As for self-certification, the WOSB Program website leaves no doubt where SBA stands: “[n]ote,” it reads, “as self-certification is still permitted while SBA develops new criteria, this modernized site supports those decisions.” But what is the legal rationale for continuing to allow self-certification? The SBA doesn’t say.
Let’s briefly review the facts. The Small Business Act used to provide that a company could qualify for a WOSB set-aside contract in two ways: either by formal certification, or by self-certification accompanied by the submission of documents backing that certification. But since December 19, 2014, the Small Business Act has provided only one way to qualify for a WOSB set-aside contract: formal certification. Congress intentionally and explicitly deleted the self-certification option.
That brings me to three general legal principles. First, when a statute conflicts with a regulation, the statute governs. Second, while an executive agency like the SBA has the power to interpret relevant statutes, an executive agency cannot “interpret” a statute in a manner that conflicts with Congress’s intent. And third, unless Congress specifies a different date, a statute ordinarily is effective immediately upon enactment.
Applying these general principles to the 2015 NDAA leads me to believe that WOSB self-certification likely has been invalid since December 2014. Certainly, the underlying statute–the Small Business Act–no longer allows WOSB self-certification. The SBA has the power to interpret the Small Business Act, but not in a manner that conflicts with the statute. The SBA’s current interpretation seems to be at direct odds with the will of Congress, which deleted the very self-certification mechanism the SBA is still promoting. And although it would have been wise for Congress to give the SBA time to respond to the change, it did not do so; the 2015 NDAA does not provide for any delay in the elimination of WOSB self-certification.
In my view, instead of investing time and resources modernizing a database used primarily for self-certification, the SBA would be better served responding to the 2015 NDAA–such as by implementing an internal SBA certification program or expanding third-party certification to other entities. And in the meantime, if the SBA is going to continue asserting that WOSB self-certification is still valid, the SBA should explain its legal rationale for that assertion. Because if the SBA is wrong, eventually that mistake will come back to bite WOSBs and EDWOSBs.