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.
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?
A year after Congress surprisingly eliminated WOSB self-certification, the SBA is asking for public comment on how to certify WOSBs.
In a notice published today, the SBA states that it intends to draft regulations to address the statutory change, but “seeks to understand what the public believes is the most appropriate way to structure a WOSB/EDWOSB certification program.”
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.