As a small business owner, you realize that business development is a necessary and essential part of your business. What better way to grow and develop your business than to expand into government contracting? By capitalizing on the small business set aside programs you can compete against only those businesses that are in your category. It sure beats competing against large businesses! That is exactly where today’s topic comes into play.
What is the Women-Owned Small Business program?
This federal set-aside program allows contracting officers to specifically limit certain requirements for competition solely amongst Women-Owned Small Businesses (WOSB) or Economically Disadvantaged Women-Owned Small Businesses (EDWOSB). If your business is owned and controlled by one or more women, then you may qualify for this program and can use this program as your business development strategy.
What is the Purpose of the WOSB program?
If you remember from previous episodes that the Federal government has established prime contracting and subcontracting goals to be awarded to small businesses. The government has set-aside 23% of prime contract dollars is to be awarded to small businesses, and 5% must be awarded to women-owned small businesses. That means that approximately $25 billion dollars will be set-aside just for women-owned small businesses.
Therefore, the purpose of this program is to enable contracting officers to meet these goals by limiting certain requirements for competition solely amongst women-owned small businesses or economically disadvantaged women-owned small business. Thus, ensuring a level playing field on which small businesses can compete for Federal contracting opportunities. Without these set-aside programs, all businesses large and small would compete against each other and it would be difficult for small businesses to flourish and win against larger companies. As small businesses are the most important cog in the United States economy without these set-aside programs the impact on not only small businesses, but our economy would suffer.
Who is responsible for the WOSB EDWOSB program?
The SBA is charged with the implementation and administering the program. SBA publishes regulations that provide the framework of the program, conducts eligibility examinations on WOSB and EDWOSBs, decides protests, conducts studies to determine eligible industries and works with other Federal agencies in assisting WOSBs and EDWOSBs. The Federal Acquisition Regulatory Council is responsible for implementing the procedures for procurement programs in the Federal Acquisition Regulations otherwise known as the FAR. The FAR is the governing document used by federal agencies to acquire goods and services for the federal government.
What requirements can be set aside under the WOSB program?
The contracting officer may set aside a requirement for the WOSB program if it meets these requirements:
- The North American Industry Classification Systems (NAICS) code assigned to the solicitation is in an industry in which SBA has designated the women-owned small businesses are substantially underrepresented. For a listing of underrepresented NAICS codes please go to SBA.gov.
- The contracting officer has a reasonable expectation that two or more Women-owned small businesses will submit offers, otherwise known as the “rule of two”.
- Anticipated award price of the contract does not exceed $5 million in the case of manufacturing contracts and $3 million in the case of all other contracts.
- Lastly, the contracting officer estimation that the contract can be awarded at a fair and reasonable price.
Now, what about the Economically Disadvantaged Women-Owned Small Business.
When can a contracting officer set aside a requirement for EDWOSBs?
Again, a contracting officer may set aside a requirement for EDWOSBs if the following is met:
- The NAICS code assigned to the solicitation is in an industry designated by SBA as underrepresented.
- There is a reasonable expectation by the contracting officer that two or more EDWOSBs will submit offers.
- Anticipated award price of the contract does not exceed $5 Million for manufacturing contracts and $3 million in the case of all other contracts.
- Lastly, the contracting officer estimation that the contract can be awarded at a fair and reasonable price.
As you can tell the basic requirements to set-aside a requirement for this program is not complicated. Now let’s make sure that you understand this program by reviewing some commonly asked questions.
Commonly Asked Questions
- Does the $3 million and $5 million anticipated award price of the contract include all options?
Answer: Yes
- Why are the thresholds for WOSB and EDWOSB program different from SBA’s other programs?
Answer: The statute authorizing the WOSB program set forth the specific thresholds. These thresholds are subject to periodic inflationary adjustment by the FAR Council.
- Does the contracting officer have to offer the requirement to SBA before setting it aside for the WOSB or EDWOSB program?
Answer: No
- Can a contracting officer award a sole source contract to a WOSB or EDWOSB under this program?
Answer: Generally, no, however, there could be exceptions to this that will not be discussed as part of this podcast.
- Does an EDWOSB qualify as a Socially and Economically Disadvantaged Small Business?
Answer: Only if the business is currently in the SBA’s 8(a) program.
- Is there a mentor protégé program?
Answer: Not at this time. There is the All Small Mentor-Protégé program for SBA’s small business programs and you can apply using this program.
- Where do I find requirements set aside for WOSBs or EDWOSBs?
Answer: The Federal Business Opportunities website (www.fbo.gov) will list federal solicitations that may be set aside for this program. The announcement and solicitation will state that the agency is limiting competition to either EDWOSB or WOSB eligible for the program. In addition, the solicitation should contain certain FAR clauses, which explain that it is a set aside for competition.
Certification Questions
- Does SBA certify my business into the program?
Answer: SBA does not certify companies into the program like it does the 8(a) BD and HUBZone programs.
- Is the WOSB/EDWOSB a self-certification program?
Answer: Yes, it is in part. W WOSB or EDWOSB must:
- Be certified by a Federal agency, a State government or a national certifying entity approved by the Administrator, as a small business concern owned and controlled by one or more women also known as a Third-Party Certifier. Or
- Certify to the contracting officer that it is a small business concern owned and controlled by women and provide adequate documentation, in accordance with the standards established by SBA to support the certification.
So, this all boils down to the following. A WOSB or EDWOSB can receive a certification from a Third-Party Certifier or self-certify its status. This is different from the other self-certification programs that we have discussed so far, such as the SDVOSB and small business.
- What is a Third-Party Certifier?
Answer: A third-party certifier is a Federal agency, a State government, or national certifying entity approved by the SBA Administrator to provide certifications of Women-Owned Small Businesses or Economically Disadvantaged Women-Owned Small Businesses. SBA maintains the listing of approved third-party certifiers on their website.
If you elect to use a third-party certifier then you will need to upload into SBA’s certify database a copy of your certification from the third-party certifier.
- How do I self-certify my status as a Women-Owned Small Businesses or Economically Disadvantaged Women-Owned Small Businesses?
Answer: In order to do business with the Federal Government you must first register your business in the System for Award Management (SAM.GOV). This is an online government owned and operated free web site that consolidates the capabilities in SAM, Online Representations and Certifications Applications (ORCA) and the Excluded Parties List System (EPLS). The second system that you have to register in is Certify. Certify (certify.sba.gov) is an SBA repository that is a secure, web-based environment that is accessible to the individual WOSBs and EDWOSBs, the contracting officer community and SBA. The contracting officer will be able to access the documents prior to contract award to review the submitted documents.
NOTE: The 2015 National Defense Authorization Act, eliminated the self-certification for WOSB program. However, SBA states that self-certification remains a viable option. What does this mean for the future of self-certification? At some point, SBA will have to comply with the statutory change. That means that all those businesses that self-certified may have to pay a third-party certifier to get certified unless SBA can come up with a way to get certified for free. You may want to take that into consideration as you develop your business development plan
- What documents do I need to upload into the repository?
Answer: Please see the show notes that have been included in this podcast for a detailed listing of documents.
- Is there a term limit to participate in this program?
Answer: No. As long as you remain eligible you can continue to participate in the program.
Let’s now talk about WOSB program eligibility.
Eligibility of Woman-Owned Small Business
First, let’s discuss the Woman-Owned Small Business eligibility requirements, then we will move on to the Economically-Disadvantaged Women-Owned Small Business requirements.
- The first requirement must be a small business
- The second requirement must be 51% unconditionally and directly owned and controlled by one or more women who are United States citizens.
- The woman must manage the day-to-day operations of the business.
- The women must make the long-term decisions for the business.
- The woman must be able to provide documents demonstrating she meets these requirements.
- A woman must hold the highest officer position in the concern.
Eligibility Questions
- What if my husband owns 50% and I own 50%
Answer: No. The woman or women must own at least 51% of the small business.
- What if I own 100% of a holding company, which owns 100% of the small business? Is that small business 100% owned by a woman?
Answer: No. The small business is owned by another company and is not directly owned by a woman. Therefore, it would not be eligible for the program.
- What if my company is 100% owned by an employee stock ownership plan and 51% of those employees are female? Does it qualify as Woman Owned Small Business?
Answer: No, the small business is not directly owned at least 51% by a woman or women.
- What kind of experience do I need to show to prove I run this WOSB?
Answer: The woman or women must have managerial experience of the extent and complexity needed to run the concern. The woman manager need not have the technical expertise or possess the required license to be found to control the concern if she can demonstrate that she has ultimate managerial and supervisory control over those who possess the required licenses or technical expertise. However, if a man possesses the required license and has an equity interest in the concern, he may be found to control the concern.
- What if I work at another job but manage my WOSB? I am a woman starting a small construction business while I work full-time at my current job at a construction firm. I spend all my nights and weekends working on my small business. Is my small business eligible?
Answer: No. The woman who holds the highest officer position of the concern must manage it on a full- time basis and devote full-time to the business concern during the normal working hours of business concerns in the same or similar line of business. The woman who holds the highest officer position may not engage in outside employment that prevents her from devoting sufficient time and attention to the daily affairs of the concern to control its management and daily business operations.
In this case, the normal working hours of your small business are the same hours that you spend working at your full-time job. You are not managing your small business on a full-time basis and devoting full-time to the business concern during its normal working hours and your outside job is preventing you from devoting sufficient time and attention to the daily affairs of the concern to control its management and daily business operations.
Economically Disadvantaged Woman-Owned Small Business Eligibility Requirements
- The first requirement must be a small business
- The second requirement must be 51% unconditionally and directly owned and controlled by one or more women who are economically disadvantaged and the United States citizens.
- The disadvantaged woman must manage the day-to-day operations of the business.
- The disadvantaged women must make the long-term decisions for the business.
- The disadvantaged woman must be able to provide documents demonstrating she meets these requirements.
- A disadvantaged woman must hold the highest officer position in the concern.
- The disadvantaged woman must meet certain thresholds for personal net worth, adjusted gross income and fair market value of all assets to be considered economically disadvantaged.
- A woman is presumed economically disadvantaged if she has a personal net worth of less than $750,000, excluding her ownership interest in the business and her equity interest in her primary personal residence, her adjusted gross yearly income averaged over the three preceding years does not exceed $350,000 and the fair market value of her assets including her primary residence and the value of the business concern does not exceed $6 million.
As a small business owner, it is your responsibility to ensure that you meet these requirements. As these podcasts are not covering the full program and only a portion of the program it is in your best interest to research the topic fully and if you have questions contact an expert in the field to guide you through the process. Much of today’s information was obtained from the SBA website and the Code of Federal Regulations.
If you meet the program requirements we hope that you will consider using this certification as a viable business development strategy.