Women Owned Small Business Certification Changes for Government Contracting
By: Danielle DeSonia, Manager, Government Contractor Consulting Services
Every year federal agencies and the Small Business Administration (“SBA”) agree on small business contracting goals for each agency. These goals require each agency to direct a percentage of spending dollars to small business concerns and socioeconomic categories of small business, e.g., Economically Disadvantaged Women Owned Small Business (“EDWOSB”)/Women Owned Small Business (“WOSB”) concerns. The Federal government’s overall goal is to award at least five percent of all Federal government contracting dollars to EDWOSB/WOSB concerns. At first glance, five percent seems like a small figure. However, according to the FY18 Small Business Goaling Report, nearly $24 billon was awarded to WOSBs in FY18. Why not set yourself up to be eligible for a portion of that?
The rules of eligibility for the WOSB program are simple. Your business must be small in accordance with the SBA’s size standards. The size standards vary by type of economic activity or industry, generally under the North American Industry Classification System (“NAICS”). Depending on your primary NAICS code or industry, your business size will be determined based on the number of employees or the amount of annual receipts. The SBA provides a Size Standard Tool and a Table of Small Business Size Standards to assist business owners in determining their size eligibility. In addition to size, a WOSB must be at least 51 percent owned by a woman or women who are U.S. citizens. Lastly, the woman or women must both manage the day-to-day operations of the business and be the decision maker in long-term business decisions. In order to qualify as an EDWOSB concern, there are several additional requirements that must be met. You can read more about those on the SBA website or in the Electronic Code of Federal Regulations (“eCFR”) at Title 13 Part 127 Subpart B.
If you meet all the requirements to be an EDWOSB/WOSB, the next step is to get certified. Currently, you are able to self-certify for both the WOSB and EDWOSB programs. However, in accordance with the 2015 National Defense Authorization Act (“NDAA”), beginning July 15, 2020 the self-certification option will no longer be available. Companies will then be required to obtain certification directly through the SBA or through an approved third-party entity. Certification through the SBA is a free service. If SBA determines that the concern is a qualified WOSB or EDWOSB, it will issue a letter of certification and designate the concern as a certified WOSB or EDWOSB on the Dynamic Small Business Search (“DSBS”) system, or successor system.
If you choose to go the third-party certification route, it is important to note that there are currently only four organizations approved by the SBA to provide certification. Once certified by an approved third-party organization, you will still be required to provide proof of certification through the SBA certification website. If you are certified before July 15, 2020, you will be required to renew your account after that date. Both methods require you to use the SBAs certification website which will require you to set-up a company profile in the System for Award Management website (SAM.gov). There is no cost to register with SAM.gov, however your registration must be renewed on an annual basis. The SBA provides a certification options table, which compares “pre-rule” and “post-rule” options for new WOSB applicants.
For questions on determining if your company qualifies for the WOSB or EDWOSB program or on the changes to the certification process, contact Cherry Bekaert for advice and assistance.