Defense Act causes SBA to lift dollar limits on WOSB set-asides

Women-owned small businesses will have greater access to federal contracting opportunities as a result of changes included in the National Defense Authorization Act of 2013 (NDAA) to the U.S. Small Business Administration’s Women-Owned Small Business Federal Contract Program.

“This new law is a prime example of how the Obama Administration is embracing a more inclusive view of entrepreneurship, helping small businesses and America succeed,” said SBA Administrator Karen Mills. “Today, women own 30 percent of all small businesses up from just 5 percent 40 years ago. As one of the fastest growing sectors of small business owners in the country, opening the door for women to compete for more federal contracts is a win-win.”

The NDAA removes the anticipated award price of the contract thresholds for women-owned small businesses (WOSB) and economically disadvantaged women-owned small businesses (EDWOSB) to allow them greater access to federal contracting opportunities without limitations to the size of the contract. Prior to the new law, the anticipated award price of the contract for women-owned and economically disadvantaged women-owned small businesses could not exceed $6.5 million for manufacturing contracts and $4 million for all other contracts.

The Women’s Federal Contract Program allows contracting officers to set aside specific contracts for certified WOSBs and EDWOSBs and will help federal agencies achieve the existing statutory goal of five percent of federal contracting dollars being awarded to WOSBs.

The law also requires the SBA to conduct another study to identify and report industries underrepresented by women-owned small businesses. As a result, more eligible women-owned businesses may be able to participate in SBA’s Women’s Federal Contract Program and compete for and win federal contracts.

These changes have not yet taken effect.  The SBA is working with the Office of Federal Procurement Policy under the President’s Office of Management and Budget on the implementation including changes to the Federal Acquisition Regulations.

Every firm that wishes to participate in the WOSB program must meet the eligibility requirements and either self-certify or obtain third party certification. There are four approved third-party certifiers that perform eligibility exams: El Paso Hispanic Chamber of Commerce, National Women Business Owners Corporation, U.S. Women’s Chamber of Commerce, and the Women’s Business Enterprise National Council. Additional information and links about approved third-party certifiers are available at www.sba.gov/wosb. To qualify as a WOSB, a firm must be at least fifty-one percent owned and controlled by one or more women, and primarily managed by one or more women. The women must be U.S. citizens and the firm must be considered small according to SBA size standards. To be deemed “economically disadvantaged,” a firm’s owners must meet specific financial requirements set forth in the program regulations.

The WOSB Program identifies eighty-three four-digit North American Industry Classification Systems (NAICS) codes where WOSBs are underrepresented or substantially underrepresented. Contracting officers may set aside contracts in these industries if the contract can be awarded at a fair and reasonable price and the contracting officer has a reasonable expectation that two or more WOSBs or EDWOSBs will submit offers for the contract.

For more information on the Women-Owned Small Business Program or to access the instructions, applications or database, please visit www.sba.gov/wosb.

COs must verify WOSB/EDWOSB status independent of SAM info

Ever since last year’s launch of the System for Award Management (SAM) — the federal database that replaced Central Contractor Registration (CCR) – there have been a myriad of problems involving system stability, data entry by vendors, access by users, and data migration from CCR to SAM.  Over time, some of these issues have been resolved.  However, new problems have arisen, and the latest one that has come to our attention could effect the eligibility of women owned businesses for federal contract set-asides.

The Contracting Education Academy at Georgia Tech has learned that SAM may not correctly display a company’s Women-Owned Small Business (WOSB) or Economically Disadvantaged Small Business (EDWOSB) designation. This means some small businesses that are legitimate WOSB/EDWOSB concerns are unable to visibly display their status in SAM at this time.   Reports indicate that the Small Business Administration (SBA) has called this latest challenge to the attention of the General Services Administration (GSA), SAM’s administrator.

While this problem is resolved, Contracting Officers are reminded that the identification of a woman-owned small business in SAM is not the authentication source required by regulations at 13 CFR 127.300(c).

The Code of Federal Regulations at 13 CFR 127.301(2) indicate that a Contracting Officer may accept a concern’s (bidder or proponent) representation as a WOSB or EDWOSB if the apparent successful offeror provides the appropriate documentation, as described in §127.300(e) at the time of initial offer.

Here are three ways a Contracting Officer can verify a WOSB/EDWOSB concern’s legitimacy:

  1. If an WOSB/EDWOSB concern has a valid certificate from one of SBA’s four approved third party certifiers (i.e., El Paso Hispanic Chamber of Commerce, National Women Business Owners Corporation, U.S. Women’s Chamber of Commerce, and Women’s Business Enterprise National Council), the concern can submit the certificate along with a signed copy of SBA form 2413 Woman-Owned Small Business (WOSB) or SBA form 2414 (EDWOSB) form to the Contracting Officer to validate the concern’s eligibility status.  Furthermore, the WOSB/EDWOSB concern must have the same documentation uploaded into SBA’s WOSB Repository at the time of initial offer.  (Under no circumstances are certifications to be accepted from parties other than the four organizations approved by the SBA; in other words, state certifications or any other forms of certification are not to be considered or accepted.)
  2. The WOSB/EDWOSB concern may submit a hard copy (signed) of all the required documents mandated by in the Code of Federal Regulations 13 CFR 127.300(e) and a signed copy of SBA WOSB form 2413 or to the EDWOSB form 2414,  for verification of WOSB/EDWOSB status.  These records are to be maintained for six years in the contract file.
  3. If the WOSB/EDWOSB concern is also an SBA-certified 8(a) concern, the concern may submit a copy of the SBA 8(a) BD Participant certificate and the signed SBA WOSB form 2413 or to the EDWOSB form 2414.

In all instances, Contracting Officers are required to verify a concern’s status in SBA’s WOSB Program Repository.  It is the obligation of the WOSB or EDWOSB to provide current, accurate and complete documents to the Contracting Officer for each contract award, via the Repository.

Ultimately, it is the responsibility of the Contracting Officer to verify WOSB/EDWOSB status.  If the Contracting Officer has information that calls into question the eligibility of a concern as an WOSB/EDWOSB, or the concern fails to provide all of the required documents to verify its eligibility, the Contracting Officer is to not award a WOSB/EDWOSB contract to that business concern.

In summary, regardless of how a business concern is listed in SAM, Contracting Officers should affirm the status of WOSB and EDWOSB concerns by checking their documentation online in the WOSB Program Repository per 13 CFR 127.300(c).  Apparent awardees can only provide access to those Contracting Officers who are registered for the WOSB Program Repository.  Contracting Officers should go to: https://eweb.sba.gov/gls/dsp_login.cfm and click on “Request SBA User ID” to establish an account.

To access a copy of the Contracting Education Academy’s presentation on various issues involving the System for Award Management (SAM), including helpful tips and work-arounds for both the vendor and acquisition communities, please click here.

Women-owned biz bill slashes dollar limit on contracts

The Fairness in Women-Owned Small Business Contracting Act of 2012 was introduced on March 7, 2012 by seven senators in a bipartisan effort to eliminate dollar-amount restrictions on contracts that WOSBs can compete for.

Sen. Olympia Snowe (R-ME), speaking to the Senate Committee on Small Business and Entrepreneurship, said the purpose of the bill is to remove inequities that exist in the women-owned small business contracting program, when compared to other socio-economic programs.

Sen. Snowe co-sponored the bill with senators Michael Bennet (D-Colo.), Kirsten Gillibrand (D-NY), Mary Landrieu (D-La.), Jeanne Shaheen (D-NH), Barbara Mikulski (D-Md.), and Lisa Murkowski (R-AK).

The proposed legislation would remove contract-award limitations as well as provide tools women need to compete fairly in the federal contracting arena by allowing for non-competitive contracts, when circumstances allow, the Congressional Record said.

“Women-owned small businesses have yet to receive their fair share of the federal marketplace,” said Sen. Snowe. “In fact, our government has never achieved its goal of five percent of contracts going to WOSBs, achieving only 4.04 percent in fiscal year 2010. Our bill would greatly assist federal agencies in achieving the small business goaling requirement for WOSBs,” she added.

The proposed legislation has received letters of support from the National Association of Women Business Owners, Women Impacting Public Policy and the U.S. Black Chamber, Inc.

“Women make this country run as business owners, entrepreneurs, politicians, mothers and more, but women-owned small businesses have yet to receive their fair share of federal contracting dollars,” Sen. Mikulski said.

In 2010, the Small Business Administration rolled out the WOSB Procurement Program, but the sponsoring senators and many women’s groups say it doesn’t go far enough.

The biggest complaint is that it still contains barriers that prevent women-owned businesses from fully developing.

“For 11 very long years, we urged the Congress and the federal agencies to put the WOSB program into place. Now that it has been implemented, our work has turned to improving the program and making it a vehicle for business growth for women business owners,” said Barbara Kasoff, president of WIPP, a national nonpartisan public-policy organization that advocates on behalf of nearly one million women-owned businesses.

“Women-owned small businesses are the fastest growing segment of our economy but they remain woefully underrepresented in small business contracting,” added. Sen. Bennet.

The senators proposed the bill to coincide with National Women’s History Month.

It also comes out on the heels of the House Small Business Committee clearing the way for six pro-contractors bills.

About the Author: Alysha Sideman is the online content producer for Washington Technology. This article appeared on Mar. 9, 2012 at http://washingtontechnology.com/articles/2012/03/09/2012-wosb-bill-introduced.aspx?s=wtdaily_120312.

Small-biz set-asides may harm firms, expert says

There may already be too many set-aside categories for small businesses, according to at least one expert. The sheer number of categories, and the targets set for agencies to award certain numbers of contracts to each, has the unintended consequence of squeezing some small businesses out of the game, he said.

The plethora of small business programs “has disenfranchised many of those who are not eligible to the extent that they no longer back the very programs they once were glad to support,” Scott Bellows, a program manager at the South Carolina Procurement Technical Assistance Center in Columbia, S.C., said Nov. 7.

And yet, the government is now considering creating yet another category, for businesses that employ military veterans.

During a hearing, Bellows told the House Small Business Committee’s Contracting and Workforce Subcommittee that the small-business programs, such as those helping companies owned by service-disabled veteran and women, and the 8(a) companies, don’t do as much as most people think to help small businesses at large.

Many of the same contractors tend to get the work over and over. That makes it hard for other small companies to break into the market, he said.

To break in, business owners “soon realize that it’s a long, uphill battle,” he said.

Bellows said the government, along with the Small Business Administration’s annual small business score card, should take a different look at the awarded set-aside contracts.

“If one asks how many ‘unique’ vendor contracts were awarded during a certain period of time, you might just come away with a different impression of how these programs are promoting small business development and helping to revitalize our economy,” he said.

The score card gave the government overall a B in awarding contracts to small businesses in fiscal 2010. The government has a goal to award 23 percent of contracts to small companies. In 2010, it reached 22.7 percent. It missed many of its goals for the specific categories of small businesses.

President Barack Obama’s Interagency Task Force on Veterans Small Business Development has recommended the government should consider giving companies with at least 35 percent of its employees as veterans a special status in federal contracting. They likened the new category to the Historically Underutilized Business Zone small business program. For HUBZone status, 35 percent of a small firm’s employees must live in an economically depressed zone.

The task force said the new small-business category would not take too much regulatory efforts. The task force wants the Veterans Affairs and Defense departments, as well as SBA and the Office of Management and Budget, to further explore the idea.

The task force is interested in the hiring aspect of creating the new category.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement at Federal Computer Week. Published Nov. 9, 2011 at http://fcw.com/articles/2011/11/09/set-aside-small-business-programs-other-small-business-effects.aspx.

Government gets a B in 2010 small business contracting

The Small Business Administration gave the government a B grade for its attempts to reach small-business contracting goals, including the annual 23 percent overall goal, an agency official said June 23.

The government awarded 22.7 percent of its contracting dollars to small companies in fiscal 2010, compared to 21.9 percent the previous year. It awarded $97.9 billion to small businesses in 2010, compared with $96.8 billion in 2009, a $1.1 billion increase.

The B grade means that the government met 90 percent to 99 percent of its goals for the year.

In 2010, the government improved in four of the five categories of small businesses compared to SBA’s previous score card. There were increases in contract dollars and performance against statutory goals, except in the Historically Underutilized Business Zone (HUBZone) category.

Small disadvantaged businesses received $34.4 billion, or 8 percent of contracting dollars. The government surpassed the 5 percent goal for the category, as it did in 2009.

Woman-owned small businesses received $17.5 billion, or 4 percent of contracting dollars, in 2010. It was less than a point short of the 5 percent annual goal. In 2009, such companies received 3.7 percent of contracting dollars.

Small businesses owned by service-disabled veterans received $10.8 billion, or 2.5 percent of contracting dollars. The government was 0.5 percent below the 3 percent goal for such companies, although the percentage increased from just under 2 percent in 2009.

The HUBZone small-business category was the only one to experience a decline in 2010. Such companies received $11.97 billion, or 2.77 percent of contracting dollars. The goal is 3 percent. In 2009, the government had awarded HUBZone businesses $12.41 billion, or 2.81 percent of contracting dollars.

Joe Jordan, associate administrator of government contracting and business development at SBA, said the parity issue played a part in the HUBZone decrease.

Last year, Congress settled a disagreement among the administration, lawmakers, the U.S. Court of Federal Claims and the Government Accountability Office about whether agencies are required to offer small-business set-aside contracts to HUBZone companies first. The debate was over the word “shall” in the law. In legislation passed toward the end of the year, Congress replaced the word with “may,” clearing up any confusion about the equality of small-business categories. Read more about the debate.

“I think the confusion around parity during 2010 had some contracting officers skittish around HUBZones and what they should and should not do,” Jordan said. “And that’s why it’s so great that parity is now the law of the land. There is no more confusion.”

About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week – June 24, 2011 at http://washingtontechnology.com/articles/2011/06/24/sba-small-business-score-card-2010.aspx?s=wtdaily_270611

New SBA rules affect small businesses contracting programs

Newly-published rules by the Small Business Administration (SBA) address the justification and approval process associated with large sole-source contract awards to 8(a) firms; address parity among 8(a), HUBZone, and SDVOSB firms; and propose increases in the small business size standards for some industries.  Public comment is being solicited on the last item.

Specifically, the rules:

  1. Require federal agencies to issue a Justification and Approval prior to the award of 8(a) sole source contracts over $20 million;
  2. Clarify a contracting officer’s ability to use discretion when determining whether an acquisition will be restricted to small businesses participating in the 8(a), HUBZone or service-disabled veteran-owned small business (SDVOSB) programs; and
  3. Propose increases in the small business size standards for dozens of service industries in NAICS codes 54 and 81. 

The first two rules were issued as interim rules by the SBA and the Federal Acquisition (FAR) Council, and are effective immediately.  The third item is a proposed rule.  All were published on March 16, 2011 in the Federal Register.

Here are the details on the rules.

Justification and Approval for 8(a) Sole-Source Awards Above $20M

The FAR Council issued an interim rule implementing Section 811 of the National Defense Authorization Act for Fiscal Year 2010 (Pub. L. 111-84), which requires federal agencies to issue a Justification and Approval (J&A) prior to awarding a sole-source contract over $20 million under the 8(a) program.  The J&A must be approved by an appropriate official (as currently defined by FAR 6.304) and made public after award of the contract.  Prior to the enactment of section 811, a sole-source award of a new contract made using the 8(a) contracting authority did not require a J&A, regardless of the dollar value.  Under the interim rule, the J&A must document the reasons for making a sole-source award rather than a competitive award under the 8(a) program.  The rule institutes no new requirements for sole-source 8(a) awards less than or equal to $20 million.  Here is the full text of the rule: Justification and Approval of Sole-Source 8a Contracts 03.16.2011.

Parity Among 8(a), HUBZone, or SDVOSB Programs

The FAR Council issued an interim rule implementing Section 1347 of the Small Business Jobs Act of 2010 (Pub. L. 111-240) and clarifying that there is parity when a contracting officer selects among small businesses participating in the 8(a), HUBZone and SDVOSB programs.  Under the interim rule, contracting officers will have the discretion to determine whether an acquisition will be restricted to one of these three programs.  The full text of the rule is available here: Socioeconomic Program Parity 03.16.2011.

This interim rule also clarifies that:

  • Although there is no order of precedence among the three programs, if a requirement has been accepted by SBA under the 8(a) program, it must remain in the 8(a) program unless SBA agrees to release it;
  • For acquisitions exceeding the simplified acquisition threshold (that is, contracts more than $150,000), contracting officers must consider a set-aside or sole source award to a small business under the 8(a), HUBZone, or SDVOSB programs before proceeding with a small business set-aside; and
  • The small business set-aside requirement under FAR 19.502-2(a) does not preclude award of a contract to a participant in the 8(a), HUBZone, or SDVOSB programs.  SBA regulations give contracting officers the authority to use these programs at dollar levels above the micro-purchase threshold and at or below the simplified acquisition threshold.

It is important to note that the interim rule does not address SBA’s new Women-Owned Small Business (WOSB) program.  The WOSB program will be addressed as a separate interim rule under FAR Case 2010-015 and implement the SBA’s WOSB Federal Contract Program final rule (75 FR 62258, October 7, 2010).  The SBA rule provides for parity between WOSBs and other small business contracting programs.

Service Industries Size Standards

The SBA issued a proposed rule increasing the small business size standards for 35 industries and one sub-industry in North American Industry Classification System (NAICS) Code 54, Professional, Scientific and Technical Services, and one industry in NAICS Code 81, Other Services.  Many of the size standards would increase significantly under the proposed rule.  For example, several of the Sector 54 size standards will increase from $4.5M or $7M, to $14M or $19M.  The full text of the proposed rule is available here: Small Business Size Standards – Proposed – 03.16.2011.

The SBA is accepting public comments on the proposed changes to the small business size standards through May 16, 2011.