On October 4, 2010, the SBA released its long-awaited final rule on a new federal contract program for women-owned businesses (13 C.F.R. parts 121, 124, 125, 126, 127 and 134). Once published in the Federal Register (anticipated on Thursday, October 7), the SBA will have 120 days to implement the rule. The program is expected to be fully operational by early 2011, more than a decade after the enabling statute, the Equity in Contracting for Women Act of 2000, was signed by President Clinton.
The rule creates a new category of federal procurement set asides for Women-Owned Small Businesses ("WOSBs”). Companies may either self-certify as a WOSB, or be certified by a government agency or third party private certifying organization. All WOSBs, however, must complete the federal Online Representation and Certification Application ("ORCA”). To be eligible, a company must be: (1) "small” according to the size qualifications for the pertinent NAICS codes; (2) at least 51 percent owned and controlled directly and unconditionally by one or more women who are U.S. citizens; (3) and primarily managed by one or more women on a full-time basis with the highest officer position held by a woman. A company that also demonstrates economic disadvantage in accordance with the rule may qualify as an Economically Disadvantaged Women-Owned Small Business ("EDWOSB”).
Certifications must be supported by robust documentary verification (with documents submitted to a special Program Repository), and may be subject to further investigation, information requests and review by the SBA. The SBA intends to vigorously pursue and penalize ineligible parties who fraudulently attempt to take advantage of the program. Certified WOSBs and EDWOSBs will be eligible for procurement set-asides in selected industries where contracts are less than $5 million for construction and less than $3 million for non-construction projects. Contracts over these limits are not subject to set-aside under the program.
The 2000 statute providing authority for the rule allows the government to reserve procurement opportunities for women-owned businesses in industries where such businesses historically have been underrepresented. In an earlier effort under the Bush Administration, the SBA had identified only 4 industries where women-owned businesses were underrepresented. In the current rule, the SBA has identified 83 industries where women-owned businesses have been underrepresented. Procurements in 45 NAICS codes in which WOSBs are underrepresented may be set aside for eligible EDWOSBs. Procurements in the remaining 38 NAICS codes in which WOSBs are substantially underrepresented may be set aside for all eligible WOSBs.
Under the Small Business Jobs Act of 2010, the WOSB program will have ”parity” with the SBA’s other small business contracting programs, including the HUBZone, 8(a) and SDVOSB programs.
Here is a link to the SBA News Release: http://www.sba.gov/idc/groups/public/documents/sba_homepage/news_release_10-55.pdf
A pdf of the full text of the SBA decision and WOSB rule is attached.