Thursday, March 4, 2010

Proposed Rule to Help Women-Owned Small Businesses

The SBA has proposed a new rule to expand federal contracting opportunities to Women-Owned Small Businesses (WOSB).  The Government has never met its 5 percent contracting goal with women in at least the last 11 years. The latest numbers indicate that currently, only 3.4 percent of contracts are awarded to women-owned businesses.

To rectify this situation, SBA has proposed some new rules. First, the rule will authorize a set-aside of federal contracts where the anticipated contract price does not exceed $3 million ($5 million for manufacturing). Second, the rule significantly expands the number of industries (identified by NAICS codes) in which women-owned small businesses are under-represented or substantially under-represented from four to 83. Thirdly, unlike an earlier proposed rule from 2008 that was never finalized, Government Agencies do not need to find discriminatory contracting practices against women-owned businesses before competition could be restricted (i.e. set-aside).

The proposed rule allows women-owned small businesses to self-certify their status however SBA promises a robust certification process and a significant number of program examinations to confirm eligibility. SBA promises to vigorously pursue ineligible firms which seek to take advantage of the program and in so doing to deny its benefits to legitimate WSOBs. Presumably, this vigorous pursuit means suspension and debarment.

To be eligible for these set-asides, a firm must be 51 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 "small" in its primary industry in accordance with SBA size standards.

You can read SBA's press release here.

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