SBA proposed rule directs set-aside contracts to women-owned firms

Women business owners in various sectors of the information technology and telecommunications community may get an advantage in contracting under a newly proposed small-business rule.

The Small Business Administration has found that women-owned small businesses (WOSBs) were “substantially underrepresented” in 83 industries. As labeled by the North American Industry Classification System codes, those industries include:

• Software publishers.
• Wired telecommunications carriers.
• Wireless telecommunications carriers (except satellite).
• Data processing, hosting, and related services.

The intent of the rule is to provide more chances for women to compete for federal contracts, while also helping agencies reach the statutory goal of awarding 5 percent of federal contracting dollars to WOSBs, the SBA said March 2.

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The proposed program directs set-aside contracts to women business owners at a cost to other businesses, SBA wrote in its proposal. However, in the law that authorized such a set-aside program, Congress limited the program only to industries in which women are actually underrepresented in contracting.

SBA estimated that agencies awarded contracts to 12,000 WOSBs in the 83 industries in fiscal 2005. In an in-depth review of the Dynamic Small Business Search, a subset of the Central Contractor Repository, SBA said approximately 76,000 WOSBs would be affected by this proposal.

SBA announced the proposal March 2, and here are a few main features of the proposed rule:

• To be eligible, a firm must be 51 percent owned and controlled by one woman or more women, and primarily managed by one woman or more women.
• The proposed rule authorizes a contract set-aside for WOSBs when the anticipated contract price is less than $5 million in the case of manufacturing contracts and less than $3 million for other contracts.
• It removes the requirement that each agency certify it has discriminated against WOSBs in the past in order to join the program. A previous proposal included such a requirement.
• The proposed rule allows WOSBs to self-certify or to be certified by third-party certifiers, including the government and private certification groups.
• The proposed rule also requires WOSBs that self-certify to submit a robust certification at the federal Online Representations and Certifications Application Web site and also to SBA.

SBA has been criticized for fraud problems in its set-aside programs. Some business owners have lied to slip into set-aside programs, such as the Historically Underutilized Business Zone (HUBZone) program. With the new program, SBA said it intends to conduct a "significant number" of examinations to confirm WOSBs' eligibility. SBA also warned that it will pursue ineligible firms that seek to take advantage of the program.