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

Small Business Administration proposal would grant women-owned small businesses more chances to compete for federal contracts

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.

Related stories:

SBA tries again to help women-owned businesses get contracts

Senate bill takes aim at HUBZone fraud

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.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

Reader Comments

Thu, Apr 22, 2010

I appreciate the rationale for providing opportunities to disadvantaged individuals and promoting minorities and women in the workplace. However, I have trouble understanding how these preference programs provide those opportunities only to the owners of these small business firms. Does it really benefit society to set-aside a contract to a firm owned by a disadvantaged individual that may have a workforce comprised entirely of non-disadvantaged individuals? The same would hold true for a woman-owned small business firm that may have 99.9% of its workforce comprised of men. How do these programs ensure a parody in hiring? The only small business program that has gone so far is the HubZone program which requires a certain percentage of their workforce to live in an under-utilized zone.

Sat, Apr 3, 2010

I think it is just the opposite and overrated. I know many firms that qualify as either WBE or SBE or MBE or MWBE and in the end it is still who you know and not what you know.

Wed, Mar 24, 2010

I am in my 55th year in corporate america working as a software engineer.When I becan, it was assumed that minorites and women had no place in corporate america independent of their education and skill. It has been a long struggle to just to get to parody in hiring. This administration reconizes that minority groups need a hand up. Minorites and women were systematically excluded from competing for federal contracts and still find it difficult to compete. If the government did not give se asides for those who were artificially denied inclusion into the bidding process, all contracts would be awarded to the large companies.

Wed, Mar 17, 2010

I know of cases where H1B Visa holders have been awarded a Pacific Rim Minority Status, just because they knew the correct wording and how to apply. Has anyone attempted to ascertain the true economic damage and obvious security risks that some of these grants have caused. It has come really close to irreconcilable and beyond repair. Hello Washington it is time for a wake up call.

Fri, Mar 5, 2010

It is getting to the point that if you have a small business with no special designations (i.e. women-opened, minority, Hub-Zone, Native American, etc.) it is impossible to compete, although you may have the better products and services. It is reaching a ridiculous point. Are the companies with these designation really disadvantaged? The companies with no special designations are the ones that are in reality getting discriminated against.

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