Female business owners have the opportunity to significantly expand their businesses by taking advantage of the Small Business Administration’s new Women-Owned Small Business Federal Contract Program.
By John Bateman
Program Overview
The Program, which became effective April 1, 2011, is aimed at expanding federal contracting opportunities for women-owned small businesses (WOSBs) and economically disadvantaged women-owned small businesses (EDWOSBs). Specifically, the program mandates that federal government contracting officers set aside certain federal contracts for eligible WOSBs and EDWOSBs in industry sectors in which women-owned businesses are traditionally underrepresented. The SBA has identified 83 four-digit North American Industry Classification Systems (NAICS) codes (and 300 NAICS six-digit sub-codes) that are eligible under the program.
How the Program Works
The process of setting aside federal contracts for WSOBs and EDWOSBs is substantially the same. In both cases, the federal contracting officer is authorized to set aside a contract for WOSBs or EDWOSBs if certain criteria are met. First, the contracting officer will determine if the contract is for a line of business that falls under one of the eligible NAICS codes as discussed above. If so, the contracting officer will then determine if the anticipated value of the federal contract is less than $6.5 million if the contract is for manufacturing or less than $4 million for any other contract. If these requirements are met, and the contracting officer has a reasonable expectation that the contract can be awarded at a fair and reasonable price and that at least two WOSBs or EDWOSBs will submit bids for the contract, then he may set aside the contract for WOSBs or EDWOSBs.
Eligibility
Generally, in order to be eligible for participation in the program as a WOSB, a business must be at least 51% unconditionally and directly owned and controlled by one or more women who hold American citizenship. In addition, a woman must also manage the day-to-day operations of the business, make long-term plans and decisions for the business, work at the business full-time during normal working hours, and be the highest ranking officer in the business.
To be eligible to participate in the program as an EDWOSB, an interested company must generally be at least 51% owned and controlled by an “economically disadvantaged” woman (or women). A woman is considered to be “economically disadvantaged” if she has a personal net worth of less than $750,000, her annual adjusted gross income averaged less than $350,000 for the three years prior to pursuing certification, and the fair market value of her assets is less than $6 million. In addition to the ownership and control requirements, an economically disadvantaged woman must also manage the company’s day-to-day operations, make long-term decisions for the business, work at the business full-time during normal working hours, and be the highest ranking officer in the company.
Certification
In addition to meeting the eligibility requirements discussed above, an interested business must also be certified as either a WOSB or EDWOSB. Certification can be obtained either through self-certification or through third party certification. Currently, however, the only method of certification available to interested businesses is self-certification, as the SBA remains in the process of approving third party certification agencies.
How to Get Started
This program represents a tremendous opportunity for WOSBs and EDWOSBs to significantly grow their businesses through federal contracting. With the SBA planning to award the bulk of federal contracts during the fourth quarter of FY 2011, there is still time for interested businesses to get certified and compete for these contracts. Interested business owners should consult the program’s website or contact an Exemplar Team Member for more information.
