If you are a woman-owned business, meaning at least 51% is owned by one or more women who are U.S. citizens eligible to participate, you can obtain SBA certification that makes you eligible for federal contracting opportunities (the government’s goal is to award at least 5% of all prime federal contracting to these businesses). But starting July 15, 2020, the certification process will begin to change for women-owned small businesses (WOSBs) and economically disadvantaged women-owned small businesses (EDWOSBs). Eligible businesses may want to act now under existing rules before a tougher certification process takes effect, but further action will still be required as explained below.
Reasons for the change
Women-owned businesses make up a growing part of the U.S. economy. According to the National Association of Women Business Owners (NAWBO), there are an estimated 11.6 million firms owned by women, which accounts for 39% of all privately held businesses. According to the SBA, as of October 2018, there were 13,224 WOSBs and 4,488 EDWOSBs registered as such.
A GAO report released last year reported that “in 2015 and 2018 the SBA Office of Inspector General (OIG) reviewed the WOSB program and also found several oversight deficiencies.” The National Defense Authorization Act of 2015 amended the WOSB program by removing self-certification. In May, a final rule from the SBA proscribed the new certification process.
Certification process now
Currently, there is a self-certification process for eligible businesses. Through Certify.SBA.gov, you can determine if you’re eligible for certification and how to do it. Starting July 15, 2020, the new process begins.
If you are currently certified or obtain self-certification before July 15, you’ll need to take action. If you have no active contracts, you’ll need to get formally certified under the new process. If you have an active set-aside contract, you’ll need to create a new account and upload documents to demonstrate your continued eligibility.
New certification process
Under the new process beginning mid-July, certification must be made by another party through a free online certification process. The SBA can certify eligibility. Others that will do this include the U.S. Department of Veterans Affairs Center of Verification and Evaluations as well as third party certifiers (TPCs) approved by the SBA. As of October 15, 2020, self-certification will no longer be an option.
Details about the new process are evolving, but you can check SBA FAQs for some information. A revised logo for certified WOSBs and EDWOSBs has yet to be created.
A report from the Brookings warns that women-owned businesses may suffer more as a result of COVID-19 crisis than their male counterparts, a fact that was experienced during the Great Recession. But the report went on to say that women-owned businesses “helped stabilize the economy during the recovery period.” Access to government contracting through WOSB certification may be a way for some women-owned businesses to make it through these tough times. Monitor developments on the new certification process.