New Certification Process for Woman-Owned Small Businesses

 The Women-Owned Small Business (WOSB) and Economically Disadvantaged Women-Owned Small Business (EDWOSB) Application Final Rule (the Final Rule) goes into effect on July 15, 2020, with some sections being postponed until October 15, 2020. Any company planning to apply for WOSB or EDWOSB set-aside government contracts should carefully understand this important Final Rule.

The National Defense Authorization Act for Fiscal Year 2015, which was signed into law on December 19, 2014, contains Section 825, which is the source of the Final Rule (the FY 2015 NDAA). A WOSB or EDWOSB must be certified by a federal agency, a state government, the SBA, or a national certifying entity designated by the SBA to be awarded a contract set aside for the WOSB or EDWOSB application program, according to the FY 2015 NDAA, which amended the Small Business Act.

The text implementing this amendment is found at 15 U.S.C. 637(m)(2)(E) in Section 8(m) of the Small Business Act. After the Government Accountability Office discovered that more than 40% of the WOSBs and EDWOSBs that got contracts in 2012 and 2013 should not have confirmed their eligibility for those programs, Section 825 was established. This report (GAO-15-54) was released in October 2014. The SBA's regulations implementing the FY 2015 NDAA's requirements go into effect on July 15, 2020, even though the FY 2015 NDAA was passed into law in December 2014. Some of the key provisions of the Final Rule are outlined here.

What Are the Procedures for WOSB and EDWOSB Application?

On July 15, 2020, the SBA will launch a new certification platform where companies seeking WOSB or EDWOSB certification can submit their applications and supporting documentation. On sba.gov/wosbready, you may get information about this new platform and the requirements that go along with it.

Starting on July 15, businesses can submit a free, direct application to the SBA for WOSB or EDWOSB application. On the day that the regulations go into effect, businesses that satisfy any of the following requirements shall be regarded as certified:

Before July 15, had a WOSB or EDWOSB application from a recognized third-party certifier;

Have obtained certification through the 8(a) Business Development Program before July 15 and are owned or operated by one or more women;

Or In the three years before July 15, 2020, were the subject of a status protest or a program examination that ended in a favorable ruling.

The SBA's new certification platform requires all businesses, even those that rely on one or more of these eligibility requirements, to upload supporting documents to verify their eligibility.

Small businesses run by women that have been recognized as Service-Disabled Veteran-Owned Businesses (SDVOSBs) or Veteran-Owned Businesses (VOBs) by the U.S. Department of Veterans Affairs Center for Verification and Evaluation (CVE) are eligible to apply for WOSB certification by providing proof of ownership to the SBA. Because the CVE program evaluates the size, socioeconomic level, ownership, and control for verification, SBA will accept the CVE verification. Check out 38 C.F.R. 74.1 et seq. Similar to the above, the SBA will also accept proof of CVE verification for EDWOSB application as long as the applying company also provides proof that it is an economically disadvantaged, women-owned, and controlled business.

A company that wants to be certified as a WOSB or EDWOSB must provide proof to the certifying authority that it satisfies the criteria outlined in Subpart B of 13 C.F.R. 127. As a result, a business seeking WOSB accreditation must now get ready to provide documentation showing that it is:

At least 51 percent are owned and run by women who are citizens of the United States; and

Has one or more women in charge of both short- and long-term decision-making.

The following list is not exhaustive of the requisite paperwork demonstrating these qualifications:

The entity's System for Award Management (SAM) registration documents,

Proof proving the owners' nationality (i.e., birth certificate, naturalization paper, etc.),

Current joint venture contracts, and

Documents demonstrating who owns and controls the entity (i.e., articles of incorporation, corporate bylaws, stock ledger, etc.).

The documentation needed for WOSB certification must be submitted along with personal financial information that demonstrates the net worth and adjusted gross income of the eligible economically disadvantaged women. A thorough preparation checklist for WOSB and EDWOSB applications is available from the SBA at https://certify.sba.gov/prepare#wosb-anc.

It would be wise for businesses applying for a WOSB or an EDWOSB application to review the Final Rule, gather their paperwork immediately, and get ready to submit their applications as soon as the Final Rule becomes effective. There will probably be a backlog of applications because many people are anticipated to apply through this approach.

Conclusion

All organizations aiming to obtain such certifications should carefully consider the Final Rule, which will make major modifications to the WOSB and EDWOSB programs.