How Does EDWOSB Certification Help Your Business?

The world of federal contracting, with its intricate web of regulations and procedures, may initially appear formidable and impenetrable to outsiders. However, nestled within this labyrinth lies a hidden passage—an extraordinary opportunity—that has the potential to reshape the destiny of a company. For women-owned businesses and economically disadvantaged women entrepreneurs across America, the EDWOSB Certification serves as a lifeline, unlocking a realm of government contracts, untapped resources, and invaluable mentorship.

This article is dedicated to visionary, risk-taking American women who are both owners and entrepreneurs of economically disadvantaged companies. It delves deep into the realm of the EDWOSB Certification, meticulously exploring its prerequisites while unmasking the myriad advantages that lie in wait for those bold enough to seize this opportunity. Acting as a beacon, this essay will illuminate the path to success in the EDWOSB application, whether you are embarking on your entrepreneurial journey or striving to propel your existing business to greater heights.

Understanding the Significance of EDWOSB Certification

EDWOSB certification, short for Economically Disadvantaged Women-Owned Small Business Certification, holds substantial importance within the framework of the Small Business Administration's (SBA) Women-Owned Small Business (WOSB) Federal Contracting Program. This program aims to enhance the accessibility of federal contracting opportunities specifically for women-owned small businesses (WOSBs) and economically disadvantaged women-owned small businesses (EDWOSBs). Its primary objective revolves around supporting federal agencies in achieving their target of allocating 5% of their contractual budget exclusively to WOSBs.

Under this initiative, government contracting officers possess the authority to reserve certain orders or contracts solely for WOSBs or EDWOSBs. This decision is based on the SBA's comprehensive evaluation of the underrepresentation of WOSBs within particular industries. To facilitate this, the SBA has identified 364 six-digit North American Industry Classification System (NAICS) codes corresponding to WOSBs, as well as 80 six-digit NAICS codes applicable to EDWOSBs, out of a total pool of 1,023 codes.

Furthermore, in specific scenarios, federal agencies have the option to award sole-source contracts to eligible WOSBs and EDWOSBs operating in designated industries. These circumstances require the absence of multiple offers from qualified WOSBs or EDWOSBs, the establishment of fair and reasonable pricing, and a contractual value that falls below predetermined thresholds ($4 million for non-manufacturing contracts or $6.5 million for manufacturing contracts).

Since 1978, directors of federal agencies have been mandated to set federal procurement targets that consider the potential of small businesses, particularly those led by individuals from socially and economically disadvantaged backgrounds. However, the inclusion of WOSB goals was initially overlooked in these objectives. To rectify this, President Jimmy Carter signed Executive Order 12138 in 1979, which not only promoted the establishment of women-owned businesses but also mandated federal agencies to facilitate procurement opportunities and aid in the formation of joint ventures for EDWOSBs.

With the implementation of Executive Order 12138, the Small Business Administration was empowered to incorporate WOSB procurement goals into the discussions of small business contracting objectives with federal agencies. Unfortunately, by 1988, only a mere 1% of all federal contracts were awarded to WOSBs, prompting the enactment of the Women's Business Ownership Act of 1988 (P.L. 100-533) to address this disparity.

Qualifications for the Women-Owned Small Business (WOSB) Federal Contracting Program

The requirements for participation in the Women-Owned Small Business (WOSB) Federal Contracting Program were established by the Consolidated Appropriations Act, 2001 (P.L. 106-554). According to the act, contracts reserved for Women-Owned Small Businesses (WOSBs) or economically disadvantaged Women-Owned Small Businesses (EDWOSBs) can only be designated if specific conditions are met. These conditions include the reasonable expectation of multiple qualified companies submitting bids, ensuring that the anticipated award price of the contract, including options, remains within predetermined limits, and guaranteeing that the contract can be awarded at a fair and reasonable price.

To qualify for the WOSB program, companies must meet certain eligibility requirements. These requirements include being classified as a small business according to the Small Business Administration's (SBA) definition, having at least 51% unconditional and direct ownership and control by one or more women who are U.S. citizens, having women involved in day-to-day management and long-term decision-making, and obtaining certification from a federal agency, state government, the SBA, or an authorized national certifying entity. Businesses may also self-certify their eligibility to the federal contracting officer by providing sufficient evidence that aligns with SBA guidelines.

Previously, small businesses had the option to self-certify their eligibility for the WOSB program. However, the P.L. 113-291 (NDAA 2015) repealed this provision, removing the ability to ensure exclusive contract allocation to designated recipients. As a result, the SBA was mandated to establish its own certification procedure for WOSBs. It is advisable for WOSBs and EDWOSBs to either self-certify or obtain third-party certification to participate in the program, although the SBA anticipated implementing the certification process and eliminating self-certification by July 2020. Self-certification involves maintaining an accurate profile on the System for Award Management (SAM) website and annually submitting certification information through the SBA's certification webpage. Approved organizations recognized by the SBA offer third-party certification, typically for a fee.

To qualify as an EDWOSB, businesses must meet the criteria of being economically disadvantaged and comply with all requirements of the WOSB contracting program. The SBA's definition of economic disadvantage considers factors such as the owner's personal net worth, averaged adjusted gross income over three years, and personal assets. For instance, an owner certified as an EDWOSB must have a personal net worth not exceeding $750,000, an average adjusted gross income of no more than $350,000 over the previous three years, and personal assets not exceeding $6 million.

Key Takeaways

The EDWOSB certification program holds significant promise for American women entrepreneurs and women-owned businesses. By understanding the qualifying criteria and leveraging the benefits of this accreditation, business owners can unlock a wealth of opportunities and propel their companies towards success.

The EDWOSB certification serves as a gateway to government contracts, aiming to level the playing field and enhance access to federal contracting opportunities. By having contracts specifically reserved for WOSBs and EDWOSBs, businesses have an improved likelihood of securing lucrative government contracts, expanding their customer base, and fostering overall growth.