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Woman Owned Small Businesses - Make Sure You Understand this New SBA Certification Regulation!

The SBA’s new final rule, issued on May 11, 2020, now requires women owned small businesses ("WOSBs") and economically disadvantaged women-owned small businesses ("EDWOSBs") to obtain certification from the SBA or through a third-party certifier to continue to seek contracts under the SBA's Procurement Program for Women-Owned Small Business Concerns.

Here is what you need to know:

The U.S. Small Business Administration (“SBA”) began implementing changes to the certification process relating to the SBA's Procurement Program for Women-Owned Small Business Concerns (“Program”) on July 15, 2020. Previous to the changes, since 2015, WOSBs and EDWOSBs have been allowed to self-certify their status to compete for sole source contracts and set-asides. However, WOSBs and EDWOSBs that are not certified by October 15, 2020 will become ineligible for new contracts under the Program.

Other WOSB concerns that currently do not participate in the Program will be able to continue to self-certify their status, receive contract awards outside the Program, and count toward an agency’s goal for awards to WOSBs.

Existing Contracts will not be Affected

According to the SBA, the rule change will not affect existing contracts awarded under the Program. As a result, a small business that was awarded a WOSB or EDWOSB contract previously under the Program may continue to perform that contract.

However, WOSBs or ESWOSBs who hold contracts (including multiple-award contracts) with durations of five or more years (including options) will be required to complete the necessary certification prior to the end of the fifth year of the contract. In addition, the final rule has also made economic disadvantage criteria consistent between the EDWOSB Program and 8(a) Business Development Program.

The SBA notes that the new WOSB Program regulations will make it easier and more efficient for contracting officers to set aside and make awards to firms certified as WOSBs and EDWOSBs and will better empower agencies to meet the 5% federal contracting goal for women-owned small businesses.

Summary of New Requirements

  • Allows participation from firms certified by the U.S. Department of Veterans Affairs Center of Verification and Evaluations, provided they meet all eligibility requirements;
  • Confirms the continued participation of approved third-party certifiers;
  • Eliminates the self-certification option from, effective October 15, 2020; and
  • Adopts a $750,000 net worth standard when assessing economic disadvantage for individuals in the 8(a) Business Development Program (8(a) Program). Additionally, funds invested in official retirement accounts are excluded from the analysis of an economically-disadvantaged individual’s personal net worth in both the WOSB and 8(a) Programs which makes the economic disadvantage threshold and analysis consistent for EDWOSBs and 8(a) Program participants.
  • The current self-certification process, via, will remain available for firms until October 15, 2020;
  • The SBA is accepting the submission of applications for initial processing; and
  • On October 15, 2020, SBA will begin issuing decisions on certification.

Key Takeaway..

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Since the October 15, 2020 deadline is fast approaching, (less than 30 days), it is important that if your small business is seeking WOSB and/or EDWOSB SBA Program certification, that you closely review the final rule as you might find that your business may need to change the current certification approach or, that you may not need to change your certification processes at all.

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