Five years after Congress ordered it, the Small Business Administration has published the long-awaited final rule to stop self-certification for the Women-Owned Small Business (WOSB) federal contracting program and to begin offering its own free online WOSB certification process.
There also are changes for income and net worth thresholds for the 8(a) Business Development program, details on WOSB Third-Party Certifications, and adjustments to continued program eligibility and program examinations.
Congress ordered the changes in the national defense authorization legislation of fiscal 2015. The proposed rule was released last year.
WOSBs and EDWOSBs
Under the final rule, self-certified WOSBs and Economically-Disadvantaged WOSBs (EDWOSBs) will no longer be eligible for set-asides and sole source awards under the SBA’s WOSB program as of Oct. 15.
SBA will begin setting up its own free online WOSB and EDWOSB certification program on July 15.
WOSBs and EDWOSBs will retain the option to self-certify to pursue unrestricted awards. Agencies may take credit for those awards toward their WOSB procurement goals.
Other changes include:
- Under the rule, WOSBs and EDWOSBs–whether certified directly by SBA or otherwise–will be required to attest to SBA annually that they remain eligible for the Program and undergo a full program examination every three years;
- Once certified, a WOSB or EDWOSB must notify SBA of any material changes that could affect eligibility within 30 calendar days;
- If a firm is no longer eligible as a WOSB or EDWOSB by the end of the fifth year of a federal contract, awards on that contract no longer count toward WOSB/EDWOSB awards;
- SBA will allow WOSB program participation from firms certified by the Dept. of Veterans Affairs, provided they meet all eligibility requirements; and
- SBA will continue to allow certifications by approved Third-Party Certifiers.
In-Program vs. Out-of-Program
The SBA’s final rule outlines significant differences for WOSBs and EDWOSBs seeking federal contracts within the SBA’s WOSB program or outside of it.
“The certification requirement applies only to those businesses wishing to compete for set-aside or sole source contracts under the (SBA WOSB) Program, and to those seeking to be awarded multiple award contracts for pools reserved for WOSBs and EDWOSBs,” according to a statement by the SBA’s Office of Advocacy.
Meanwhile, the office noted an apparently lower standard of verification for WOSBs who self-certify.
“Other women-owned small business concerns that do not participate in the Program may continue to self-certify their status, receive contract awards outside the Program, and count toward an agency’s goal for awards to WOSBs. For those purposes, contracting officers would be able to accept self-certifications without requiring them to verify any documentation,” the office’s statement indicated.
It was not immediately clear if the statement referred to no verification at all, or no verification by SBA. SBA officials were not immediately available.
The final rule raises the personal net income threshold for applicants for the SBA’s 8(a) Business Development program to $750,000, up from $250,000.
The goal was to align the 8(a) threshold with the initial threshold for applicants to the Economically-Disadvantaged WOSB program (EDWOSB), which, under current regulations, is $750,000.
Also, funds invested in official retirement accounts are excluded from the analysis of personal net worth in both the WOSB and 8(a) Programs. The rule sets consistent standards of $750,000 net worth, $350,000 gross income limit and a fair market value threshold of $6 million for 8(a)s and EDWOSBs.
Final rule deadlines
The final rule is partially in effect on July 15, with certain exceptions. The rule is fully effective on Oct. 15.
SBA clarified the effectiveness dates and deadlines for implementation activities in a notice on its website:
- The current self-certification process will remain available for firms until Oct. 15 in certify.sba.gov;
- Currently-certified WOSBs must download their documentation from the WOSB Program Repository at certify.sba.gov by July 15;
- On July 15, firms can begin submitting applications for WOSB and EDWOSB certification under the new SBA certification process;
- On Oct. 15, SBA will begin issuing decisions on certification; and
- Further instructions for the new SBA certification process will be detailed prior to July 15.