SBA Ruling Impacts Women-Owned Small Businesses

On July 15, 2020, important changes for Women-Owned Small Businesses (WOSBs) and Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs) took effect as a result of the U.S. Small Business Administration’s (SBA) new Final Rule.  The Final Rule (Rule) requires certification for businesses competing for the Procurement Program for Women-Owned Small Business Concerns (Procurement Program) contracts.  The Rule dictates that WOSBs must receive certification through one of three processes: (1) the SBA certification process; (2) submission of evidence from a government-approved certifying body, or (3) submission of certification evidence from a third-party certifying body.  The SBA makes final determinations on all certifications, and its application and certification process is free.

Although businesses may continue to self-certify for now, SBA-approved certification will be required as of October 15, 2020 to be eligible to compete for set-aside contracts under the Procurement Program.  WOSBs will be required to submit documentation confirming that at least 51 percent of the business is owned and controlled by women who are U.S. citizens, and that the business has one or more women managing its daily operations and long term decisions.  In order to maintain eligibility, the Rule also mandates that WOSBs allow examination every three years and provide proof of eligibility for the Procurement Program annually.  Notably, businesses that were previously awarded contracts as WOSBs will maintain WOSB status automatically for the duration of the contract.  However, long-term contracts (five years or more) require WOSBs to be certified under the Rule.

*DBL Law Clerk Asa Bell contributed to this article.