A Decade Later, Final Rule for Women-Owned Small Business Program Published

The Small Business Administration recently published its long-awaited final rule regarding the Women-Owned Small Business (WOSB) program, also referred to as the Economically Disadvantaged Women-Owned Small Business (EDWOSB) program. 75 Fed. Reg. 62258 (October 7, 2010). This program, created nearly ten years ago by a law enacted during the Clinton Administration, was subject to numerous delays through subsequent administrations and litigation. With the publication of the final rule, the SBA expects to start setting aside contracts for WOSBs in early 2011.

The WOSB program was created to aid the federal government in achieving its goal of awarding five percent of federal contracting dollars to women-owned businesses. To be eligible to participate in the Women-Owned Small Business program, a firm must:

(1)be 51 percent owned and controlled by one or more women, and primarily managed by one or more women, who must be U.S. citizens,

(2)be “small” in its primary industry in accordance with SBA’s size standards for that industry, and

(3)be deemed “economically disadvantaged,” i.e., its owners must demonstrate economic disadvantage in accordance with the requirements set forth in the final rule.

Importantly, however, there are exceptions to the requirement that the firm be “economically disadvantaged.” The final rule identifies 83 industries (identified by “NAICS” codes) in which women-owned small businesses have been determined to be under-represented or substantially under-represented in federal procurements. Businesses in any of these 83 industries do not have to prove an economic disadvantage in order to be eligible to participate in the WOSB program.

Once the rule is fully implemented, agencies will be authorized to set aside specifically for WOSB firms manufacturing contracts of $5 million or less and $3 million or less for other contracts. WOSBs may self-certify their eligibility for the program, or they can be certified by third parties. Businesses that self-certify will need to submit documents demonstrating their eligibility.