Starting October 15, in a stepped-up effort to ensure that all applicants are eligible, the U.S. Small Business Administration will no longer allow women-owned small businesses or economically disadvantaged women-owned small businesses to self-certify that they meet the requirements for the Procurement Program for Women-Owned Small Business Concerns.
That program enables these categories of businesses to compete for set-aside or sole source contracts with the goal of awarding at least 5% of contracts to these businesses, a goal that the government surpassed in 2019 with $26 billion in total contracts awarded. Women-owned small businesses are defined as those at least 51% owned by one or more women who are U.S. citizens, while the separate economically disadvantaged category includes those with a net worth of less than $750,000, not including primary home equity and interest in the business.
Going forward, the SBA will require that these businesses seek an official government-issued certification, which means that owners will have to create an account and upload required documentation. The process is free, unless business owners decide to continue to employ fee-based third parties to certify themselves, which will continue to be allowable—as long as proof of certification is uploaded with the rest of the paperwork.
Businesses will be required to update this certification information yearly and recertify every three years. It’s possible that the SBA will ask for more information or independently verify the information that’s been presented before granting eligibility to a business. Owners must supply complete, accurate, up-to-date information and keep the SBA current on any changes that would impact eligibility.
Within 15 days of submitting the application package, business owners will receive a response from the SBA either approving the application or explaining what more the owner needs to do in terms of either providing more information or clarifying what’s already been provided. Within 90 days of receiving a completed application, the SBA will make a final decision, although the agency will prioritize those who win a contract during the process as long as the contracting officer alerts the agency.
If a business has been flagged for decertification for whatever reason, SBA will send a written note saying why, and that small must respond within 20 days addressing the any and all reasons given. If the decertification happens anyway, or if a business is deemed ineligible in the first place, the owner can reapply after 90 days.
Women owned small businesses and economically disadvantaged women-owned small businesses that already have set-aside contracts are not required to become certified to continue those contracts after October 15, unless they have been in place for at least five years. But if you’re looking to put in for new set-aside or sole-source contracts, there is no time like the present to get started collecting the necessary paperwork and submitting your offer or proposal.