As we previously reported in our May 4, 2015 Blog Post, the SBA issued a Proposed Rule on May 1, 2015 implementing those provisions of the 2015 NDAA which provide for sole source contracting opportunities for Women-Owned Small Businesses (WOSB) and Economically Disadvantaged Women-Owned Small Businesses (EDWOSB). Comments in responses to this Proposed Rule were due June 30, 2015.
Based on the comments submitted to the SBA, it will be interesting to see what SBA does with the Final Rule. In particular, the issue is with respect to certification of businesses as a WOSB or EDWOSB. Currently, there are two methods of certification: (1) self-certification by uploading documents into a repository (this is at no cost to the applicant/registrant); and (2) certification through an SBA-approved third-party organization that handles WOSB/EDWOSB certification (to our knowledge there are 2 such organizations and there is a fee associated with this service).
With respect to self-certification, any time you allow individuals to self-certify, there is always the possibility of program abuse so no further discussion is necessary here. With respect to the third-party certification process, the GAO conducted an investigation and issued a report in October 2014 titled: "Women-Owned Small Business Program: Certifier Oversight and Additional Eligibility Controls Are Needed." In particular, the GAO found that the SBA performs minimal oversight of third-party certifiers and had not yet developed procedures which provide reasonable assurance that only eligible businesses obtain set-aside contracts.
Section 825 of the 2015 NDAA, which authorized sole source contracts to WOSB/EDWOSB, eliminated self-certification as an option for program certification/participation. Specifically, Section 825 included the requirement that a firm be certified as a WOSB/EDWOSB by a Federal Agency, a State Government, the SBA or a national certifying entity approved by SBA. The SBA, in the comments to the Proposed Rule, while recognizing this requirement, essentially indicated that because creation of such a certification program would take time, they were proceeding with the proposed rule because of their view that Congress did not intend to halt the existing WOSB program until such time as the SBA is able to establish the infrastructure and and issue regulations implementing the statutory certification requirement. As such, the Proposed Rule would enable WOSB/EDWOSB to obtain sole source contracts under the current certification process(es).
Many organizations and businesses have submitted comments supporting the SBA's decision to proceed with the Proposed Rule while keeping the status quo in place as it relates to program certification. Significantly, the SBA Inspector General submitted comments opposed to the Proposed Rule to the extent that it does not simultaneously create a formal certification program. As a small, women-owned small business, Holomua Consulting Group is incredibly supportive of enabling WOSB/EDWOSB to gain access to sole source contracting opportunities sooner rather than later in order to bring parity to the various set-aside program. Notwithstanding this support, we are also mindful that by ignoring the certification requirement in the NDAA, the potential for program abuse and ineligible companies receiving sole source contracts is great. Like we said, it will be interesting to see what the SBA does - expect a further update later in the year.
With respect to self-certification, any time you allow individuals to self-certify, there is always the possibility of program abuse so no further discussion is necessary here. With respect to the third-party certification process, the GAO conducted an investigation and issued a report in October 2014 titled: "Women-Owned Small Business Program: Certifier Oversight and Additional Eligibility Controls Are Needed." In particular, the GAO found that the SBA performs minimal oversight of third-party certifiers and had not yet developed procedures which provide reasonable assurance that only eligible businesses obtain set-aside contracts.
Section 825 of the 2015 NDAA, which authorized sole source contracts to WOSB/EDWOSB, eliminated self-certification as an option for program certification/participation. Specifically, Section 825 included the requirement that a firm be certified as a WOSB/EDWOSB by a Federal Agency, a State Government, the SBA or a national certifying entity approved by SBA. The SBA, in the comments to the Proposed Rule, while recognizing this requirement, essentially indicated that because creation of such a certification program would take time, they were proceeding with the proposed rule because of their view that Congress did not intend to halt the existing WOSB program until such time as the SBA is able to establish the infrastructure and and issue regulations implementing the statutory certification requirement. As such, the Proposed Rule would enable WOSB/EDWOSB to obtain sole source contracts under the current certification process(es).
Many organizations and businesses have submitted comments supporting the SBA's decision to proceed with the Proposed Rule while keeping the status quo in place as it relates to program certification. Significantly, the SBA Inspector General submitted comments opposed to the Proposed Rule to the extent that it does not simultaneously create a formal certification program. As a small, women-owned small business, Holomua Consulting Group is incredibly supportive of enabling WOSB/EDWOSB to gain access to sole source contracting opportunities sooner rather than later in order to bring parity to the various set-aside program. Notwithstanding this support, we are also mindful that by ignoring the certification requirement in the NDAA, the potential for program abuse and ineligible companies receiving sole source contracts is great. Like we said, it will be interesting to see what the SBA does - expect a further update later in the year.
| HCG Comments re Proposed Rule 6.29.15 |
