This post is the second in a series I am writing about the SBA's WOSB program in an attempt to better understand and answer my questions surrounding it.

I ended my last post with the following questions: Why would an organization want to get certified?  And, what exactly is the WOSB program?  Let me start by dissecting the latter, but before I do, we need a bit of legislative history.

How did the WOSB Program Come About?
In 1953, the 83rd Congress passed the Small Business Act (15 U.S.C. 637).  This act created what we know as the Small Business Administration (SBA) today.  Throughout the interim years, this act has been amended by various congressional authorities.  In 2000, the 106th Congress passed HR 4897 - Equity in Contracting for Women Act of 2000, which amended the Small Business Act to include women-owned businesses as parties that can receive set-aside Federal dollars.  The 2000 amendment was preceded by the Federal Acquisition Streamlining Act of 1994 (FASA) which established the goal of a 5% allocation of federal prime contract and subcontract dollars to women-owned small businesses.  Since 2000, the program has been amended, to remove self-certification (2016 NDAA), the ability to set aside funds for sole-source contract awards in certain industries, with contract award caps (2015 NDAA), and to remove contract award maximums in competitive bids (2013 NDAA).  I think that is enough of a history lesson, let's move on.

What is the WOSB Program?
In short, the WOSB Program allows Federal Contracting Officers (FCOs) to restrict competition to two or more WOSBs in industries where WOSBs are underrepresented and even, in some industries, allows for sole-source contract award.  Point of clarification, FCOs are government employees who have the ability to terminate, amend and execute purchasing contracts on behalf of the government.  FCOs, in most Federal government positions, are required to become certified by taking specific training provided by the Federal Acquisition Institute (FAI). 

Who determines industry representation/under-representation?
In my first post of this series, I provided a link to the 2016 NAICS list for eligible industries, but did not specify who made/makes the determination that WOSBs are under-represented.  After the Equity in Contracting for Women Act of 2000 was passed, the SBA conducted a study to determine the industries in which WOSBs are under-represented, which was published September 2001.  This study was found to be flawed by the National Academy of Sciences in 2005.  Subsequently, the SBA contracted with the RAND Corporation to take another stab at it.  The RAND Corporation study identified 83 NAICS codes/industries having WOSBs under-represented.  The study of under-representation has been taken over by the US Department of Commerce, which, as of December 2015, has concluded that 113 industry groups are now eligible under the program.  Let me point something out, while the total dollar amount per year allocated to WOSBs has increased and purportedly met the 5% goal, the number of under-represented industries has increased… Something seems off.  Is this program really working to help a larger number of WOSBs get access to Federal dollars?  Or is it awarding larger contracts to fewer WOSBs?  I guess we will have to explore in a future post.

Why should my organization get certified for the WOSB Program?
Well, if your firm can qualify for the program, you get access to federal dollars with limited or maybe even no competition.  The benefits seem self-explanatory, special access to contracts from the largest spender in the world, the US Federal Government, but there are ancillary benefits, too.  As a sourcing professional, I come into contact with a variety of firms in a variety industries.  One of the common questions I am asked to include when crafting bid packages is “Is your firm recognized as a minority/women/veteran-owned business?”  More and more, companies are placing an emphasis on diversifying their supply bases, especially if they do business with the Federal Government.  Another aspect to consider is marketing.  Being a federally recognized women-owned business, certified by one of the third-party certifiers, allows your firm to include that fact on advertising and marketing material.  Some of the third-party certifier non-profits have programs and initiatives that encourage consumers to buy from women-owned firms, opening up even more revenue opportunities for your firm.  In my opinion, you should at the very least consider getting your firm certified.  It couldn’t hurt, could it?

Now we have an idea of how to qualify, how the program came about, what the program is, and why an organization would want to get certified.  We should explore issues and concerns with the program, specifically, is the program working as intended?  Why has the program been investigated by the Government Accountability Office (GAO) and the Office of Inspector General (OIG)?  Keep following the Strategic Sourceror for the next post in this series.  Thanks for reading.
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Jonathan Groda

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  1. Why do race, ethnicity, and sex need to be considered at all in deciding who gets awarded a contract? It's good to make sure contracting programs are open to all, that bidding opportunities are widely publicized beforehand, and that no one gets discriminated against because of skin color, national origin, or sex. But that means no preferences because of skin color, etc. either--whether it's labeled a "set-aside," a "quota," or a "goal," since they all end up amounting to the same thing. Such discrimination is unfair and divisive; it breeds corruption and otherwise costs the taxpayers and businesses money to award a contract to someone other than the lowest bidder; and it's almost always illegal—indeed, unconstitutional—to boot (see 42 U.S.C. section 1981 and this model brief: ). Those who insist on engaging in such discrimination deserve to be sued, and they will lose.