What Is The Women-Owned Small Business Federal Contract Program?

The government contracting industry is booming now more than ever. After posting a record-breaking $682 billion total awarded federal contracts in 2020 alone, Kevin Plexico’s industry forecast is pointing towards a favorable trend in the coming years. According to Deltek’s Senior Vice President for Information Solutions, more high-paying contracting opportunities will be available this 2022, especially for small businesses.

However, women-owned small businesses still lag behind despite this seemingly promising trajectory. It has been three decades since the government has set a 5% women-owned business contracting goal. This means that federal agencies should award 5% of their total prime and subcontracting dollars to certified women-owned businesses each year. However, during this period, this goal was only achieved twice–in 2015 and 2019.

There has been an ever-growing gender pay gap everywhere in the commercial industry, particularly in the field of government contracting. And that is why the government is intensifying its assistance programs to help small disadvantaged businesses thrive in the government contracting industry.

History of the Women-Owned Small Business Federal Contract Program

Women remained on the sidelines for the longest time, especially in the government contracting industry. Countless amendments and resounding cries for change happened before the Women-Owned Small Business Federal Contract Program that you know today came into existence.

Small Business Act

World War II took its toll on ordinary citizens. Back then, small business owners were on the brink of extinction, especially with the looming threat of war-induced materials and labor shortages. On top of that, huge corporations are squeezing small businesses out of the government contracting industry since they dominate every defense contract opportunity and financial assistance.

If small businesses succumbed to the war-time struggles that plagued them, the country would surely crumble to its feet.  And that is why, in 1953, the Small Business Act came into fruition.

According to Congress, the Small Business Act will ensure that small businesses enjoy a fair and free federal marketplace by mandating government agencies to allocate a fair proportion of their prime contracts and subcontracts to small businesses. Additionally, this Act of Congress gave birth to the U.S. Small Business Administration (SBA), the official federal agency that promotes and protects the rights and interests of small businesses.

Women’s Business Ownership Act

A few years after the promulgation of the Small Business Act, the government agencies were tasked to develop realistic federal contracting goals that aim to maximize the potential of small businesses owned and controlled by individuals who are socially and economically disadvantaged. However, this effort did not include the procurement goals for women-owned small businesses.

It was not only during 1979, a year after the effort had been initiated, that WOSB finally received its own set of contracting goals—settling at a meager 0.2% of all federal contracts under A National Program for Women’s Business Enterprise. Although it grew to 1% in 1988, it is still deemed insufficient to uplift women entrepreneurs.

The growing unrest among women business leaders and advocates became a catalyst for the P.L. 100-533 or Women’s Business Ownership Act of 1988. This authorized the SBA to establish annual WOSB procurement goals, added the women-owned small businesses to the list of priority businesses for subcontracting plans, and founded the National Women’s Business Council (NWBC).

Federal Acquisition Streamlining Act

In the fiscal year 1990, the procurement goal for women-owned small businesses was stagnant at 1.3%, despite having one-third of the nation’s total number of companies owned and managed by women. Advocates of WOSB pushed for better conditions in the industry; thus, the Federal Acquisition Streamlining Act of 1994, or FASA, was born.

Under FASA, government agencies’ standard annual procurement goal for WOSB was increased to 5%. This rate has been in effect from 1996 until the present day.

WOSB Set-asides

Set-asides are federal contracts that exclusive to qualified small businesses. The government limits competition for this type of contract to qualified small businesses. It is the goal of every federal agency to award 5% of their prime contracts and subcontracts to WOSB.

However, despite a promising 5% federal procurement goal for WOSB, government agencies are all having difficulty achieving this.

In the fiscal year 1990, the procurement goal for women-owned small businesses remained stagnant at 1.3%, despite having one-third of the nation’s total number of companies owned and managed by women. Advocates of WOSB pushed for better conditions in the industry; thus, the Federal Acquisition Streamlining Act of 1994, or FASA, was born.

WOSB can’t enjoy the same benefits compared to the other contracting assistance programs, such as the SBA’s 8(a) program that lets qualified small disadvantaged businesses compete for set-aside contracts or be eligible for sole-source awards. That is why, under FASA, the standard annual procurement goal of government agencies for WOSB was increased to 5%. This rate has been in effect from 1996 until the present day.

The Women Business Leaders In The Government Contracting Industry Today

Did you know that compared to 20 years ago, there are 114% more businesses that are owned and managed by women here in the U.S? In fact, in 2019, more than 12 million businesses in the U.S. are owned by women. They generate roughly $2 trillion per year in revenue. Despite these seemingly good numbers, the ratio between men’s and women-owned businesses is still disproportionate.

Unfortunately, this disparity has grown even wider than before. The onslaught of the COVID-19 pandemic has gravely affected women-owned businesses across the U.S. According to this study by the U.S. Chamber of Commerce, compared to men-owned small businesses, WOSB is uncertain about the future of their investment, and they are not confident enough to say that their business will make a strong recovery by the end of the pandemic.

The federal government has been doling out federal assistance to impacted entrepreneurs through the Coronavirus Aid, Relief, and Economic Security Act or CARES Act. However, this only provided temporary relief from the effects of the COVID-19 pandemic. To combat this looming threat to women business leaders, the federal government, through U.S. Small Business Administration, is offering support and guidance with the Women-Owned Small Business Federal Contract Program.

An Overview of The Women-Owned Small Business Federal Contract Program

The WOSB Federal Contracting Program is managed by the Small Business Administration (SBA), the official federal organization that promotes and protects the rights of small businesses. WOSB is among the government’s initiatives to level the playing field for disadvantaged businesses.

The WOSB aims to level the playing field for women small business leaders, especially for economically disadvantaged women-owned businesses (EDWOSB).

What are the federal contracting goals of the WOSB federal contracting program? 

Under the Women-Owned Small Business Federal Contract Program, government agencies are required to:

• Award 5% of its total federal contracting budget, including prime contracts and subcontracts, to qualified women-owned small businesses. The government agency should also fulfill their annual Small Business Goaling Report to measure progress in meeting these goals for transparency purposes.

• Earmark set-aside contracts that are valued at greater than $10,000 but less than $250,000. Set-aside contracts are federal contracts that are exclusive to small businesses. Learn more about this type of contract here.
• Grant sole-source set-aside federal contracts whenever a need for it arises. Sole-source contracts are usually awarded under the following conditions: (1) only one business or organization is available and capable of the contract, and (2) the current situation of the federal contract requires urgent action).
• In general, government agencies must give preferential consideration in awarding federal contracts to specific small businesses, such as women-owned small businesses and economically disadvantaged women-owned small businesses.

What are the requirements to become eligible for the WOSB federal contracting program? 

There are a few conditions laid out to become eligible for the WOSB program, such as:

• Your business should conform to the SBA size standards
• Your business should be owned and controlled by at least 51% of women who are recognized U.S. citizens
• The women of your business should be part of the crucial decision-making process
• Become certified by any of the following: a federal agency, the Small Business Administration, and approved third-party certifiers. You can also self-certify at beta.Certify.sba.gov.

Another subset of the WOSB called the EDWOSB, or Economically Disadvantaged Women-Owned Small Business, specifically catered to firms who need further assistance financially. To qualify for this program under the WOSB, here are the conditions you must meet:

• Satisfy all the requirements stated in the WOSB federal contracting program
• The personal net worth of the women who own and control the business should each amount to $750,000 or less.
• The gross income averaged within the last three years of the women who own and control the business should each amount to $350,000 or less.
• The women who own and control the business’s personal assets should amount to $6 million or less.

How can you acquire WOSB or EDWOSB certification?

To ensure that the federal assistance offered in this program will be received by its intended beneficiaries, the government has enforced a strict certification process for all interested federal contractors.

Determine your eligibility for WOSB or EDWOSB certification

In addition to fulfilling your program eligibility requirements stated previously, you can also use this “Am I Eligible?” questionnaire by the SBA to confirm your eligibility for the WOSB or EDWOSB program. Furthermore, this questionnaire also determines your business’s eligibility for other federal contracting assistance programs should you be qualified for any.

Prepare your requirements for your WOSB and EDWOSB certification process

The SBA is stringent in filtering out the applications for this program. Aside from fulfilling the conditions stated above, your NAICS code should be part of the recognized industries where women entrepreneurs are deemed to be underrepresented. Here is the list of the eligible NAICS codes for women-owned small businesses.

Moreover, the SBA hosts a website that will guide you through this entire process. And to paint you a clearer picture of the process you will undertake to get certified, here is a checklist of the documents you have to prepare before you apply for WOSB or EDWOSB certification:

1. Registration at SAM.gov

An active registration at the System for Award Management website or SAM.gov is necessary for businesses looking to be certified under the WOSB federal contracting program and for businesses who desire to become fully recognized government contractors.

Know how you can register at SAM.gov by scrolling through below.

2. Legitimate proof of U.S. citizenship

The documents that are applicable to prove your U.S. citizenship are a state-issued birth certificate, unexpired passport, or a naturalization certificate.

If your name differs from the citizenship document you plan to submit, such as when you get married and decide to use your spouse’s surname, you have to submit a proof of name change. Some of the accepted documents are as follows: marriage license, official name change, unexpired military ID, and unexpired passport.

3. If your business is presently certified through other channels, present the necessary certificates

This requirement is only applicable to small businesses that have applied for prior certification through the following channels:

• 8(a) Business Development Program

If you are a participant in this small business federal contracting program, you have to provide your latest annual review letter. If your business is still in the first year of the program, instead of the yearly review letter, you can submit your initial approval letter.

• Approved third-party certifiers

For your WOSB application, you have to present the certificate that was granted to you by any of the four third-party certification organizations that are accredited by the SBA. Here is the list of the approved third party certifiers:

• El Paso Hispanic Chamber of Commerce
• National Women Business Owners Corporation
• U.S. Women’s Chamber of Commerce
• Women’s Business Enterprise National Council

• Center for Verification and Evaluation (CVE)

If you have existing certification from the CVE, submit the necessary document accordingly.

4. Business ownership and structure

As the leader of your small business, you have to submit proof that you are the direct owner of your company, such as:

• Prepare your trust agreement if your trust currently holds your ownership interest
• Submit a letter of explanation if you have any executory agreements.

On top of that, here are the requirements you will need to arrange depending on your business structure.

Sole Proprietorship

• If applicable, submit your Doing Business As (DBA) document or your Trade Name Certificate with the state filling seal.

Partnership

• Similar to the Sole Proprietorship, you need to submit your DBA or Trade Name Certificate.
• Present your partnership agreement or any amendments.

Limited Liability Company (LLC)

• If applicable, submit your Doing Business As (DBA) document or your Trade Name Certificate with the state filling seal.
• Present your Operating Agreement, including all amendments, if any.
• Submit your Articles of Organization, including all of its amendments that are dated and bear the state filling seal.
• If applicable, include your Joint Venture agreements and Buy/Sell agreements.
• If your business is operating in another state, you should also submit foreign filing documentation coming from that state, including your certificate of good standing from the original domestic state.

Corporation

• Submit your Articles of Incorporation.
• If your business is operating in another state, you should also submit foreign filing documentation coming from that state, including your certificate of good standing from the original domestic state.
• Present copies of stock certificates.
• Submit your Stock Ledger formatted in a chart and includes a detailed listing of all actions, such as the shares’ transfer and/or cancellation.
• Present your Corporate Bylaws, including any amendments. The Bylaws must be signed. Otherwise, you should provide a meeting minutes where the Bylaws are duly acknowledged and accepted.
• If you cannot provide the Corporate Bylaws, your shareholders’ agreements may suffice, depending on the laws of the state where your business is registered.
• If applicable, provide your DBA or Trade Name Certificate with a state filing seal.
• Submit the relevant Business Documents such as Joint Venture agreements, Buy/Sale agreements, and signed minutes of the recent meeting regarding the elections of your officers and directors.

5. Your career profile

• Provide the latest résumé that reflects current titles and roles and a detailed explanation of the previously held roles.
• Present proof of current technical licenses and certifications, if applicable.
• And if needed, also submit a Letter of Explanation.

6. Add the profiles of your business’s individual contributors

• Highest officer owner (For EDWOSB applicants, the financial section is required to be filled out)
• Additional firm owners (For EDWOSB applicants, the financial section is required to be filled out)
• Current Board Members that are included in the operating agreement, bylaws, and/or meeting minutes (For EDWOSB applicants, the financial section is required to be filled out)
• Your spouse, if applicable. (For EDWOSB applicants only)

7. For EDWOSB applicants, submit the following supplemental documents

• Personal tax returns and all schedules for the past three years
• Business tax returns and all schedules for the past three years, or depending on how long you have been in business
• W-2s, 1099s for the past three years. If you cannot provide it, supply a letter of explanation regarding the source of income stated in your personal tax return, which is equal to the total wages for each specific tax year.
• If you missed filing your tax, acquire an IRS Verification of Non-filing Letter or VNF for any year taxes have not been filed.

If requested, provide your IRS Tax transcripts.

Apply for the WOSB or EDWOSB certification

There are two ways you can apply for a WOSB or EDWOSB certification—you can self-certify at https://beta.certify.sba.gov/ or apply through SBA’s four accredited third-party certifiers.

Self-certification

To make your certification smoother and faster, prepare all the documents you need to submit listed in the checklist above. And more importantly, you have to remember to register your business at SAM.gov first.

Employer Identification Number (EIN)

To file and pay for your business’s taxes, you have to have your EIN. If you still don’t have one yet, you can request one at Internal Revenue Service or the IRS website.

CAGE Code / NCAGE Code

The Commercial and Government Entity Code or CAGE Code is assigned by the federal government when you finish your registration at SAM.gov. This is only applicable to businesses that are built within the country and its territories.

The NATO Commercial and Government Entity Code or NCAGE Code is given to government contractors outside the U.S. and its territories. However, unlike the CAGE code, where you can get yours after registering at SAM, you must request your NCAGE code before your SAM.gov application.

Unique Entity Identifier (UEI)

To streamline the entire SAM.gov registration, the federal government has transitioned into requiring applicants to acquire their DUNS Number to the UEI. You will automatically receive your UEI after your SAM.gov registration has concluded.

Banking and financial information

SAM.gov will require you to send them this information to help you set up your Electronic Funds Transfer (EFT). This is how you will receive your contract payments from the federal government.

Complete your SBA profile

And lastly, don’t forget to fulfill your SBA profile right after finishing your SAM.gov registration. You should put a clear and concise description of your business and your services in your SBA profile.

Your SBA profile will be searchable on SBA’s database called Dynamic Small Business Search (DSBS). This search tool is used by federal agencies who are scouting for potential small business government contractors who may be fit to execute the contract.

What are the learning resources available for WOSB and EDWOSB?

Now that you have come this far, you might have realized that becoming certified as a women-owned small business or economically-disadvantaged women-owned small business will take a lot. And that is why you need all the help you can get to help you thrive in this industry.

Office of Women’s Business Ownership (OWBO)

Since its establishment in 1979, the U.S. SBA’s Office of Women’s Business Ownership has been dedicated to supporting women in the government contracting industry.

By coordinating with SBA’s district offices, which can be found in almost every state, they provide training, seminars, and counseling to help women win more federal contracts. Additionally, OWBO also hosts matchmaking events so WOSB and EDWOSB can meet established government contractors and federal agencies.

Furthermore, OWBO is also the one overseeing the Women’s Business Centers (WBCs). These learning centers offer accessible counseling and training to all women entrepreneurs.

National Women’s Business Council (NWBC) 

The National Women’s Business Council is an independent federal advisory organization that offers counsel to several important government offices, including the President. The NWBC serves as the women’s voice in the government when discussing essential matters that affect women entrepreneurs.

On top of that, the NWBC presents several learning opportunities for women business leaders, such as their monthly webinars and roundtable discussions to bridge women to policymakers. The council also hosts public meetings to reflect the council’s latest goals and agenda and publishes annual reports to serve as reference materials for women entrepreneurs and lawmakers alike.

Procurement Technical Assistance Centers (PTAC)

Managed by the Small Business Administration, the Procurement Technical Assistance Centers help government contractors navigate the confusing world of government contracting. PTACs, which can be found all over the country, help small businesses by:

• Evaluate your business’s readiness to enter the government contracting industry
• Guide you towards the registration process to become a government contractor
• Assess your eligibility to apply for small business certifications, such as the women-owned small business federal contracting program
• Assist you in finding previously awarded federal contracts that are similar to your business to give you reference