If you’re a diverse company, the federal government has specific programs that allow you to compete for contracts that are set aside for your diverse status. What are these programs? There is a variety, but the ones that we are highlighting in this blog post are the Women-Owned Small Business (WOSB) Federal Contracting Program; the 8(a) Business Development Program; and the HUBZone Program.
If you’ve been following the recently proposed changes in the WOSB program, you might note that Contracting Officers currently must verify the WOSB documentation during the bid process. Although recently proposed changes may alter this process, it begs the question – are other diverse programs going through this same verification process? And if not, what are the other differences between these contracting assistance programs? We take a look at these differences below.
The Women-Owned Small Business (WOSB) Contracting Program
- Eligibility: Be at least 51% owned and controlled by women who are U.S. citizens and have women manage day-to-day operations and make long-term decisions.
- Certification Process: You can self-certify or go through third-party certification such as Women’s Business Enterprise National Council (WBENC).
- Contract Award Process: The contracting officer must verify WOSB documentation. For sole-source authority, the GAO report indicates that “the FAR’s requirement that contracting officers justify, in writing, why they do not expect other WOSBs or EDWOSBs to submit offers on a contract is stricter under the WOSB program,” (GAO, 2019, p.31, para. 2).
The 8(a) Business Development Program
- Eligibility: Be a small business; not already have participated in the 8(a) program; be at least 51% owned and controlled by U.S. citizens who are economically and socially disadvantaged; be owned by someone whose personal net worth is $250,000 or less; be owned by someone with $4 million or less in assets; have the owner manage day-to-day operations and also make long-term decisions; have all principals demonstrate good characters; and show potential for success and be able to perform successfully on contracts.
- Certification Process: Use the cerify.SBA.gov website.
- Contract Award Process: The contracting officer does not have to verify 8(a) documentation.
The HUBZone Program
- Eligibility: Be a small business; be at least 51 percent owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, a Native Hawaiian organization, or an Indian tribe; have its principal office located in a HUBZone; and have at least 35% of its employees live in a HUBZone.
- Certification Process: You must be certified by the SBA. There are six steps outlined on the SBA website.
- Contract Award Process: The contracting officer does not have to verify HUBZone documentation.
Though these programs are bound to have their differences, the process of awarding contracts for WOSBs is significantly different than the other two programs, as noted above. Programs such as the 8(a) Business Development or HUBZone do not have to go through the same in-depth process before being awarded a contract, and therefore, those programs are often awarded dollars that were supposed to be for WOSBs.
In fact, the oversight on these issues resulted in the U.S. Government Accountability Office conducting a report on what needs to be addressed. In this report, the GAO explains that from fiscal years 2012 through 2017, “98 percent of total dollars obligated for contracts to all women-owned small businesses in the WOSB-program-eligible industries were not awarded under the WOSB program,” (GAO, 2019, p. 27, para. 1).
It’s alarming that federal contracting dollars for women-owned small businesses are not being awarded to that diverse group. However, the proposed changes from the SBA as a result of the GAO report show that many changes will be coming to the WOSB program.
United States Government Accountability Office (GAO) (2019). Women-Owned Small Business Program. Retrieved from https://www.gao.gov/assets/700/697580.pdf.
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