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The Women-Owned Small Business Contract Program: Legislative and Program History

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SBA Women-Owned Small Business Federal
February 10August 5, 2021 , 2021
Contracting Program
Robert Jay Dilger
The Small Business Administration’s (SBA’s) Women-Owned Small Business (WOSB) Federal The Small Business Administration’s (SBA’s) Women-Owned Small Business (WOSB) Federal
Senior Specialist in Senior Specialist in
Contracting Program is designed to provide greater access to federal contracting opportunities for Contracting Program is designed to provide greater access to federal contracting opportunities for
American National American National
WOSBs and economically disadvantaged women-owned small businesses (EDWOSBs). By WOSBs and economically disadvantaged women-owned small businesses (EDWOSBs). By
Government Government
doing so, the program aims to help federal agencies achieve their statutory goal of awarding 5% doing so, the program aims to help federal agencies achieve their statutory goal of awarding 5%

of their federal contracting dollars to WOSBs. of their federal contracting dollars to WOSBs.

Under this program, federal contracting officers may set aside federal contracts (or orders) for Under this program, federal contracting officers may set aside federal contracts (or orders) for
WOSBs (including EDWOSBs) in industries in which the SBA determines WOSBs are substantially underrepresented in WOSBs (including EDWOSBs) in industries in which the SBA determines WOSBs are substantially underrepresented in
federal procurement and for EDWOSBs exclusively in industries in which the SBA determines WOSBs are underrepresented federal procurement and for EDWOSBs exclusively in industries in which the SBA determines WOSBs are underrepresented
in federal procurement. The SBA has identified 364 six-digit North American Industry Classification System (NAICS) in federal procurement. The SBA has identified 364 six-digit North American Industry Classification System (NAICS)
industry codes (out of 1,023) in which federal agencies may set aside federal contracts exclusively for WOSBs (including industry codes (out of 1,023) in which federal agencies may set aside federal contracts exclusively for WOSBs (including
EDWOSBs) and 80 six-digit NAICS industry codes (out of 1,023) that may be set aside exclusively for EDWOSBs. EDWOSBs) and 80 six-digit NAICS industry codes (out of 1,023) that may be set aside exclusively for EDWOSBs.
Federal agencies may also award sole source contracts to WOSBs and EDWOSBs in eligible industries under the following Federal agencies may also award sole source contracts to WOSBs and EDWOSBs in eligible industries under the following
conditions: the contracting officer does not have a reasonable expectation that offers would be received by two or more conditions: the contracting officer does not have a reasonable expectation that offers would be received by two or more
eligible WOSBs and EDWOSBs; the award can be made at a fair and reasonable price; and the anticipated total value of the eligible WOSBs and EDWOSBs; the award can be made at a fair and reasonable price; and the anticipated total value of the
contract, including any options, does not exceed $4.5 million ($7 million for manufacturing contracts). contract, including any options, does not exceed $4.5 million ($7 million for manufacturing contracts).
To participate in the program, WOSBs must To participate in the program, WOSBs must
 be a small business (as defined by the SBA);  be a small business (as defined by the SBA);
 be at least 51% unconditionally and directly owned and controlled by one or more women who are U.S.  be at least 51% unconditionally and directly owned and controlled by one or more women who are U.S.
citizens; citizens;
 have women manage day-to-day operations and make long-term decisions; and  have women manage day-to-day operations and make long-term decisions; and
 be certified by a federal agency, a state government, the SBA, or a national certifying entity approved by  be certified by a federal agency, a state government, the SBA, or a national certifying entity approved by
the SBA. the SBA.
EDWOSBs must EDWOSBs must
 meet all the requirements of the WOSB contracting program;  meet all the requirements of the WOSB contracting program;
 be owned and controlled by one or more women, each with a personal net worth less than $750,000;  be owned and controlled by one or more women, each with a personal net worth less than $750,000;
 be owned and controlled by one or more women, each with $350,000 or less in adjusted gross income  be owned and controlled by one or more women, each with $350,000 or less in adjusted gross income
averaged over the previous three years; and averaged over the previous three years; and
 be owned and controlled by one or more women, each having $6 million or less in personal assets  be owned and controlled by one or more women, each having $6 million or less in personal assets
(including business value and primary residence). (including business value and primary residence).
The WOSB program’s legislative history is more complicated than other small business contracting programs, primarily due The WOSB program’s legislative history is more complicated than other small business contracting programs, primarily due
to the distinctions between WOSBs and EDWOSBs and among underrepresented, substantially underrepresented, and other to the distinctions between WOSBs and EDWOSBs and among underrepresented, substantially underrepresented, and other
NAICS codes. These distinctions were designed to shield the WOSB program from legal challenges related to the heightened NAICS codes. These distinctions were designed to shield the WOSB program from legal challenges related to the heightened
level of legal scrutiny applied to contracting preferences after the Supreme Court’s decision in level of legal scrutiny applied to contracting preferences after the Supreme Court’s decision in Adarand Constructors, Inc. v.
Pena
(1995), which involved contracting preferences for small disadvantaged businesses. The Court found in that case that (1995), which involved contracting preferences for small disadvantaged businesses. The Court found in that case that
all racial classifications, whether imposed by federal, state, or local authorities, must pass strict scrutiny review. all racial classifications, whether imposed by federal, state, or local authorities, must pass strict scrutiny review.
An unintended consequence of these distinctions has been the SBA’s difficulty in defining these terms, which contributed to An unintended consequence of these distinctions has been the SBA’s difficulty in defining these terms, which contributed to
a 10-year delay in the program’s implementation and may help to explain why it took nearly six years for the SBA to a 10-year delay in the program’s implementation and may help to explain why it took nearly six years for the SBA to
implement its own WOSB certification process as required by P.L. 113-291, the Carl Levin and Howard P. “Buck” McKeon implement its own WOSB certification process as required by P.L. 113-291, the Carl Levin and Howard P. “Buck” McKeon
National Defense Authorization Act for Fiscal Year 2015. That act prohibited small businesses from self-certifying their National Defense Authorization Act for Fiscal Year 2015. That act prohibited small businesses from self-certifying their
eligibility for the WOSB program to ensure the program’s contracts are awarded only to intended recipients. eligibility for the WOSB program to ensure the program’s contracts are awarded only to intended recipients.
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Contents
Introduction ..................................................................................................................................... 1
The WOSB Program’s Origins ........................................................................................................ 6
Federal Agency Small Business Procurement Goals and Executive Order 12138: A
National Program for Women’s Business Enterprise ............................................................. 6
Government-Wide Small Business Procurement Goals ............................................................ 78
WOSB Set-Asides ..................................................................................................................... 9 10
A Targeted Approach to Avoid Legal Challenges .................................................................... 11
WOSB Program Requirements ...................................................................................................... 12
Eligibility Requirements ......................................................................................................... 12
Certification............................................................................................................................. 1213
Defining Economic Disadvantage ........................................................................................... 1314
The 10-Year Delay in WOSB’s Implementation ........................................................................... 14
Mandated Updates of Underrepresented and Substantially Underrepresented NAICS
Codes .......................................................................................................................................... 16
Sole Source Award Authority ........................................................................................................ 17
Current Administrative Issues ....................................................................................................... 18
Current Oversight and Legislative Issues ...................................................................................... 19
Concluding Observations .............................................................................................................. 21

Figures
Figure 1. Small Business Contracting, Performance, by Type of Small Business, FY2005-
FY2019FY2020 ......................................................................................................................................... 9

Tables
Table 1. Women-Owned Small Business (WOSB) Contract Awards, Amount and
Percentage of Small Business Eligible Contracts, FY1995-FY2019FY2020 ........................................... 5

Contacts
Author Information ........................................................................................................................ 23

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SBA Women-Owned Small Business Federal Contracting Program

Introduction
The Small Business Administration’s (SBA’s) Women-Owned Small Business (WOSB) Federal The Small Business Administration’s (SBA’s) Women-Owned Small Business (WOSB) Federal
Contracting Program is one of several contracting programs Congress has approved to provide Contracting Program is one of several contracting programs Congress has approved to provide
greater opportunities for small businesses to win federal contracts. Congress’s interest in greater opportunities for small businesses to win federal contracts. Congress’s interest in
promoting small business contracting dates back to World War II and the outbreak of fighting in promoting small business contracting dates back to World War II and the outbreak of fighting in
Korea. At that time, Congress found that thousands of small business concerns were being Korea. At that time, Congress found that thousands of small business concerns were being
threatened by war-induced shortages of materials coupled with an inability to obtain defense threatened by war-induced shortages of materials coupled with an inability to obtain defense
contracts or financial assistance.1 In 1953, concerned that many small businesses might fail contracts or financial assistance.1 In 1953, concerned that many small businesses might fail
without government assistance, Congress passed, and President Dwight Eisenhower signed into without government assistance, Congress passed, and President Dwight Eisenhower signed into
law, the Small Business Act (P.L. 83-163). The act authorized the SBA. law, the Small Business Act (P.L. 83-163). The act authorized the SBA.
The Small Business Act specifies that it is Congress’s declared policy to promote the interests of The Small Business Act specifies that it is Congress’s declared policy to promote the interests of
small businesses to “preserve free competitive enterprise.”2 Congress indicated that one of the small businesses to “preserve free competitive enterprise.”2 Congress indicated that one of the
ways to preserve free competitive enterprise was to increase market competition by insuring that ways to preserve free competitive enterprise was to increase market competition by insuring that
small businesses received a “fair proportion” of federal contracts and subcontracts.3 small businesses received a “fair proportion” of federal contracts and subcontracts.3
Since 1953, Congress has used its broad authority to impose requirements on the federal Since 1953, Congress has used its broad authority to impose requirements on the federal
procurement process to help small businesses receive a fair proportion of federal contracts and procurement process to help small businesses receive a fair proportion of federal contracts and
subcontracts, primarily through the establishment of federal procurement goals and various subcontracts, primarily through the establishment of federal procurement goals and various
contracting preferences—including restricted competitions (set-asides), sole source awards, and contracting preferences—including restricted competitions (set-asides), sole source awards, and
price evaluation adjustment/preference in unrestricted competitions—for small businesses.4 price evaluation adjustment/preference in unrestricted competitions—for small businesses.4
Congress has also authorized the following: Congress has also authorized the following:
 government-wide and agency-specific goals for the percentage of federal contract  government-wide and agency-specific goals for the percentage of federal contract
and subcontract dollars awarded to small businesses generally and to specific and subcontract dollars awarded to small businesses generally and to specific
types of small businesses, including at least 5% to WOSBs;5 types of small businesses, including at least 5% to WOSBs;5

1 U.S. Congress, Senate Select Committee on Small Business, 1 U.S. Congress, Senate Select Committee on Small Business, Small Business Administration, committee print, 83rd , committee print, 83rd
Cong., 1st sess., August 10, 1953 (Washington, DC: GPO, 1953), p. iii. Also, see U.S. Congress, House Committee on Cong., 1st sess., August 10, 1953 (Washington, DC: GPO, 1953), p. iii. Also, see U.S. Congress, House Committee on
Banking and Currency, Banking and Currency, Small Business Act of 1953, report to accompany, 83rd Cong., 1st sess., May 28, 1953, H.Rept. , report to accompany, 83rd Cong., 1st sess., May 28, 1953, H.Rept.
83-494 (Washington, DC: GPO, 1953). For further information related to small business contracting, see CRS Report 83-494 (Washington, DC: GPO, 1953). For further information related to small business contracting, see CRS Report
R45576, R45576, An Overview of Small Business Contracting, by Robert Jay Dilger. , by Robert Jay Dilger.
2 15 U.S.C. §631(a); and P.L. 83-163, the Small Business Act of 1953 (as amended), see https://legcounsel.house.gov/ 2 15 U.S.C. §631(a); and P.L. 83-163, the Small Business Act of 1953 (as amended), see https://legcounsel.house.gov/
Comps/Small%20Business%20Act.pdf. Comps/Small%20Business%20Act.pdf.
3 U.S. Congress, House Committee on Small Business, 3 U.S. Congress, House Committee on Small Business, Small Business Contracting Program Improvements Act, report , report
to accompany H.R. 3867, 110th Cong., 1st sess., October 22, 2007, H.Rept. 110-400 (Washington, DC: GPO, 2007), p. to accompany H.R. 3867, 110th Cong., 1st sess., October 22, 2007, H.Rept. 110-400 (Washington, DC: GPO, 2007), p.
4. 4.
4 4 Set-aside is a commonly used term to refer to a contract competition in which only small businesses, or specific types is a commonly used term to refer to a contract competition in which only small businesses, or specific types
of small businesses, may compete. Set-asides can be total or partial, depending on whether the entire procurement, or of small businesses, may compete. Set-asides can be total or partial, depending on whether the entire procurement, or
just a severable segment of it, is restricted. just a severable segment of it, is restricted.
Sole source awards are noncompetitive procurements that are made after soliciting and negotiating with only one awards are noncompetitive procurements that are made after soliciting and negotiating with only one
source. source.
A A price evaluation adjustment/preference involves a reduction in the price of bids or offers by eligible parties (in this involves a reduction in the price of bids or offers by eligible parties (in this
case for small businesses located in a Historically Underutilized Business Zone (HUBZone). The reduction is generally case for small businesses located in a Historically Underutilized Business Zone (HUBZone). The reduction is generally
equivalent to a certain percentage of the price of the bid or offer. For example, a 10% price evaluation adjustment made equivalent to a certain percentage of the price of the bid or offer. For example, a 10% price evaluation adjustment made
to a $100,000 bid would result in the bid being reduced for comparative purposes by $10,000 to $90,000. $90,000 to a $100,000 bid would result in the bid being reduced for comparative purposes by $10,000 to $90,000. $90,000
would then be used in determining which bid or offer is lowest priced or represents the “best value” for the would then be used in determining which bid or offer is lowest priced or represents the “best value” for the
government. “Best value” is determined based on price and various government. “Best value” is determined based on price and various non-pricenonprice evaluation factors selected by the federal evaluation factors selected by the federal
agency. For more information related to best value see 48 C.F.R. §15.304. agency. For more information related to best value see 48 C.F.R. §15.304.
5 The current government-wide small business procurement goals are at least the following: 23% for all small 5 The current government-wide small business procurement goals are at least the following: 23% for all small
businesses (P.L. 100-656, the Business Opportunity Development Reform Act of 1988 (20%) and P.L. 105-135, the businesses (P.L. 100-656, the Business Opportunity Development Reform Act of 1988 (20%) and P.L. 105-135, the
Small Business Reauthorization Act of 1997 (23%)); 5% for small disadvantaged businesses (SDBs) (P.L. 100-656, the Small Business Reauthorization Act of 1997 (23%)); 5% for small disadvantaged businesses (SDBs) (P.L. 100-656, the
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 an annual Small Business Goaling Report to measure progress in meeting these  an annual Small Business Goaling Report to measure progress in meeting these
goals; goals;
 a general requirement for federal agencies to reserve (set aside) contracts that  a general requirement for federal agencies to reserve (set aside) contracts that
have an anticipated value greater than the micro-purchase threshold (currently have an anticipated value greater than the micro-purchase threshold (currently
$10,000) but not greater than the simplified acquisition threshold (currently $10,000) but not greater than the simplified acquisition threshold (currently
$250,000);6 and, under specified conditions, contracts that have an anticipated $250,000);6 and, under specified conditions, contracts that have an anticipated
value greater than the simplified acquisition threshold exclusively for small value greater than the simplified acquisition threshold exclusively for small
businesses.7 A businesses.7 A set-aside is a commonly used term to refer to a contract is a commonly used term to refer to a contract
competition in which only small businesses, or specific types of small businesses, competition in which only small businesses, or specific types of small businesses,
may compete; may compete;
 federal agencies to make  federal agencies to make sole source awards to small businesses when the award awards to small businesses when the award
could not otherwise be made (e.g., only a single source is available, under urgent could not otherwise be made (e.g., only a single source is available, under urgent
and compelling circumstances); and compelling circumstances);
 federal agencies to set aside contracts for, or grant other contracting preference  federal agencies to set aside contracts for, or grant other contracting preference
to, specific types of small businesses (e.g., 8(a) Business Development small to, specific types of small businesses (e.g., 8(a) Business Development small
businesses, Historically Underutilized Business Zone (HUBZone) small businesses, Historically Underutilized Business Zone (HUBZone) small
businesses, WOSBs, and service-disabled veteran-owned small businesses businesses, WOSBs, and service-disabled veteran-owned small businesses
(SDVOSBs));8 and (SDVOSBs));8 and

Business Opportunity Development Reform Act of 1988); 5% to women-owned small businesses (WOSBs) (P.L. 103-Business Opportunity Development Reform Act of 1988); 5% to women-owned small businesses (WOSBs) (P.L. 103-
355, the Federal Acquisition Streamlining Act of 1994); 3% to small businesses located in a HUBZone (P.L. 105-135, 355, the Federal Acquisition Streamlining Act of 1994); 3% to small businesses located in a HUBZone (P.L. 105-135,
the HUBZone Act of 1997—Title VI of the Small Business Reauthorization Act of 1997); and small businesses owned the HUBZone Act of 1997—Title VI of the Small Business Reauthorization Act of 1997); and small businesses owned
and controlled by a service-disabled veteran (SDVOSBs) (P.L. 106-50, the Veterans Entrepreneurship and Small and controlled by a service-disabled veteran (SDVOSBs) (P.L. 106-50, the Veterans Entrepreneurship and Small
Business Development Act of 1999). Business Development Act of 1999).
The federal government uses aspirational procurement goals instead of requiring federal agencies to award specific The federal government uses aspirational procurement goals instead of requiring federal agencies to award specific
percentages of federal contracts to various types of small businesses primarily to avoid legal challenges under the equal percentages of federal contracts to various types of small businesses primarily to avoid legal challenges under the equal
protection component of the Fifth Amendment’s Due Process Clause. See, for example, City of Richmond v. J.A. protection component of the Fifth Amendment’s Due Process Clause. See, for example, City of Richmond v. J.A.
Croson Co., 488 U.S. 469 (1989) (finding unconstitutional a municipal ordinance that required the city’s prime Croson Co., 488 U.S. 469 (1989) (finding unconstitutional a municipal ordinance that required the city’s prime
contractors to award at least 30% of the value of each contract to minority subcontractors) and Adarand Constructors, contractors to award at least 30% of the value of each contract to minority subcontractors) and Adarand Constructors,
Inc. v. Pena 515 U.S. 200 (1995) (finding that all racial classifications, whether imposed by federal, state, or local Inc. v. Pena 515 U.S. 200 (1995) (finding that all racial classifications, whether imposed by federal, state, or local
authorities, must pass strict scrutiny review). authorities, must pass strict scrutiny review).
6 The contracting officer must have a reasonable expectation that offers will be obtained from two or more responsible 6 The contracting officer must have a reasonable expectation that offers will be obtained from two or more responsible
small businesses (Rule of Two) that are competitive in terms of market prices, quality, and delivery of the goods or small businesses (Rule of Two) that are competitive in terms of market prices, quality, and delivery of the goods or
services being purchased. See P.L. 115-91, the National Defense Authorization Act for Fiscal Year 2018; 15 U.S.C. services being purchased. See P.L. 115-91, the National Defense Authorization Act for Fiscal Year 2018; 15 U.S.C.
§644(j)(1); and Federal Acquisition Regulation (FAR) §19.502-2. §644(j)(1); and Federal Acquisition Regulation (FAR) §19.502-2.
7 See FAR §19.203(c): 7 See FAR §19.203(c):
For acquisitions of supplies or services that have an anticipated dollar value exceeding the For acquisitions of supplies or services that have an anticipated dollar value exceeding the
simplified acquisition threshold … the contracting officer shall first consider an acquisition for the simplified acquisition threshold … the contracting officer shall first consider an acquisition for the
small business socioeconomic contracting programs (i.e., 8(a), HUBZone, SDVOSB, or WOSB small business socioeconomic contracting programs (i.e., 8(a), HUBZone, SDVOSB, or WOSB
programs) before considering a small business set-aside (see FAR §19.502-2(b)). However, if a programs) before considering a small business set-aside (see FAR §19.502-2(b)). However, if a
requirement has been accepted by the Small Business Administration (SBA) under the 8(a) requirement has been accepted by the Small Business Administration (SBA) under the 8(a)
Program, it must remain in the 8(a) Program unless the SBA agrees to its release in accordance Program, it must remain in the 8(a) Program unless the SBA agrees to its release in accordance
with 13 C.F.R. parts 124, 125, and 126. with 13 C.F.R. parts 124, 125, and 126.
Before setting aside an acquisition over the simplified acquisition threshold for small businesses, the Before setting aside an acquisition over the simplified acquisition threshold for small businesses, the
contracting officer must have a reasonable expectation that offers will be obtained from two or more contracting officer must have a reasonable expectation that offers will be obtained from two or more
responsible small businesses (Rule of Two) that are competitive in terms of market prices. See FAR responsible small businesses (Rule of Two) that are competitive in terms of market prices. See FAR
§19.502-2. §19.502-2.
8 For Minority Small Business and Capital Ownership Development Program (8(a) program) participants, see P.L. 95- 8 For Minority Small Business and Capital Ownership Development Program (8(a) program) participants, see P.L. 95-
507, A bill to amend the Small Business Act and the Small Business Investment Act of 1958 and 15 U.S.C. §637(a). 507, A bill to amend the Small Business Act and the Small Business Investment Act of 1958 and 15 U.S.C. §637(a).
For HUBZone participants, see P.L. 105-135, the HUBZone Act of 1997—Title VI of the Small Business For HUBZone participants, see P.L. 105-135, the HUBZone Act of 1997—Title VI of the Small Business
Reauthorization Act of 1997, and 15 U.S.CReauthorization Act of 1997, and 15 U.S.C. §657a. For WOSBs, see H.R. 5654, the Small Business Reauthorization §657a. For WOSBs, see H.R. 5654, the Small Business Reauthorization
Act of 2000, incorporated by reference in P.L. 106-554, the Consolidated Appropriations Act, 2001, and 15 U.S.CAct of 2000, incorporated by reference in P.L. 106-554, the Consolidated Appropriations Act, 2001, and 15 U.S.C.
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 the SBA and other federal procurement officers to review and restructure  the SBA and other federal procurement officers to review and restructure
proposed procurements to maximize opportunities for small business proposed procurements to maximize opportunities for small business
participation. participation.
Additional requirements are in place to maximize small business participation as prime Additional requirements are in place to maximize small business participation as prime
contractors, subcontractors, and suppliers. For example, prior to issuing a solicitation, federal contractors, subcontractors, and suppliers. For example, prior to issuing a solicitation, federal
contracting officers must do the following, among other requirements: contracting officers must do the following, among other requirements:
 divide proposed acquisitions of supplies and services (except construction) into  divide proposed acquisitions of supplies and services (except construction) into
reasonably small lots to permit offers on quantities less than the total reasonably small lots to permit offers on quantities less than the total
requirement; requirement;
 plan acquisitions such that, if practicable, more than one small business concern  plan acquisitions such that, if practicable, more than one small business concern
may perform the work, if the work exceeds the amount for which a surety may be may perform the work, if the work exceeds the amount for which a surety may be
guaranteed by the SBA against loss under 15 U.S.C. §694b [generally $6.5 guaranteed by the SBA against loss under 15 U.S.C. §694b [generally $6.5
million, or $10 million if the contracting officer certifies that the higher amount million, or $10 million if the contracting officer certifies that the higher amount
is necessary];9 is necessary];9
 encourage prime contractors to subcontract with small business concerns,  encourage prime contractors to subcontract with small business concerns,
primarily through the agency’s role in negotiating an acceptable small business primarily through the agency’s role in negotiating an acceptable small business
subcontracting plan with prime contractors on contracts anticipated to exceed subcontracting plan with prime contractors on contracts anticipated to exceed
$700,000 or $1.5 million for construction contracts;10 and $700,000 or $1.5 million for construction contracts;10 and
 under specified circumstances, provide a copy of the proposed acquisition  under specified circumstances, provide a copy of the proposed acquisition
package to an SBA procurement center representative (PCR) for his or her package to an SBA procurement center representative (PCR) for his or her
review, comment, and recommendation at least 30 days prior to the issuance of review, comment, and recommendation at least 30 days prior to the issuance of
the solicitation. If the contracting officer rejects the PCR’s recommendation, he the solicitation. If the contracting officer rejects the PCR’s recommendation, he
or she must document the basis for the rejection and notify the PCR, who may or she must document the basis for the rejection and notify the PCR, who may
appeal the rejection to the chief of the contracting office and, ultimately, to the appeal the rejection to the chief of the contracting office and, ultimately, to the
agency head.11 agency head.11

§637(m). For SDVOSBs, see P.L. 108-183, the Veterans Benefits Act of 2003 and 15 U.S.C§637(m). For SDVOSBs, see P.L. 108-183, the Veterans Benefits Act of 2003 and 15 U.S.C. §657f. §657f.
9 For additional information and analysis concerning the Small Business Administration’s (SBA’s) Surety Bond 9 For additional information and analysis concerning the Small Business Administration’s (SBA’s) Surety Bond
program, see CRS Report R42037, program, see CRS Report R42037, SBA Surety Bond Guarantee Program, by Robert Jay Dilger. , by Robert Jay Dilger.
10 Subcontracting plans are not required from small businesses, for personal services contracts, for contracts or contract 10 Subcontracting plans are not required from small businesses, for personal services contracts, for contracts or contract
modifications that will be performed entirely outside of the United States and its outlying areas, or for modifications modifications that will be performed entirely outside of the United States and its outlying areas, or for modifications
that were within the scope of the contract. “[A]ny contractor or subcontractor failing to comply in good faith with the that were within the scope of the contract. “[A]ny contractor or subcontractor failing to comply in good faith with the
requirements of the subcontracting plan is in material breach of its contract.” FAR §19.702(c). In addition, see FAR requirements of the subcontracting plan is in material breach of its contract.” FAR §19.702(c). In addition, see FAR
§19.702: §19.702:
Any contractor receiving a contract with a value greater than the simplified acquisition threshold Any contractor receiving a contract with a value greater than the simplified acquisition threshold
must agree in the contract that small business, veteran-owned small business, service-disabled must agree in the contract that small business, veteran-owned small business, service-disabled
veteran-owned small business, HUBZone small business, small disadvantaged business, and veteran-owned small business, HUBZone small business, small disadvantaged business, and
women-owned small business concerns will have the maximum practicable opportunity to women-owned small business concerns will have the maximum practicable opportunity to
participate in contract performance consistent with its efficient performance. participate in contract performance consistent with its efficient performance.
11 See FAR §19.202-1 for the specified conditions: 11 See FAR §19.202-1 for the specified conditions:
(i) The proposed acquisition is for supplies or services currently being provided by a small business (i) The proposed acquisition is for supplies or services currently being provided by a small business
and the proposed acquisition is of a quantity or estimated dollar value, the magnitude of which and the proposed acquisition is of a quantity or estimated dollar value, the magnitude of which
makes it unlikely that small businesses can compete for the prime contract; (ii) The proposed makes it unlikely that small businesses can compete for the prime contract; (ii) The proposed
acquisition is for construction and seeks to package or consolidate discrete construction projects acquisition is for construction and seeks to package or consolidate discrete construction projects
and the magnitude of this consolidation makes it unlikely that small businesses can compete for the and the magnitude of this consolidation makes it unlikely that small businesses can compete for the
prime contract; or (iii) The proposed acquisition is for a consolidated or bundled requirement. prime contract; or (iii) The proposed acquisition is for a consolidated or bundled requirement.
See FAR §19.505 for a description of the appeals process. See FAR §19.505 for a description of the appeals process.
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link to page 8 link to page 8 link to page 8 link to page 8 SBA Women-Owned Small Business Federal Contracting Program

This report focuses on the SBA’s WOSB Federal Contracting Program, authorized by H.R. 5654, This report focuses on the SBA’s WOSB Federal Contracting Program, authorized by H.R. 5654,
the Small Business Reauthorization Act of 2000, and incorporated by reference in P.L. 106-554, the Small Business Reauthorization Act of 2000, and incorporated by reference in P.L. 106-554,
the Consolidated Appropriations Act, 2001.12 the Consolidated Appropriations Act, 2001.12
The WOSB program is designed to help federal agencies achieve their statutory goal of awarding The WOSB program is designed to help federal agencies achieve their statutory goal of awarding
at least 5% of their federal contracting dollars to WOSBs (established by P.L. 103-355, the at least 5% of their federal contracting dollars to WOSBs (established by P.L. 103-355, the
Federal Acquisition Streamlining Act of 1994 (FASA)) by allowing federal contracting officers to Federal Acquisition Streamlining Act of 1994 (FASA)) by allowing federal contracting officers to
 set aside acquisitions exceeding the micro-purchase threshold (currently $10,000)  set aside acquisitions exceeding the micro-purchase threshold (currently $10,000)
for bidding by WOSBs (including economically disadvantaged WOSBs for bidding by WOSBs (including economically disadvantaged WOSBs
(EDWOSBs)) exclusively in industries in which WOSBs are substantially (EDWOSBs)) exclusively in industries in which WOSBs are substantially
underrepresented, and underrepresented, and
 set aside contracts for bidding by EDWOSBs exclusively in industries in which  set aside contracts for bidding by EDWOSBs exclusively in industries in which
WOSBs are underrepresented. WOSBs are underrepresented.
Congressional interest in the WOSB program has increased in recent years because the federal Congressional interest in the WOSB program has increased in recent years because the federal
government has met the 5% procurement goal for WOSBs only twice—in FY2015 and government has met the 5% procurement goal for WOSBs only twice—in FY2015 and
FY2019—since the goal was authorized in 1994, and implemented in FY1996 (FY2019—since the goal was authorized in 1994, and implemented in FY1996 (seesee Table 1). .
WOSB federal contract award data suggest that federal procurement officers are using the WOSB WOSB federal contract award data suggest that federal procurement officers are using the WOSB
program more often than in the past, but the amount of WOSB awarded contracts account for a program more often than in the past, but the amount of WOSB awarded contracts account for a
relatively small portion of the total amount of contracts awarded to WOSBs. Most of the federal relatively small portion of the total amount of contracts awarded to WOSBs. Most of the federal
contracts awarded to WOSBs are awarded in full and open competition with other firms or with contracts awarded to WOSBs are awarded in full and open competition with other firms or with
another small business preference, such as an 8(a) or HUBZone program preference. Relatively another small business preference, such as an 8(a) or HUBZone program preference. Relatively
few federal contracts are awarded through the WOSB program (few federal contracts are awarded through the WOSB program (seesee Table 1). .
In addition, the Government Accountability Office (GAO) and the SBA’s Office of Inspector In addition, the Government Accountability Office (GAO) and the SBA’s Office of Inspector
General (OIG) have noted deficiencies in the SBA’s implementation and oversight of the General (OIG) have noted deficiencies in the SBA’s implementation and oversight of the
program. For example, the WOSB program was authorized on December 21, 2000. The SBA took program. For example, the WOSB program was authorized on December 21, 2000. The SBA took
nearly 10 years to issue a final rule for the program (on October 7, 2010) and another four months nearly 10 years to issue a final rule for the program (on October 7, 2010) and another four months
before the program went into effect (on February 4, 2011).13 The SBA attributed the delay before the program went into effect (on February 4, 2011).13 The SBA attributed the delay
primarily to its difficulty in identifying an appropriate methodology to determine “the industries primarily to its difficulty in identifying an appropriate methodology to determine “the industries
in which WOSBs are underrepresented with respect to federal procurement contracting.”14 in which WOSBs are underrepresented with respect to federal procurement contracting.”14
P.L. 113-291, the Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act P.L. 113-291, the Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act
for Fiscal Year 2015 (NDAA 2015), enacted on December 19, 2014, prohibited small businesses for Fiscal Year 2015 (NDAA 2015), enacted on December 19, 2014, prohibited small businesses
from self-certifying WOSB eligibility to ensure that the program’s contracts are awarded only to from self-certifying WOSB eligibility to ensure that the program’s contracts are awarded only to
intended recipients. NDAA 2015 also required the SBA to implement its own WOSB certification intended recipients. NDAA 2015 also required the SBA to implement its own WOSB certification
process. The SBA issued an Advance Notice of Proposed Rulemaking in the process. The SBA issued an Advance Notice of Proposed Rulemaking in the Federal Register on on
December 18, 2015, to solicit public comments on drafting a proposed rule to meet these December 18, 2015, to solicit public comments on drafting a proposed rule to meet these
requirements. The proposed rule was not issued until May 14, 2019. Comments on the proposed requirements. The proposed rule was not issued until May 14, 2019. Comments on the proposed
rule were to be submitted by July 15, 2019. The final rule implementing the certification program rule were to be submitted by July 15, 2019. The final rule implementing the certification program
and removing the self-certification option was issued on May 11, 2020.15 The effective date for and removing the self-certification option was issued on May 11, 2020.15 The effective date for

12 Legislative language authorizing the WOSB federal contracting program was initially in H.R. 4897, the Equity in 12 Legislative language authorizing the WOSB federal contracting program was initially in H.R. 4897, the Equity in
Contracting for Women Act of 2000. Contracting for Women Act of 2000.
13 SBA, “Women-Owned Small Business Federal Contract Program,” 75 13 SBA, “Women-Owned Small Business Federal Contract Program,” 75 Federal Register 62258-62292, October 7, 62258-62292, October 7,
2010. 2010.
14 For a discussion of the various methodological approaches considered, see SBA, “Women-Owned Small Business 14 For a discussion of the various methodological approaches considered, see SBA, “Women-Owned Small Business
Federal Contract Program,” 75Federal Contract Program,” 75 Federal Register 62259-62292, October 7, 2010. 62259-62292, October 7, 2010.
15 SBA, “Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business 15 SBA, “Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business
Certification,” 85Certification,” 85 Federal Register 27650-27665, May 11, 2020. 27650-27665, May 11, 2020.
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the new WOSB certification process was October 15, 2020, nearly six years after these the new WOSB certification process was October 15, 2020, nearly six years after these
requirements were enacted on December 19, 2014.16 requirements were enacted on December 19, 2014.16
Table 1. Women-Owned Small Business (WOSB) Contract Awards, Amount and
Percentage of Small Business Eligible Contracts, FY1995-FY2019FY2020
($ in billions) ($ in billions)
WOSB
and
EDWOSB
% of Small% of Small WOSB Business and Eligible EDWOSB Contracts
Set-Aside
WOSB
EDWOSB
Business(including
and Sole
WOSB
Sole
EDWOSB
Sole
Fiscal
Eligibledouble
Source
Set-Aside
Source
Set-Aside
Source
Year
Amount
Contractscounting)
Awards
Awards
Awards
Awards
Awards
2020 $27.272 4.85% $1.259 $1.085 $0.107 $0.056 $0.011 2019 2019
$25.300 $25.300
5. 5.0419% %
$1.080 $1.080
$0.897 $0.897
$0.097 $0.097
$0.075 $0.075
$0.011 $0.011
2018 2018
$22.923 $22.923
4.75% 4.75%
$0.893 $0.893
$0.742 $0.742
$0.093 $0.093
$0.050 $0.050
$0.009 $0.009
2017 2017
$20.844 $20.844
4.71% 4.71%
$0.723 $0.723
$0.583 $0.583
$0.068 $0.068
$0.064 $0.064
$0.009 $0.009
2016 2016
$19.670 $19.670
4.79% 4.79%
$0.449 $0.449
$0.318 $0.318
$0.035 $0.035
$0.085 $0.085
$0.010 $0.010
2015 2015
$17.807 $17.807
5.05% 5.05%
$0.287 $0.287
$0.201 $0.201
— —
$0.086 $0.086
— —
2014 2014
$17.177 $17.177
4.68% 4.68%
$0.177 $0.177
$0.106 $0.106
— —
$0.071 $0.071
— —
2013 2013
$15.365 $15.365
4.32% 4.32%
$0.101 $0.101
$0.040 $0.040
— —
$0.061 $0.061
— —
2012 2012
$16.180 $16.180
4.00% 4.00%
$0.072 $0.072
$0.033 $0.033
— —
$0.039 $0.039
— —
2011 2011
$16.807 $16.807
3.98% 3.98%
$0.021 $0.021
$0.015 $0.015
— —
$0.006 $0.006
— —
2010 2010
$17.456 $17.456
4.04% 4.04%
— —
— —
— —
— —
— —
2009 2009
$14.419 $14.419
3.21% 3.21%
— —
— —
— —
— —
— —
2008 2008
$14.420 $14.420
3.21% 3.21%
— —
— —
— —
— —
— —
2007 2007
$12.926 $12.926
3.41% 3.41%
— —
— —
— —
— —
— —
2006 2006
$11.616 $11.616
3.41% 3.41%
— —
— —
— —
— —
— —
2005 2005
$10.187 $10.187
3.18% 3.18%
— —
— —
— —
— —
— —
2004 2004
$9.092 $9.092
3.03% 3.03%
— —
— —
— —
— —
— —
2003 2003
$8.300 $8.300
2.98% 2.98%
— —
— —
— —
— —
— —
2002 2002
$6.800 $6.800
2.50% 2.50%
— —
— —
— —
— —
— —
2001 2001
$5.500 $5.500
2.49% 2.49%
— —
— —
— —
— —
— —
2000 2000
$4.600 $4.600
2.88% 2.88%
— —
— —
— —
— —
— —
1999 1999
$4.510 $4.510
2.25% 2.25%
— —
— —
— —
— —
— —
1998 1998
$4.060 $4.060
2.03% 2.03%
— —
— —
— —
— —
— —
1997 1997
$3.590 $3.590
1.84% 1.84%
— —
— —
— —
— —
— —
1996 1996
$3.441 $3.441
1.74% 1.74%
— —
— —
— —
— —
— —
1995
$3.621
1.79%






16 SBA, “Women-Owned Small Business Federal Contracting program: Upcoming certification changes,” at 16 SBA, “Women-Owned Small Business Federal Contracting program: Upcoming certification changes,” at
https://www.sba.gov/federal-contracting/contracting-assistance-programs/women-owned-small-business-federal-https://www.sba.gov/federal-contracting/contracting-assistance-programs/women-owned-small-business-federal-
contracting-program. contracting-program.
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% of Small WOSB Business and Eligible EDWOSB Contracts Set-Aside WOSB EDWOSB (including and Sole WOSB Sole EDWOSB Sole Fiscal double Source Set-Aside Source Set-Aside Source Year Amount counting) Awards Awards Awards Awards Awards 1995 $3.621 1.79% — — — — — Sources: White House (Clinton),: White House (Clinton), The State of Small Business: A Report of the President, 1996, (Washington, DC: (Washington, DC:
GPO, 1997), p. 325 [FY1995], at https://hdl.handle.net/2027/mdp.39015087497429; White House (Clinton),GPO, 1997), p. 325 [FY1995], at https://hdl.handle.net/2027/mdp.39015087497429; White House (Clinton), The
State of Small Business: A Report of the President, 1997
(Washington, DC: GPO, 1998), p. 194 [FY1996], at (Washington, DC: GPO, 1998), p. 194 [FY1996], at
https://hdl.handle.net/2027/uva.x004466169; White House (Clinton),https://hdl.handle.net/2027/uva.x004466169; White House (Clinton), The State of Small Business: A Report of the
President, 1998
(Washington, DC: GPO, 1999), p. 250 [FY1997], at https://hdl.handle.net/2027/(Washington, DC: GPO, 1999), p. 250 [FY1997], at https://hdl.handle.net/2027/
uiug.30112048180589; White House (G.W. Bush), uiug.30112048180589; White House (G.W. Bush), The State of Small Business: A Report of the President, 1999-2000
(Washington, DC: GPO, 2001), p. 132 [FY1998, FY1999], at https://hdl.handle.net/2027/uva.x004572085; U.S. (Washington, DC: GPO, 2001), p. 132 [FY1998, FY1999], at https://hdl.handle.net/2027/uva.x004572085; U.S.
Congress, House Committee on Small Business, Subcommittee on Contracting and Technology, Congress, House Committee on Small Business, Subcommittee on Contracting and Technology, Subcommittee
Hearing on Federal Government Efforts in Contracting with Women-Owned Businesses
, hearing, 110th Cong., 1st sess., , hearing, 110th Cong., 1st sess.,
March 21, 2007, serial no. 110-9 (Washington, DC: GPO, 2007), pp. 4, 46 [FY2000]; U.S. Congress, House March 21, 2007, serial no. 110-9 (Washington, DC: GPO, 2007), pp. 4, 46 [FY2000]; U.S. Congress, House
Committee on Small Business, Subcommittee on Regulatory Reform and Oversight, Committee on Small Business, Subcommittee on Regulatory Reform and Oversight, SBA’s Procurement Assistance
Programs
, hearing, 109th Cong., 2nd sess., March 30, 2006, serial no. 109-45 (Washington, DC: GPO, 2006), p. 31 , hearing, 109th Cong., 2nd sess., March 30, 2006, serial no. 109-45 (Washington, DC: GPO, 2006), p. 31
[FY2001-FY2004]; U.S. General Services Administration (GSA), “[FY2001-FY2004]; U.S. General Services Administration (GSA), “Federal Procurement Data System—Next
Generation,”Sam.Gov Data Bank, Static: Small Business Goaling Report [FY2005- Small Business Goaling Report [FY2005-FY2019FY2020], at https://sam.gov/reports/awards/static;], at https://www.fpds.gov/fpdsng_cms/index.php/
en/reports.html; and GSA, “Federal Procurement Data System—Next Generation,” accessed on August 14, 2020 GSA, “Federal Procurement Data System—Next Generation,” accessed on August 14, 2020
(WOSB and economically disadvantaged WOSB (EDWOSB) set-aside and sole source awards, FY2011-FY2019)(WOSB and economically disadvantaged WOSB (EDWOSB) set-aside and sole source awards, FY2011-FY2019); and data generated using GSA, “Sam.Gov Data Bank, Ad Hoc report,” August 2, 2021 [2020], at https://sam.gov/reports/awards/adhoc. .
Notes: The small business eligible baseline excludes certain contracts that the U.S. Small Business : The small business eligible baseline excludes certain contracts that the U.S. Small Business
Administration Administration (SBA) has determined do not realistically reflect the potential for small business participation in federal has determined do not realistically reflect the potential for small business participation in federal
procurement (such as those awarded to mandatory and directed sources), contracts funded predominately from procurement (such as those awarded to mandatory and directed sources), contracts funded predominately from
agency-generated sources (i.e., agency-generated sources (i.e., non-appropriatednonappropriated funds), contracts not covered by the Federal Acquisition funds), contracts not covered by the Federal Acquisition
Regulations System, acquisitions on behalf of foreign governments, and contracts not reported in the GSA’s Regulations System, acquisitions on behalf of foreign governments, and contracts not reported in the GSA’s
Federal Procurement Data System—Next Generation (such as government procurement card purchases and Federal Procurement Data System—Next Generation (such as government procurement card purchases and
contracts valued less than $10,000). About 15% to 18% of all federal contracts are excluded in any given fiscal contracts valued less than $10,000). About 15% to 18% of all federal contracts are excluded in any given fiscal
yearyear. In FY2019 and FY2020, in accordance with federal law, the SBA provided double credit, for scorecard purposes only, for prime contracts awarded in disaster areas that are awarded as a local set aside and a small business or other socioeconomic set aside when the vendor state is the same as the place of performance (see 15 U.S.C. §644(f)) and for prime contracts awarded to businesses in Puerto Rico and covered territories dated on or after August 13, 2018, and only for awards that do not already qualify for double credit under 15 U.S.C. §644(f) (see 15 U.S.C. §644(x)(1)). Without double credits, women-owned small businesses received 5.04% of small business eligible contracts in FY2019 and 4.71% in FY2020. .
The WOSB Program’s Origins
The following sections provide an overview of the history of small business contracting The following sections provide an overview of the history of small business contracting
preferences, focusing on executive, legislative, and judicial actions that led to the creation of the preferences, focusing on executive, legislative, and judicial actions that led to the creation of the
WOSB program and influenced its structure. WOSB program and influenced its structure.
Federal Agency Small Business Procurement Goals and Executive
Order 12138: A National Program for Women’s Business Enterprise
Since 1978, federal agency heads have been required to establish federal procurement goals, in Since 1978, federal agency heads have been required to establish federal procurement goals, in
consultation with the SBA, “that realistically reflect the potential of small business concerns and consultation with the SBA, “that realistically reflect the potential of small business concerns and
small business concerns owned and controlled by socially and economically disadvantaged small business concerns owned and controlled by socially and economically disadvantaged
individuals” to participate in federal procurement. These reports are submitted to Congress and individuals” to participate in federal procurement. These reports are submitted to Congress and
Congressional Research Service 6 SBA Women-Owned Small Business Federal Contracting Program are presently made available to the public on the General Services Administration’s (GSA’s) are presently made available to the public on the General Services Administration’s (GSA’s)
website. Initially, WOSB goals were not included.17 website. Initially, WOSB goals were not included.17
On May 18, 1979, President Jimmy Carter issued Executive Order 12138, which established a On May 18, 1979, President Jimmy Carter issued Executive Order 12138, which established a
national policy to promote women-owned business enterprises.18 Among other provisions, the national policy to promote women-owned business enterprises.18 Among other provisions, the

17 P.L. 95-507, a bill to amend the Small Business Act and the Small Business Investment Act of 1958; and 15 U.S.C.
§644(g)(2). Also, see P.L. 112-239, the National Defense Authorization Act for Fiscal Year 2013; SBA, “Small
Business Procurement Scorecard Overview,” at https://www.sba.gov/document/support-small-business-procurement-
scorecard-overview; and General Services Administration (GSA), “Federal Procurement Data System—Next
Generation: Small Business Goaling Reports (FY2005-2018),” at https://www.fpds.gov/fpdsng_cms/index.php/en/
reports.html.
18 Executive Order (E.O.) 12138, “Creating a National Women’s Business Enterprise Policy and prescribing
arrangements for developing, coordinating and implementing a national program for women’s business enterprise,”
May 18, 1979, at https://www.archives.gov/federal-register/codification/executive-order/12138.html (hereinafter cited
as E.O. 12138, 1979).
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executive order required federal agencies “to take appropriate affirmative action in support of executive order required federal agencies “to take appropriate affirmative action in support of
women’s business enterprise,” including promoting procurement opportunities and providing women’s business enterprise,” including promoting procurement opportunities and providing
financial assistance and business-related management and training assistance.19 financial assistance and business-related management and training assistance.19
Under authority provided by Executive Order 12138, the SBA added WOSB procurement goals Under authority provided by Executive Order 12138, the SBA added WOSB procurement goals
to the list of small business contracting goals it negotiated with federal agencies. At that time, to the list of small business contracting goals it negotiated with federal agencies. At that time,
WOSBs received about 0.2% of all federal contracts.20 By 1988, this percentage had grown, but WOSBs received about 0.2% of all federal contracts.20 By 1988, this percentage had grown, but
to only 1% of all federal contracts.21 to only 1% of all federal contracts.21
WOSB advocates argued that additional action was needed to help WOSBs win federal contracts WOSB advocates argued that additional action was needed to help WOSBs win federal contracts
because women-owned businesses are subject to “age-old prejudice, discrimination, and because women-owned businesses are subject to “age-old prejudice, discrimination, and
exploitation,” the “promotion of women’s business enterprise is simply not a high priority” for exploitation,” the “promotion of women’s business enterprise is simply not a high priority” for
federal agencies, and federal “agency efforts in support of women’s business enterprise have been federal agencies, and federal “agency efforts in support of women’s business enterprise have been
weak and have produced little, if any measurable results.”22 Their efforts led to P.L. 100-533, the weak and have produced little, if any measurable results.”22 Their efforts led to P.L. 100-533, the
Women’s Business Ownership Act of 1988. Women’s Business Ownership Act of 1988.
P.L. 100-533 provided the SBA statutory authorization to establish WOSB annual procurement P.L. 100-533 provided the SBA statutory authorization to establish WOSB annual procurement
goals with federal agencies. The act also extended the goaling requirement to include goals with federal agencies. The act also extended the goaling requirement to include
subcontracts, as well as prime contracts, and added WOSBs to the list of small business concerns subcontracts, as well as prime contracts, and added WOSBs to the list of small business concerns
to be identified in required small business subcontracting plans (at that time, small business to be identified in required small business subcontracting plans (at that time, small business
subcontracting plans were required for prime contracts exceeding $500,000, or $1 million for the subcontracting plans were required for prime contracts exceeding $500,000, or $1 million for the
construction of any public facility).23 construction of any public facility).23
Government-Wide Small Business Procurement Goals
In a related development, P.L. 100-656, the Business Opportunity Development Reform Act of
1988, authorized the President to annually establish government-wide minimum procurement
goals for small businesses and small businesses owned and controlled by socially and
economically disadvantaged individuals (SDBs). Congress required the government-wide
minimum goal for small businesses to be “not less than 20% [increased to 23% in 1997] of the

17 P.L. 95-507, a bill to amend the Small Business Act and the Small Business Investment Act of 1958; and 15 U.S.C. §644(g)(2). Also, see P.L. 112-239, the National Defense Authorization Act for Fiscal Year 2013; SBA, “Small Business Procurement Scorecard Overview,” at https://www.sba.gov/document/support-small-business-procurement-scorecard-overview; and General Services Administration (GSA), “Federal Procurement Data System—Next Generation: Small Business Goaling Reports (FY2005-2018),” at https://www.fpds.gov/fpdsng_cms/index.php/en/reports.html. 18 Executive Order (E.O.) 12138, “Creating a National Women’s Business Enterprise Policy and prescribing arrangements for developing, coordinating and implementing a national program for women’s business enterprise,” May 18, 1979, at https://www.archives.gov/federal-register/codification/executive-order/12138.html (hereinafter cited as E.O. 12138, 1979). 19 E.O. 12138, 1979. President Clinton issued a memorandum on October 13, 1994, reaffirming the executive branch’s 19 E.O. 12138, 1979. President Clinton issued a memorandum on October 13, 1994, reaffirming the executive branch’s
commitment to providing small, small disadvantaged, and WOSBs the maximum practicable opportunity to participate commitment to providing small, small disadvantaged, and WOSBs the maximum practicable opportunity to participate
in federal contracting. President Clinton also issued E.O. 13157, “Increasing Opportunities for Women-Owned Small in federal contracting. President Clinton also issued E.O. 13157, “Increasing Opportunities for Women-Owned Small
Businesses,” on May 23, 2000, to reaffirm the executive branch’s commitment to meet or exceed the 5% procurement Businesses,” on May 23, 2000, to reaffirm the executive branch’s commitment to meet or exceed the 5% procurement
goal for WOSBs. See Executive Office of the President, “Continued Commitment to Small, Small Disadvantaged, and goal for WOSBs. See Executive Office of the President, “Continued Commitment to Small, Small Disadvantaged, and
Small Women-Owned Businesses in Federal Procurement,” 59 Small Women-Owned Businesses in Federal Procurement,” 59 Federal Register 52397, October 17, 1994; and E.O. 52397, October 17, 1994; and E.O.
13157, “Increasing Opportunities for Women-Owned Small Businesses,” 6513157, “Increasing Opportunities for Women-Owned Small Businesses,” 65 Federal Register 34035-34037, May 25, 34035-34037, May 25,
2000. 2000.
20 U.S. Government Accountability Office (GAO), 20 U.S. Government Accountability Office (GAO), Federal Procurement: Trends and Challenges in Contracting with
Women-Owned Small Businesses
, GAO-01-346, February 16, 2001, p. 8, at https://www.gao.gov/products/GAO-01-, GAO-01-346, February 16, 2001, p. 8, at https://www.gao.gov/products/GAO-01-
346 (hereinafter cited as GAO-01-346, 346 (hereinafter cited as GAO-01-346, Federal Procurement: Trends and Challenges in Contracting with WOSBs). ).
21 GAO-01-346, 21 GAO-01-346, Federal Procurement: Trends and Challenges in Contracting with WOSBs. .
22 U.S. Congress, House Committee on Small Business, 22 U.S. Congress, House Committee on Small Business, Women’s Business Ownership Act of 1988, report to , report to
accompany H.R. 5050, 100th Cong., 2nd sess., September 22, 1988, H.Rept. 100-955 (Washington: GPO, 1988), pp. 6-9 accompany H.R. 5050, 100th Cong., 2nd sess., September 22, 1988, H.Rept. 100-955 (Washington: GPO, 1988), pp. 6-9
(hereinafter U.S. Congress, House Committee on Small Business, (hereinafter U.S. Congress, House Committee on Small Business, Women’s Business Ownership Act of 1988). ).
23 U.S. Congress, House Committee on Small Business, 23 U.S. Congress, House Committee on Small Business, Women’s Business Ownership Act of 1988, p. 8. , p. 8.
Presently, contractors that are not considered small must submit an acceptable small business subcontracting plan on
contracts anticipated to exceed $700,000, or $1.5 million for construction contracts. See 15 U.S.C. §633(h)(1). For
additional information on subcontracting plan requirements, see FAR §19.702(a)(1); and 15 U.S.C. §637(d)(3).
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link to page 12 link to page 12 SBA Women-Owned Small Business Federal Contracting Program

Congressional Research Service 7 link to page 12 SBA Women-Owned Small Business Federal Contracting Program Government-Wide Small Business Procurement Goals In a related development, P.L. 100-656, the Business Opportunity Development Reform Act of 1988, authorized the President to annually establish government-wide minimum procurement goals for small businesses and small businesses owned and controlled by socially and economically disadvantaged individuals (SDBs). Congress required the government-wide minimum goal for small businesses to be “not less than 20% [increased to 23% in 1997] of the total value of all prime contract awards for each fiscal year” and “not less than 5% of the total total value of all prime contract awards for each fiscal year” and “not less than 5% of the total
value of all prime contract and subcontract awards for each fiscal year” for SDBs.24 value of all prime contract and subcontract awards for each fiscal year” for SDBs.24
Advocates for a WOSB government-wide procurement goal argued that women owned Advocates for a WOSB government-wide procurement goal argued that women owned
approximately one third of the nation’s businesses but received “a mere 1.3% of federal approximately one third of the nation’s businesses but received “a mere 1.3% of federal
contracting dollars ... in FY1990.”25 Their efforts led to P.L. 103-355, FASA. contracting dollars ... in FY1990.”25 Their efforts led to P.L. 103-355, FASA.
FASA created a 5% procurement goal for WOSBs each fiscal year. The 5% goal was FASA created a 5% procurement goal for WOSBs each fiscal year. The 5% goal was
implemented by regulations effective in FY1996.26 implemented by regulations effective in FY1996.26
The conferees indicated in FASA’s conference agreement that they did “not intend to create a The conferees indicated in FASA’s conference agreement that they did “not intend to create a
new set aside or program of restricted competition for a specific designated group, but rather to new set aside or program of restricted competition for a specific designated group, but rather to
establish a target that will result in greater opportunities for women to compete for federal establish a target that will result in greater opportunities for women to compete for federal
contracts.”27 The conferees added that “given the slow progress to date in reaching the current contracts.”27 The conferees added that “given the slow progress to date in reaching the current
award levels, the conferees recognize that this goal may take some time to be reached.”28 award levels, the conferees recognize that this goal may take some time to be reached.”28
Subsequently, 3% procurement goals were created for HUBZone small businesses (P.L. 105-135, Subsequently, 3% procurement goals were created for HUBZone small businesses (P.L. 105-135,
the HUBZone Act of 1997; Title VI of the Small Business Reauthorization Act of 1997) and the HUBZone Act of 1997; Title VI of the Small Business Reauthorization Act of 1997) and
SDVOSBs (P.L. 106-50, the Veterans Entrepreneurship and Small Business Development Act of SDVOSBs (P.L. 106-50, the Veterans Entrepreneurship and Small Business Development Act of
1999).29 1999).29
Figure 1 shows the percentage of small business-eligible federal contracts awarded to small shows the percentage of small business-eligible federal contracts awarded to small
businesses, SDBs, WOSBs, SDVOSBs, and HUBZone small businesses from FY2005 through businesses, SDBs, WOSBs, SDVOSBs, and HUBZone small businesses from FY2005 through
FY2019FY2020. As detailed in the figure’s notes, the small business-eligible baseline excludes certain . As detailed in the figure’s notes, the small business-eligible baseline excludes certain
contracts that the SBA has determined do not realistically reflect the potential for small business contracts that the SBA has determined do not realistically reflect the potential for small business
participation in federal procurement. About 15% to 18% of all federal contracts are excluded in participation in federal procurement. About 15% to 18% of all federal contracts are excluded in
any given fiscal year. any given fiscal year.
The federal government has had difficulty meeting the WOSB and HUBZone small business The federal government has had difficulty meeting the WOSB and HUBZone small business
procurement goals. procurement goals. As mentioned in Figure 1s notes, theThe 5% procurement goal for WOSBs was 5% procurement goal for WOSBs was
achieved in only 2 of the achieved in only 2 of the 15 fiscal years (FY2015 and FY2019) reported in the figure. The 3%
procurement goal for HUBZone small businesses was not achieved in any of the 15 fiscal years.
In contrast, the 23% procurement goal for all types of small businesses was achieved in 9 of the
15 fiscal years reported in the figure (FY2005, FY2008, and FY2013-FY2019), including the past
7 fiscal years. The 5% procurement goal for SDBs was achieved in each of the 15 fiscal years.
The 3% procurement goal for SDVOSBs was achieved in 8 of the 15 fiscal years (FY2012-
FY2019), including the last 8 fiscal years.

16 fiscal Presently, contractors that are not considered small must submit an acceptable small business subcontracting plan on contracts anticipated to exceed $700,000, or $1.5 million for construction contracts. See 15 U.S.C. §633(h)(1). For additional information on subcontracting plan requirements, see FAR §19.702(a)(1); and 15 U.S.C. §637(d)(3). 24 P.L. 100-656, the Business Opportunity Development Reform Act of 1988, 15 U.S.C. §644(g)(1). The government-24 P.L. 100-656, the Business Opportunity Development Reform Act of 1988, 15 U.S.C. §644(g)(1). The government-
wide procurement goal for small businesses was increased from 20% to 23% by P.L. 105-135, the Small Business wide procurement goal for small businesses was increased from 20% to 23% by P.L. 105-135, the Small Business
Reauthorization Act of 1997. Reauthorization Act of 1997.
25 Rep. John J. LaFalce, “Remarks related to the Women’s Business Procurement Assistance Act of 1993,” extension of 25 Rep. John J. LaFalce, “Remarks related to the Women’s Business Procurement Assistance Act of 1993,” extension of
remarks in the House, remarks in the House, Congressional Record, vol. 139, part 81 (June 9, 1993), p. E1439. , vol. 139, part 81 (June 9, 1993), p. E1439.
26 GAO-01-346, 26 GAO-01-346, Federal Procurement: Trends and Challenges in Contracting with WOSBs, p. 8. , p. 8.
27 U.S. Congress, Committee of Conference, 27 U.S. Congress, Committee of Conference, Federal Acquisition Streamlining Act of 1994, conference report to , conference report to
accompany S. 1587, 103rd Cong., 2nd sess., August 21, 1994, H.Rept. 103-712 (Washington, DC: GPO, 1994), p. 224 accompany S. 1587, 103rd Cong., 2nd sess., August 21, 1994, H.Rept. 103-712 (Washington, DC: GPO, 1994), p. 224
(hereinafter cited as Committee of Conference, Federal Acquisition Streamlining Act of 1994). (hereinafter cited as Committee of Conference, Federal Acquisition Streamlining Act of 1994).
28 Committee of Conference, Federal Acquisition Streamlining Act of 1994, p. 224. 28 Committee of Conference, Federal Acquisition Streamlining Act of 1994, p. 224.
29 This goal was phased in, with an initial goal of 1% (effective in 1999) that rose by half a percentage point each year 29 This goal was phased in, with an initial goal of 1% (effective in 1999) that rose by half a percentage point each year
to its final level in 2003. The goal was later modified to include subcontract awards (P.L. 112-239, the National to its final level in 2003. The goal was later modified to include subcontract awards (P.L. 112-239, the National
Defense Authorization Act for Fiscal Year 2013). Defense Authorization Act for Fiscal Year 2013).
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link to page 8
SBA Women-Owned Small Business Federal Contracting Program years (FY2015 and FY2019) reported in the figure. The 3% procurement goal for HUBZone small businesses was not achieved in any of the 16 fiscal years. In contrast, the 23% procurement goal for all types of small businesses was achieved in 9 of the 16 fiscal years reported in the figure (FY2005 and FY2013-FY2020), including the past 8 fiscal years. The 5% procurement goal for SDBs was achieved in each of the 16 fiscal years. The 3% procurement goal for SDVOSBs was achieved in 9 of the 16 fiscal years (FY2012-FY2020), including the last 9 fiscal years. SBA Women-Owned Small Business Federal Contracting Program

Figure 1. Small Business Contracting, Performance, by Type of Small Business,
FY2005-FY2019FY2020
(percentage of small business eligible federal contracts) (percentage of small business eligible federal contracts)

Source: : U.S. General Services Administration (GSA), U.S. General Services Administration (GSA), Federal Procurement Data System—Next Generation,
“Sam.Gov Data Bank, Static: Small Business Goaling Report [FY2005-Small Business Goaling Report [FY2005-FY2019], at https://www.fpds.gov/fpdsng_cms/index.php/en/reports.htmlFY2020], at https://sam.gov/reports/awards/static; and U.S. Small Business Administration, “Government-Wide Performance: FY2020 Small Business Procurement Scorecard,” data as of April 15, 2021, at https://www.sba.gov/document/support-small-business-procurement-scorecard-overview. .
Notes: The small business eligible baseline excludes certain contracts that the Small Business Administration has The small business eligible baseline excludes certain contracts that the Small Business Administration has
determined do not realistically reflect the potential for small business participation in federal procurement (such determined do not realistically reflect the potential for small business participation in federal procurement (such
as those awarded to mandatory and directed sources), contracts funded predominately from agency-generated as those awarded to mandatory and directed sources), contracts funded predominately from agency-generated
sources (i.e., sources (i.e., non-appropriatednonappropriated funds), contracts not covered by the Federal Acquisition Regulations System, funds), contracts not covered by the Federal Acquisition Regulations System,
acquisitions on behalf of foreign governments, and contracts not reported in the GSA’s Federal Procurement acquisitions on behalf of foreign governments, and contracts not reported in the GSA’s Federal Procurement
Data System—Next Generation (such as government procurement card purchases and contracts valued less Data System—Next Generation (such as government procurement card purchases and contracts valued less
than $10,000). About 15% to 18% of all federal contracts are excluded in any given fiscal year. than $10,000). About 15% to 18% of all federal contracts are excluded in any given fiscal year.
The 23% procurement goal for small businesses was achieved in 9 of the 15 fiscal years reported in the table
(FY2005, FY2008, and FY2013-FY2019). The 5% procurement goal for small disadvantaged businesses was
achieved in each of the 15 fiscal years. The 5% procurement goal for women-owned small businesses was
achieved in 2 of the 15 fiscal years (FY2015 and FY2019). The 3% procurement goal for service-disabled veteran-
owned small businesses (SDVOSBs) was achieved in 8 of the 15 fiscal years (FY2012-FY2019). The 3%
procurement goal for HUBZone small businesses was not achieved in any of the 15 fiscal years. Congressional Research Service 9 link to page 8 SBA Women-Owned Small Business Federal Contracting Program
WOSB Set-Asides
As shown iAs shown in Table 1, FASA conferees’ prediction that it may take some time to reach the 5% goal FASA conferees’ prediction that it may take some time to reach the 5% goal
was confirmed. The amount and percentage of federal contracts awarded to WOSBs increased was confirmed. The amount and percentage of federal contracts awarded to WOSBs increased
slowly following the establishment of the 5% goal (implemented in FY1996). slowly following the establishment of the 5% goal (implemented in FY1996).
Frustrated by the relatively slow progress toward meeting the 5% goal, WOSB advocates began Frustrated by the relatively slow progress toward meeting the 5% goal, WOSB advocates began
to lobby for additional actions, including the establishment of a federal contracting set-aside to lobby for additional actions, including the establishment of a federal contracting set-aside
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program for WOSBs. As mentioned, a set-aside is a commonly used term to refer to a contract program for WOSBs. As mentioned, a set-aside is a commonly used term to refer to a contract
competition in which only small businesses, or specific types of small businesses, may compete. competition in which only small businesses, or specific types of small businesses, may compete.
WOSB advocates noted that other small businesses were provided contracting preferences. For WOSB advocates noted that other small businesses were provided contracting preferences. For
example, at that time, SDBs were eligible for contract set-asides and a price evaluation example, at that time, SDBs were eligible for contract set-asides and a price evaluation
adjustment of up to 10% in full and open competition in specified federal agencies, including the adjustment of up to 10% in full and open competition in specified federal agencies, including the
Department of Defense (DOD); participants in the SBA’s 8(a) program were (and still are) Department of Defense (DOD); participants in the SBA’s 8(a) program were (and still are)
eligible for both contract set-asides and sole source awards; and HUBZone small businesses were eligible for both contract set-asides and sole source awards; and HUBZone small businesses were
(and still are) eligible for contract set-asides, sole source awards, and a price evaluation (and still are) eligible for contract set-asides, sole source awards, and a price evaluation
adjustment of up to 10% in full and open competition above the simplified acquisition adjustment of up to 10% in full and open competition above the simplified acquisition
threshold.30 threshold.30
As a first step toward the enactment of a WOSB set-aside contracting program, P.L. 106-165, the As a first step toward the enactment of a WOSB set-aside contracting program, P.L. 106-165, the
Women’s Business Centers Sustainability Act of 1999, required GAO to review the federal Women’s Business Centers Sustainability Act of 1999, required GAO to review the federal
government’s efforts to meet the 5% goal for WOSBs and to identify any measures that could government’s efforts to meet the 5% goal for WOSBs and to identify any measures that could
improve the federal government’s performance in increasing WOSB contracting opportunities. improve the federal government’s performance in increasing WOSB contracting opportunities.
GAO issued its report on February 16, 2001: GAO issued its report on February 16, 2001:
Among the government contracting officials with whom we spoke, there was general Among the government contracting officials with whom we spoke, there was general
agreement on several suggestions for improving the environment for contracting with agreement on several suggestions for improving the environment for contracting with
WOSBs and increasing federal contracting with WOSBs. They suggested creating a WOSBs and increasing federal contracting with WOSBs. They suggested creating a
contract program targeting WOSBs, focusing and coordinating federal agencies’ WOSB contract program targeting WOSBs, focusing and coordinating federal agencies’ WOSB
outreach activities, promoting contracting with WOSBs through agency incentive and outreach activities, promoting contracting with WOSBs through agency incentive and
recognition programs, including WOSBs in agencyrecognition programs, including WOSBs in agency mentor-protégé programs, providing mentor-protégé programs, providing
more information to WOSBs about participation in teaming arrangements, and providing more information to WOSBs about participation in teaming arrangements, and providing
expanded contract financing.31 expanded contract financing.31
By the time the GAO report was published, legislation had been enacted (H.R. 5654, the Small
Business Reauthorization Act of 2000, incorporated by reference in P.L. 106-554, the
Consolidated Appropriations Act, 2001) to authorize the WOSB program. As mentioned, the
WOSB program provides greater access to federal contracting opportunities for WOSBs by
providing federal contracting officers authority to set aside contracts for WOSBs (including
EDWOSBs) exclusively in industries in which WOSBs are substantially underrepresented, and to

30 Several statutes at that time contained provisions to encourage contracting with SDBs, including P.L. 99-591 30 Several statutes at that time contained provisions to encourage contracting with SDBs, including P.L. 99-591
(originally), Making continuing appropriations for the fiscal year 1987, and for other purposes (Title X, the Defense (originally), Making continuing appropriations for the fiscal year 1987, and for other purposes (Title X, the Defense
Acquisition Improvement Act of 1986); P.L. 99-661, the National Defense Authorization Act for Fiscal Year 1987; Acquisition Improvement Act of 1986); P.L. 99-661, the National Defense Authorization Act for Fiscal Year 1987;
P.L. 106-398, Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001; and P.L. 103-355, FASA. P.L. 106-398, Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001; and P.L. 103-355, FASA.
Between 1987 and 1995, SDBs were eligible to receive a 10% price evaluation preference in competitive Department Between 1987 and 1995, SDBs were eligible to receive a 10% price evaluation preference in competitive Department
of Defense (DOD) acquisitions and could compete for contracts set aside for SDBs for certain DOD acquisitions where of Defense (DOD) acquisitions and could compete for contracts set aside for SDBs for certain DOD acquisitions where
agency officials believed there was a reasonable expectation that offers would be received from at least two responsible agency officials believed there was a reasonable expectation that offers would be received from at least two responsible
SDBs. FASA extended the authority to implement these benefits to all federal agencies, but in 1995, the Supreme Court SDBs. FASA extended the authority to implement these benefits to all federal agencies, but in 1995, the Supreme Court
ruled in Adarand Constructors, Inc.v. Pena (1995) “that all racial classifications, whether imposed by federal, state, or ruled in Adarand Constructors, Inc.v. Pena (1995) “that all racial classifications, whether imposed by federal, state, or
local authorities, must pass strict scrutiny review. In other words, they ‘must serve a compelling government interest, local authorities, must pass strict scrutiny review. In other words, they ‘must serve a compelling government interest,
and must be narrowly tailored to further that interest.’” As a result of the Adarand decision, the federal government and must be narrowly tailored to further that interest.’” As a result of the Adarand decision, the federal government
reexamined how it implemented “affirmative action” programs, including certain procurement preference programs. In reexamined how it implemented “affirmative action” programs, including certain procurement preference programs. In
light of the Adarand decision, regulations to implement FASA’s provision to expand SDB program preferences to other light of the Adarand decision, regulations to implement FASA’s provision to expand SDB program preferences to other
federal agencies were delayed. Statutory authority for SDB price evaluation adjustments expired on December 9, 2004, federal agencies were delayed. Statutory authority for SDB price evaluation adjustments expired on December 9, 2004,
for most federal procuring agencies, and at the end of 2009 for DOD, the National Aeronautics and Space for most federal procuring agencies, and at the end of 2009 for DOD, the National Aeronautics and Space
Administration, and the Coast Guard. See Adarand Constructors, Inc., v. Pena, Oyez, at https://www.oyez.org/cases/Administration, and the Coast Guard. See Adarand Constructors, Inc., v. Pena, Oyez, at https://www.oyez.org/cases/
1994/93-1841; GAO, 1994/93-1841; GAO, Small Business: Status of Small Disadvantaged Business Certifications, GAO-01-273, January , GAO-01-273, January
19, 2001, pp. 3-6, at https://www.gao.gov/new.items/d01273.pdf; and SBA, “Small Disadvantaged Program,” 7319, 2001, pp. 3-6, at https://www.gao.gov/new.items/d01273.pdf; and SBA, “Small Disadvantaged Program,” 73
Federal Register
57490-57495, October 3, 2008. 57490-57495, October 3, 2008.
31 GAO-01-346, 31 GAO-01-346, Federal Procurement: Trends and Challenges in Contracting with WOSBs, p. 31. , p. 31.
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By the time the GAO report was published, legislation had been enacted (H.R. 5654, the Small Business Reauthorization Act of 2000, incorporated by reference in P.L. 106-554, the Consolidated Appropriations Act, 2001) to authorize the WOSB program. As mentioned, the WOSB program provides greater access to federal contracting opportunities for WOSBs by providing federal contracting officers authority to set aside contracts for WOSBs (including EDWOSBs) exclusively in industries in which WOSBs are substantially underrepresented, and to set aside contracts for EDWOSBs exclusively in industries in which WOSBs are set aside contracts for EDWOSBs exclusively in industries in which WOSBs are
underrepresented. underrepresented.
A Targeted Approach to Avoid Legal Challenges
Congressional efforts to promote WOSB set-asides were complicated by Supreme Court Congressional efforts to promote WOSB set-asides were complicated by Supreme Court
decisions on legal challenges of contracting preferences for minority contractors, including decisions on legal challenges of contracting preferences for minority contractors, including City
of Richmond v. J.A. Croson Co
. (1989) (finding unconstitutional a municipal ordinance that . (1989) (finding unconstitutional a municipal ordinance that
required the city’s prime contractors to award at least 30% of the value of each contract to required the city’s prime contractors to award at least 30% of the value of each contract to
minority subcontractors) and minority subcontractors) and Adarand Constructors, Inc. v. Pena (1995) (finding that all racial (1995) (finding that all racial
classifications, whether imposed by federal, state, or local authorities, must pass strict scrutiny classifications, whether imposed by federal, state, or local authorities, must pass strict scrutiny
review). review).
The The Adarand Constructors, Inc. v. Pena case involved a challenge to federal subcontracting case involved a challenge to federal subcontracting
preferences for SDBs. The plaintiff claimed that contracting preferences based on race violate the preferences for SDBs. The plaintiff claimed that contracting preferences based on race violate the
equal protection component of the Fifth Amendment’s Due Process Clause. The Supreme Court equal protection component of the Fifth Amendment’s Due Process Clause. The Supreme Court
ruled that all racial classifications, whether imposed by federal, state, or local authorities, must ruled that all racial classifications, whether imposed by federal, state, or local authorities, must
pass strict scrutiny review (i.e., they must serve a compelling government interest and must be pass strict scrutiny review (i.e., they must serve a compelling government interest and must be
narrowly tailored to further that interest). Following the narrowly tailored to further that interest). Following the Adarand decision, the federal decision, the federal
government reexamined how it implemented “affirmative action” programs, including certain government reexamined how it implemented “affirmative action” programs, including certain
procurement preference programs. procurement preference programs.
When developing the WOSB set-aside program, its advocates were aware that the WOSB When developing the WOSB set-aside program, its advocates were aware that the WOSB
program would be subject to a heightened standard of judicial review given the Supreme Court’s program would be subject to a heightened standard of judicial review given the Supreme Court’s
ruling that all racial classifications must serve a compelling government interest and be narrowly ruling that all racial classifications must serve a compelling government interest and be narrowly
tailored. In the House report accompanying H.R. 4897, the Equity in Contracting for Women Act tailored. In the House report accompanying H.R. 4897, the Equity in Contracting for Women Act
of 2000 (which was incorporated into H.R. 5654, the Small Business Reauthorization Act of of 2000 (which was incorporated into H.R. 5654, the Small Business Reauthorization Act of
2000), advocates argued that a set aside program was needed (compelling interest) because of the 2000), advocates argued that a set aside program was needed (compelling interest) because of the
slow progress in meeting the 5% procurement goal for WOSBs. The report noted that “the drive slow progress in meeting the 5% procurement goal for WOSBs. The report noted that “the drive
for efficiency in procurement often places Congressionally-mandated contracting goals for small for efficiency in procurement often places Congressionally-mandated contracting goals for small
businesses in general, and women-owned small businesses in particular, in jeopardy.”32 The report businesses in general, and women-owned small businesses in particular, in jeopardy.”32 The report
also noted that also noted that contract bundling (the consolidation of smaller contract requirements into larger (the consolidation of smaller contract requirements into larger
contracts) and the increased use of the Federal Supply Schedules increase “the efficiency of contracts) and the increased use of the Federal Supply Schedules increase “the efficiency of
government procurements ... [but] also may perpetuate the use of well-known firms that are not government procurements ... [but] also may perpetuate the use of well-known firms that are not
women-owned businesses.”33 As a result, women-owned businesses.”33 As a result,
the Committee believes that the goals expressed in FASA and reaffirmed in the Executive the Committee believes that the goals expressed in FASA and reaffirmed in the Executive
Order [Executive Order 13,157, issued on May 23, 2000 by President Clinton, reaffirming Order [Executive Order 13,157, issued on May 23, 2000 by President Clinton, reaffirming
the Administration’s support for increasing contracting opportunities for WOSBs] will not the Administration’s support for increasing contracting opportunities for WOSBs] will not
be achieved without the use of some mandatory tool which enables contracting officers to be achieved without the use of some mandatory tool which enables contracting officers to
identify WOSBs and establish competition among those businesses for the provision of
goods and services.34
The House report also argued that the bill was narrowly tailored because it did not establish sole
source authority for WOSBs and limited WOSB set-asides to industries in which WOSBs are
underrepresented in obtaining federal contracts.

32 U.S. Congress, House Committee on Small Business, 32 U.S. Congress, House Committee on Small Business, Equity in Contracting For Women Act of 2000, report to , report to
accompany H.R. 4897, 106th Cong., 2nd sess., September 21, 2000, H.Rept. 106-879 (Washington, DC: GPO, 2000), p. accompany H.R. 4897, 106th Cong., 2nd sess., September 21, 2000, H.Rept. 106-879 (Washington, DC: GPO, 2000), p.
2 (hereinafter cited as Committee on Small Business, 2 (hereinafter cited as Committee on Small Business, Equity in Contracting For Women Act of 2000 report). ).
33 Committee on Small Business, 33 Committee on Small Business, Equity in Contracting For Women Act of 2000 report, p. 2. , p. 2.
34 Committee on Small Business, Equity in Contracting For Women Act of 2000 report, p. 3.
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Congressional Research Service 11 SBA Women-Owned Small Business Federal Contracting Program identify WOSBs and establish competition among those businesses for the provision of goods and services.34 The House report also argued that the bill was narrowly tailored because it did not establish sole source authority for WOSBs and limited WOSB set-asides to industries in which WOSBs are underrepresented in obtaining federal contracts. WOSB Program Requirements
The Consolidated Appropriations Act, 2001 (P.L. 106-554) specified that federal contracting The Consolidated Appropriations Act, 2001 (P.L. 106-554) specified that federal contracting
officers could not set aside contracts for WOSBs or EDWOSBs unless (1) they had a reasonable officers could not set aside contracts for WOSBs or EDWOSBs unless (1) they had a reasonable
expectation that two or more eligible business concerns would submit offers for the contract, (2) expectation that two or more eligible business concerns would submit offers for the contract, (2)
the anticipated award price of the contract (including options) does not exceed $5 million for the anticipated award price of the contract (including options) does not exceed $5 million for
manufacturing contracts and $3 million for all other contracts, and (3) the contract award can be manufacturing contracts and $3 million for all other contracts, and (3) the contract award can be
made at a fair and reasonable price. made at a fair and reasonable price.
In 2011, the set-aside award caps were increased to $6.5 million for manufacturing contracts and In 2011, the set-aside award caps were increased to $6.5 million for manufacturing contracts and
$4 million for all other contracts to account for inflation.35 In 2013, P.L. 112-239, the National $4 million for all other contracts to account for inflation.35 In 2013, P.L. 112-239, the National
Defense Authorization Act for Fiscal Year 2013, removed the caps.36 Defense Authorization Act for Fiscal Year 2013, removed the caps.36
Eligibility Requirements
The Consolidated Appropriations Act, 2001 (P.L. 106-554) also specified recipient eligibility The Consolidated Appropriations Act, 2001 (P.L. 106-554) also specified recipient eligibility
requirements (see below) and required the SBA to conduct a study to identify industries in which requirements (see below) and required the SBA to conduct a study to identify industries in which
WOSBs are underrepresented (and, by inference, substantially underrepresented) with respect to WOSBs are underrepresented (and, by inference, substantially underrepresented) with respect to
federal procurement contracting. In addition, the SBA had to develop criteria to define an federal procurement contracting. In addition, the SBA had to develop criteria to define an
EDWOSB because the act did not define economic disadvantage. The WOSB program could not EDWOSB because the act did not define economic disadvantage. The WOSB program could not
begin until those determinations were made. begin until those determinations were made.
To participate in the program, the act specified that WOSBs must To participate in the program, the act specified that WOSBs must
 be a small business (as defined by the SBA);  be a small business (as defined by the SBA);
 be at least 51% unconditionally and directly owned and controlled by one or  be at least 51% unconditionally and directly owned and controlled by one or
more women who are U.S. citizens;37 more women who are U.S. citizens;37
 have women manage day-to-day operations and make long-term decisions; and  have women manage day-to-day operations and make long-term decisions; and
 be certified by a federal agency, a state government, the SBA, or a national  be certified by a federal agency, a state government, the SBA, or a national
certifying entity approved by the SBA or self-certify their eligibility to the federal certifying entity approved by the SBA or self-certify their eligibility to the federal
contracting officer with adequate documentation according to standards contracting officer with adequate documentation according to standards
established by the SBA. established by the SBA.
Certification
As mentioned, P.L. 113-291 (NDAA 2015), among other provisions, removed the ability of small
businesses to self-certify their eligibility for the WOSB program as a means to ensure that the
program’s contracts are awarded only to intended recipients. The act also required the SBA to
implement its own certification process for WOSBs. The SBA announced in the Federal Register
that it would implement its own certification process for the WOSB program and remove the

34 Committee on Small Business, Equity in Contracting For Women Act of 2000 report, p. 3. 35 Department of Defense, GSA, National Aeronautics and Space Administration, “Federal Acquisition Regulation; 35 Department of Defense, GSA, National Aeronautics and Space Administration, “Federal Acquisition Regulation;
Women-Owned Small Business (WOSB) Program,” 76 Women-Owned Small Business (WOSB) Program,” 76 Federal Register 18305, April 1, 2011; and SBA, “Women- 18305, April 1, 2011; and SBA, “Women-
Owned Small Business Federal Contract Program,” 77Owned Small Business Federal Contract Program,” 77 Federal Register 1857, January 12, 2012. 1857, January 12, 2012.
36 SBA, “Women-Owned Small Business Federal Contracting Program,” 7836 SBA, “Women-Owned Small Business Federal Contracting Program,” 78 Federal Register 26504-26506, May 7, 26504-26506, May 7,
2013. 2013.
37 The statute specifies that ownership is to be determined without regard to community property laws. 37 The statute specifies that ownership is to be determined without regard to community property laws.
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Certification As mentioned, P.L. 113-291 (NDAA 2015), among other provisions, removed the ability of small businesses to self-certify their eligibility for the WOSB program as a means to ensure that the program’s contracts are awarded only to intended recipients. The act also required the SBA to implement its own certification process for WOSBs. The SBA announced in the Federal Register that it would implement its own certification process for the WOSB program and remove the ability of small businesses to self-certify their eligibility for the WOSB program on October 15, ability of small businesses to self-certify their eligibility for the WOSB program on October 15,
2020.38 2020.38
In the meantime, WOSBs and EDWOSBs had to be either self-certified or third-party certified to In the meantime, WOSBs and EDWOSBs had to be either self-certified or third-party certified to
participate in the WOSB program. Self-certification requires the business to provide certification participate in the WOSB program. Self-certification requires the business to provide certification
information annually through the SBA’s certification web page (certify.SBA.gov) and have an information annually through the SBA’s certification web page (certify.SBA.gov) and have an
up-to-date profile on the System for Award Management (SAM) website (sam.gov) indicating up-to-date profile on the System for Award Management (SAM) website (sam.gov) indicating
that the business is small and is interested in participating in the WOSB program.39 Self-that the business is small and is interested in participating in the WOSB program.39 Self-
certification is free. certification is free.
In addition, in 2011, the SBA approved four organizations to provide third-party certification In addition, in 2011, the SBA approved four organizations to provide third-party certification
(typically involving a fee): El Paso Hispanic Chamber of Commerce, National Women Business (typically involving a fee): El Paso Hispanic Chamber of Commerce, National Women Business
Owners Corporation, U.S. Women’s Chamber of Commerce, and Women’s Business Enterprise Owners Corporation, U.S. Women’s Chamber of Commerce, and Women’s Business Enterprise
National Council.40 Third-party certification continues to be an option. National Council.40 Third-party certification continues to be an option.
WOSBs and EDWOSBS that are not certified are no longer eligible to participate in the WOSB WOSBs and EDWOSBS that are not certified are no longer eligible to participate in the WOSB
program. Other women-owned small businesses may continue to self-certify their status as a program. Other women-owned small businesses may continue to self-certify their status as a
WOSB, receive contract awards outside of the WOSB program, and count toward an agency’s WOSB, receive contract awards outside of the WOSB program, and count toward an agency’s
5% procurement goal.41 5% procurement goal.41
Defining Economic Disadvantage
EDWOSBs must meet all WOSB contracting program requirements and be economically
disadvantaged, which, as presently defined by the SBA, means that they must be
 owned and controlled by one or more women, each with a personal net worth less
than $750,000;
 owned and controlled by one or more women, each with $350,000 or less in
adjusted gross income averaged over the previous three years; and

38 SBA, “Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business 38 SBA, “Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business
Certification,” 85Certification,” 85 Federal Register 27650, May 11, 2020. 27650, May 11, 2020.
39 With a few exceptions, businesses interested in bidding on a federal contract must obtain a Dun & Bradstreet Data 39 With a few exceptions, businesses interested in bidding on a federal contract must obtain a Dun & Bradstreet Data
Universal Numbering System (DUNS) number (i.e., a unique nine-digit identification number) for each of the Universal Numbering System (DUNS) number (i.e., a unique nine-digit identification number) for each of the
business’s physical locations, and register with the federal government’s System for Award Management (SAM). business’s physical locations, and register with the federal government’s System for Award Management (SAM).
Government agencies use SAM for several purposes, including to find contractors. Businesses also must match their Government agencies use SAM for several purposes, including to find contractors. Businesses also must match their
products and services to a North American Industry Classification System (NAICS) code. Businesses generally have a products and services to a North American Industry Classification System (NAICS) code. Businesses generally have a
primary NAICS code and may have multiple NAICS codes if they sell multiple products and services. Businesses that primary NAICS code and may have multiple NAICS codes if they sell multiple products and services. Businesses that
identify themselves as a small business in SAM must (1) meet the Small Business Act’s definition of a small business identify themselves as a small business in SAM must (1) meet the Small Business Act’s definition of a small business
and (2) not exceed size standards established, and updated periodically, by the SBA. See SBA, “Federal Contracting and (2) not exceed size standards established, and updated periodically, by the SBA. See SBA, “Federal Contracting
Guide: Basic Requirements,” at https://www.sba.gov/federal-contracting/contracting-guide/basic-requirements; and Guide: Basic Requirements,” at https://www.sba.gov/federal-contracting/contracting-guide/basic-requirements; and
U.S. Bureau of the Census, “North American Industry Classification System,” at https://www.census.gov/eos/www/U.S. Bureau of the Census, “North American Industry Classification System,” at https://www.census.gov/eos/www/
naics/. For additional information and analysis, see CRS Report R44490, naics/. For additional information and analysis, see CRS Report R44490, Unique Identification Codes for Federal
Contractors: DUNS Numbers and CAGE Codes
, by L. Elaine Halchin; CRS Report RS22536, , by L. Elaine Halchin; CRS Report RS22536, Overview of the Federal
Procurement Process and Resources
, by L. Elaine Halchin; and CRS Report R45576, , by L. Elaine Halchin; and CRS Report R45576, An Overview of Small Business
Contracting
, by Robert Jay Dilger. , by Robert Jay Dilger.
40 SBA, “Women-Owned Small Business Federal Contracting program: Get certified as a women-owned small 40 SBA, “Women-Owned Small Business Federal Contracting program: Get certified as a women-owned small
business,” at https://www.sba.gov/federal-contracting/contracting-assistance-programs/women-owned-small-business-business,” at https://www.sba.gov/federal-contracting/contracting-assistance-programs/women-owned-small-business-
federal-contracting-program; and GAO, federal-contracting-program; and GAO, Women-Owned Small Business Program: Actions Needed to Address
Continued Oversight Issues
, GAO-19-563T, May 16, 2019, p. 3, at https://www.gao.gov/products/GAO-19-563T , GAO-19-563T, May 16, 2019, p. 3, at https://www.gao.gov/products/GAO-19-563T
(hereinafter cited as GAO-19-563T, (hereinafter cited as GAO-19-563T, WOSB Program: Continued Oversight Issues). ).
41 SBA, “Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business 41 SBA, “Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business
Certification,” 85Certification,” 85 Federal Register 27650, May 11, 2020. 27650, May 11, 2020.
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Defining Economic Disadvantage EDWOSBs must meet all WOSB contracting program requirements and be economically disadvantaged, which, as presently defined by the SBA, means that they must be  owned and controlled by one or more women, each with a personal net worth less than $750,000;  owned and controlled by one or more women, each with $350,000 or less in adjusted gross income averaged over the previous three years; and  owned and controlled by one or more women, each with $6 million or less in  owned and controlled by one or more women, each with $6 million or less in
personal assets. personal assets.
The SBA defined economic disadvantage using its experience with the 8(a) program as a guide The SBA defined economic disadvantage using its experience with the 8(a) program as a guide
(i.e., reviewing the owner’s income, personal net worth, and the fair market value of her total (i.e., reviewing the owner’s income, personal net worth, and the fair market value of her total
assets).42 assets).42
As of As of February 10August 5, 2021, there were , 2021, there were 1,7152,461 certified WOSBs and 1, certified WOSBs and 1,130441 certified EDWOSBs certified EDWOSBs
registered in the SBA’s online database.43 There were registered in the SBA’s online database.43 There were 79,50977,217 self-certified WOSBs and self-certified WOSBs and 32,107
self-certified EDWOSBsWOSB joint ventures and 32,564 self-certified EDWOSBs and EDWOSB joint ventures registered in the SBA’s online database on that date.44 registered in the SBA’s online database on that date.44
The 10-Year Delay in WOSB’s Implementation
As mentioned, the WOSB program’s implementation was delayed for over 10 years, primarily As mentioned, the WOSB program’s implementation was delayed for over 10 years, primarily
due to the SBA’s difficulty in identifying an appropriate methodology to determine “the due to the SBA’s difficulty in identifying an appropriate methodology to determine “the
industries in which WOSBs are underrepresented (and, by inference, substantially industries in which WOSBs are underrepresented (and, by inference, substantially
underrepresented) with respect to federal procurement contracting.”45 underrepresented) with respect to federal procurement contracting.”45
The SBA completed a draft of the legislatively mandated study of underrepresented (and, by The SBA completed a draft of the legislatively mandated study of underrepresented (and, by
inference, substantially underrepresented) NAICS industrial codes in September 2001, using inference, substantially underrepresented) NAICS industrial codes in September 2001, using
internal resources. The SBA then submitted proposed regulations to implement the WOSB internal resources. The SBA then submitted proposed regulations to implement the WOSB
program to the Office of Management and Budget (OMB), which is required by law to review all program to the Office of Management and Budget (OMB), which is required by law to review all
draft regulations before publication within 90 days of their submission to OMB.46 However, the draft regulations before publication within 90 days of their submission to OMB.46 However, the
SBA withdrew the regulations on April 24, 2002, before the review was complete “because the
SBA Administrator had concerns about the content and constitutionality of its draft industry study
and believed that it needed to contract with the National Academy of Science (NAS) to review the
draft industry study and recommend any changes the NAS believed were necessary.”47 The SBA
awarded a contract to NAS in late 2003 to conduct the study.

42 SBA, “The Women-Owned Small Business Federal Contract Assistance Program,” 7142 SBA, “The Women-Owned Small Business Federal Contract Assistance Program,” 71 Federal Register 34551, June 34551, June
15, 2006; and SBA, “Women-Owned Small Business Federal Contract Program,” 75 15, 2006; and SBA, “Women-Owned Small Business Federal Contract Program,” 75 Federal Register 62265, October 62265, October
7, 2010. 7, 2010.
43 SBA, “Dynamic Small Business Search,” accessed on 43 SBA, “Dynamic Small Business Search,” accessed on February 10August 5, 2021, at https://web.sba.gov/pro-net/search/, 2021, at https://web.sba.gov/pro-net/search/
dsp_dsbs.cfm. dsp_dsbs.cfm.
44 SBA, “Dynamic Small Business Search,” accessed on 44 SBA, “Dynamic Small Business Search,” accessed on February 10August 5, 2021, at https://web.sba.gov/pro-net/search/, 2021, at https://web.sba.gov/pro-net/search/
dsp_dsbs.cfm. dsp_dsbs.cfm.
45 For a discussion of the various methodological approaches considered, see SBA, “Women-Owned Small Business 45 For a discussion of the various methodological approaches considered, see SBA, “Women-Owned Small Business
Federal Contract Program,” 75 Federal Contract Program,” 75 Federal Register, October 7, 2010, pp. 62259-62262. , October 7, 2010, pp. 62259-62262.
46 SBA, “Women-Owned Small Business Federal Contract Program,” 75 46 SBA, “Women-Owned Small Business Federal Contract Program,” 75 Federal Register 62259, October 7, 2010. 62259, October 7, 2010.
The North American Industry Classification System (NAICS, pronounced Nakes) was developed The North American Industry Classification System (NAICS, pronounced Nakes) was developed
under the direction and guidance of the Office of Management and Budget (OMB) as the standard under the direction and guidance of the Office of Management and Budget (OMB) as the standard
for use by Federal statistical agencies in classifying business establishments for the collection, for use by Federal statistical agencies in classifying business establishments for the collection,
tabulation, presentation, and analysis of statistical data describing the U.S. economy. ... NAICS is a tabulation, presentation, and analysis of statistical data describing the U.S. economy. ... NAICS is a
2- through 6-digit hierarchical classification system, offering five levels of detail. Each digit in the 2- through 6-digit hierarchical classification system, offering five levels of detail. Each digit in the
code is part of a series of progressively narrower categories, and the more digits in the code signify code is part of a series of progressively narrower categories, and the more digits in the code signify
greater classification detail. The first two digits designate the economic sector, the third digit greater classification detail. The first two digits designate the economic sector, the third digit
designates the subsector, the fourth digit designates the industry group, the fifth digit designates the designates the subsector, the fourth digit designates the industry group, the fifth digit designates the
NAICS industry, and the sixth digit designates the national industry.
See U.S. Census Bureau, “North American Industry Classification System,” at https://www.census.gov/eos/www/naics/
faqs/faqs.html#q5.
47 SBA, “Semiannual Regulatory Agenda,” 67 Federal Register 34004, May 13, 2002; and U.S. Women’s Chamber of
Commerce v. U.S. Small Business Administration
, November 30, 2005, at https://casetext.com/case/us-womens-
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Congressional Research Service 14 SBA Women-Owned Small Business Federal Contracting Program SBA withdrew the regulations on April 24, 2002, before the review was complete “because the SBA Administrator had concerns about the content and constitutionality of its draft industry study and believed that it needed to contract with the National Academy of Science (NAS) to review the draft industry study and recommend any changes the NAS believed were necessary.”47 The SBA awarded a contract to NAS in late 2003 to conduct the study. NAS completed its analysis and issued a report on the SBA’s study on March 11, 2005. The NAS completed its analysis and issued a report on the SBA’s study on March 11, 2005. The
report indicated that the SBA asked NAS to conduct the review “because of the history of legal report indicated that the SBA asked NAS to conduct the review “because of the history of legal
challenges to race- and gender-conscious contracting programs at the federal and local levels.”48 challenges to race- and gender-conscious contracting programs at the federal and local levels.”48
NAS concluded that the SBA’s study was “problematic in several respects, including that the NAS concluded that the SBA’s study was “problematic in several respects, including that the
documentation of data sources and estimation methods is inadequate for evaluation purposes.” documentation of data sources and estimation methods is inadequate for evaluation purposes.”
NAS made several recommendations for a new study, including that the SBA use more current NAS made several recommendations for a new study, including that the SBA use more current
data, different industry classifications, and consistent monetary and numeric utilization measures data, different industry classifications, and consistent monetary and numeric utilization measures
to provide more complete documentation of data and methods.49 The SBA later characterized to provide more complete documentation of data and methods.49 The SBA later characterized
NAS’s analysis as indicating that the SBA study was “fatally flawed.”50 In response to that NAS’s analysis as indicating that the SBA study was “fatally flawed.”50 In response to that
finding, the SBA issued a solicitation in October 2005, seeking a private contractor to perform a finding, the SBA issued a solicitation in October 2005, seeking a private contractor to perform a
revised study. In February 2006, a contract was awarded to the Kaufman-RAND Institute for revised study. In February 2006, a contract was awarded to the Kaufman-RAND Institute for
Entrepreneurship Public Policy (RAND). The RAND study was published in April 2007.51 Entrepreneurship Public Policy (RAND). The RAND study was published in April 2007.51
The RAND report noted that underrepresentation is typically referred to as a disparity ratio, a The RAND report noted that underrepresentation is typically referred to as a disparity ratio, a
measure comparing the use of firms of a particular type (in this case, WOSBs) in a particular measure comparing the use of firms of a particular type (in this case, WOSBs) in a particular
NAICS code to their availability for such contracts in that NAICS code. A disparity of 1.0 NAICS code to their availability for such contracts in that NAICS code. A disparity of 1.0
suggests that firms of a particular type are awarded contracts in the same proportion as their suggests that firms of a particular type are awarded contracts in the same proportion as their
representation in that industry (there is no disparity). A disparity ratio less than 1.0 suggests that representation in that industry (there is no disparity). A disparity ratio less than 1.0 suggests that
the firms are underrepresented in federal contracting in that NAICS code. A ratio greater than 1.0
suggests that the firms are overrepresented.52
RAND identified 28 different approaches to determine underrepresentation and substantial
underrepresentation of WOSBs in federal procurement, each of which yielded a different result.
After examining each approach’s benefits and deficiencies, the SBA defined underrepresentation
as industries having a disparity ratio between 0.5 and 0.8, where the ratio represents the WOSB
share of federal prime contract dollars divided by the WOSB share of total business receipts

NAICS industry, and the sixth digit designates the national industry. See U.S. Census Bureau, “North American Industry Classification System,” at https://www.census.gov/eos/www/naics/faqs/faqs.html#q5. 47 SBA, “Semiannual Regulatory Agenda,” 67 Federal Register 34004, May 13, 2002; and U.S. Women’s Chamber of Commerce v. U.S. Small Business Administration, November 30, 2005, at https://casetext.com/case/us-womens-chamber-of-commerce-v-us-small-business-admin. chamber-of-commerce-v-us-small-business-admin.
48 National Research Council, National Academy of Sciences (NAS), 48 National Research Council, National Academy of Sciences (NAS), Analyzing Information on Women-Owned Small
Businesses in Federal Contracting
, Steering Committee for the Workshop on Women-Owned Small Businesses in , Steering Committee for the Workshop on Women-Owned Small Businesses in
Federal Contracting, Committee on National Statistics, Division of Behavioral and Social Sciences and Education Federal Contracting, Committee on National Statistics, Division of Behavioral and Social Sciences and Education
(Washington, DC: The National Academies Press, 2005), p. 1, at https://www.nap.edu/catalog/11245/analyzing-(Washington, DC: The National Academies Press, 2005), p. 1, at https://www.nap.edu/catalog/11245/analyzing-
information-on-women-owned-small-businesses-in-federal-contracting (hereinafter cited as NAS WOSB report, 2005). information-on-women-owned-small-businesses-in-federal-contracting (hereinafter cited as NAS WOSB report, 2005).
49 NAS WOSB report, 2005, pp. 3-8, 80-87. 49 NAS WOSB report, 2005, pp. 3-8, 80-87.
The NAS report indicated that SBA’s The NAS report indicated that SBA’s
preliminary disparity ratio estimates were developed for industry categories (defined by 2-digit preliminary disparity ratio estimates were developed for industry categories (defined by 2-digit
Standard Industrial Classification or SIC codes) by dividing the Standard Industrial Classification or SIC codes) by dividing the utilization share for each industry share for each industry
by the by the availability share. Utilization was defined as the share accruing to women-owned small share. Utilization was defined as the share accruing to women-owned small
businesses of the total dollar amount of contract actions for federal prime contracts over $25,000 in businesses of the total dollar amount of contract actions for federal prime contracts over $25,000 in
fiscal year 1999 for the particular industry. Availability was defined as the share of women-owned fiscal year 1999 for the particular industry. Availability was defined as the share of women-owned
businesses with paid employees among all businesses with paid employees in the particular businesses with paid employees among all businesses with paid employees in the particular
industry from the 1997 Survey of Women-Owned Business Enterprises. industry from the 1997 Survey of Women-Owned Business Enterprises.
NAS WOSB report, 2005, p. 2. NAS WOSB report, 2005, p. 2.
50 SBA, “Women-Owned Small Business Federal Contract Assistance Procedures,” 72 50 SBA, “Women-Owned Small Business Federal Contract Assistance Procedures,” 72 Federal Register 73287, 73287,
December 27, 2007. December 27, 2007.
51 SBA, “Women-Owned Small Business Federal Contract Assistance Procedures,” 72 51 SBA, “Women-Owned Small Business Federal Contract Assistance Procedures,” 72 Federal Register 73287, 73287,
December 27, 2007. Also, see Elaine Reardon, Nancy Nicosia, and Nancy Young Moore, December 27, 2007. Also, see Elaine Reardon, Nancy Nicosia, and Nancy Young Moore, The Utilization of Women-
Owned Small Businesses in Federal Contracting
, at https://www.rand.org/pubs/technical_reports/TR442.html. , at https://www.rand.org/pubs/technical_reports/TR442.html.
52 SBA, “Congressional Research Service 15 SBA Women-Owned Small Business Federal Women-Owned Small Business Federal ContractContracting Program the firms are underrepresented in federal contracting in that NAICS code. A ratio greater than 1.0 suggests that the firms are overrepresented.52 RAND identified 28 different approaches to determine underrepresentation and substantial underrepresentation of WOSBs in federal procurement, each of which yielded a different result. After examining each approach’s benefits and deficiencies, the SBA defined underrepresentation as industries having a disparity ratio between 0.5 and 0.8, where the ratio represents the WOSB share of federal prime contract dollars divided by the WOSB share of total business receipts Program,” 75 Federal Register 62259, October 7, 2010.
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within a given NAICS code. Substantial underrepresentation was defined as industries with a within a given NAICS code. Substantial underrepresentation was defined as industries with a
disparity ratio between 0.0 and 0.5.53 disparity ratio between 0.0 and 0.5.53
Using that methodology, the SBA identified 83 four-digit NAICS industry groups in its final rule Using that methodology, the SBA identified 83 four-digit NAICS industry groups in its final rule
implementing the WOSB program (October 7, 2010, effective February 4, 2011): implementing the WOSB program (October 7, 2010, effective February 4, 2011):
 45 four-digit NAICS industry groups in which WOSBs are underrepresented  45 four-digit NAICS industry groups in which WOSBs are underrepresented
(225 out of the 1,057 six-digit NAICS industry codes at that time were made (225 out of the 1,057 six-digit NAICS industry codes at that time were made
eligible for EDWOSB set-asides only), and eligible for EDWOSB set-asides only), and
 38 four-digit NAICS industry groups in which WOSBs are substantially  38 four-digit NAICS industry groups in which WOSBs are substantially
underrepresented (171 out of the 1,057 six-digit NAICS industry codes at that underrepresented (171 out of the 1,057 six-digit NAICS industry codes at that
time were made eligible for WOSB (including EDWOSB) set-asides).54 time were made eligible for WOSB (including EDWOSB) set-asides).54
Mandated Updates of Underrepresented and
Substantially Underrepresented NAICS Codes
In 2014, Congress passed legislation (P.L. 113-291) requiring the SBA to update the list of In 2014, Congress passed legislation (P.L. 113-291) requiring the SBA to update the list of
underrepresented and substantially underrepresented NAICS codes by January 2, 2016, and then underrepresented and substantially underrepresented NAICS codes by January 2, 2016, and then
conduct a new study and update the NAICS codes every five years thereafter. The SBA asked the conduct a new study and update the NAICS codes every five years thereafter. The SBA asked the
Department of Commerce’s Office of the Chief Economist (OCE) for assistance in conducting a Department of Commerce’s Office of the Chief Economist (OCE) for assistance in conducting a
new study. new study.
The OCE examined the odds of women-owned businesses winning a federal prime contract The OCE examined the odds of women-owned businesses winning a federal prime contract
relative to otherwise similar firms in FY2013 and FY2014 in each of the four-digit NAICS code relative to otherwise similar firms in FY2013 and FY2014 in each of the four-digit NAICS code
industry groups, controlling for the firm’s size and age, legal form of organization, level of industry groups, controlling for the firm’s size and age, legal form of organization, level of
government security clearance, past federal prime contracting performance ratings, and government security clearance, past federal prime contracting performance ratings, and
membership in various categories of firms having federal government-wide procurement goals. membership in various categories of firms having federal government-wide procurement goals.
OCE found that women-owned businesses were less likely to win federal contracts in 254 of the OCE found that women-owned businesses were less likely to win federal contracts in 254 of the
304 industry groups in the study, and women-owned businesses in 109 of the 304 industry groups 304 industry groups in the study, and women-owned businesses in 109 of the 304 industry groups
had statistically significant lower odds of winning federal contracts than otherwise similar had statistically significant lower odds of winning federal contracts than otherwise similar
businesses not owned by women at the 95% confidence level.55 businesses not owned by women at the 95% confidence level.55
Based on the OCE study, the SBA increased the number of underrepresented and substantially
underrepresented four-digit NAICS codes from 83 to 113, effective March 3, 2016 (21 in which
WOSBs are underrepresented (EDWOSB set-asides only) and 92 in which WOSBs are
substantially underrepresented (WOSB and EDWOSB set-asides).56

52 SBA, “Women-Owned Small Business Federal Contract Program,” 75 Federal Register 62259, October 7, 2010. 53 SBA, “Women-Owned Small Business Federal Contract Assistance Procedures,” 72 53 SBA, “Women-Owned Small Business Federal Contract Assistance Procedures,” 72 Federal Register 73287-73289, 73287-73289,
December 27, 2007. December 27, 2007.
54 SBA, “Women-Owned Small Business Federal Contract Program,” 75 54 SBA, “Women-Owned Small Business Federal Contract Program,” 75 Federal Register 62259-62262, October 7, 62259-62262, October 7,
2010; and U.S. Bureau of the Census, “North American Industry Classification System: 60 digit 2007 Code files,” at 2010; and U.S. Bureau of the Census, “North American Industry Classification System: 60 digit 2007 Code files,” at
https://www.census.gov/eos/www/naics/downloadables/downloadables.html. https://www.census.gov/eos/www/naics/downloadables/downloadables.html.
55 David N. Beede and Robert N. Rubinovitz, “Utilization of Women-Owned Businesses in Federal Prime 55 David N. Beede and Robert N. Rubinovitz, “Utilization of Women-Owned Businesses in Federal Prime
Contracting,” U.S. Department of Commerce, Office of the Chief Economist, Economics and Statistics Administration, Contracting,” U.S. Department of Commerce, Office of the Chief Economist, Economics and Statistics Administration,
December 31, 2015, at https://www.sba.gov/sites/default/files/wosb_study_report.pdf; and SBA, “Women-Owned December 31, 2015, at https://www.sba.gov/sites/default/files/wosb_study_report.pdf; and SBA, “Women-Owned
Small Business Federal Contract Program; Identification of Eligible Industries,” 81 Small Business Federal Contract Program; Identification of Eligible Industries,” 81 Federal Register 11341, March 3, 11341, March 3,
2016.
56 SBA, “ Congressional Research Service 16 SBA Women-Owned Small Business Federal Women-Owned Small Business Federal Contract Program; Identification of Eligible Industries,” 81 Federal
Register
11340-11343, March 3, 2016.
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Contracting Program Based on the OCE study, the SBA increased the number of underrepresented and substantially underrepresented four-digit NAICS codes from 83 to 113, effective March 3, 2016 (21 in which WOSBs are underrepresented (EDWOSB set-asides only) and 92 in which WOSBs are substantially underrepresented (WOSB and EDWOSB set-asides).56
OMB updates the NAICS every five years. In response to OMB’s release of NAICS 2017, which OMB updates the NAICS every five years. In response to OMB’s release of NAICS 2017, which
replaced NAICS 2012, the SBA reduced the number of underrepresented and substantially replaced NAICS 2012, the SBA reduced the number of underrepresented and substantially
underrepresented four-digit NAICS codes from 113 to 112, effective October 1, 2017. The underrepresented four-digit NAICS codes from 113 to 112, effective October 1, 2017. The
reduction took place because NAICS 2017 merged two four-digit NAICS industry groups that reduction took place because NAICS 2017 merged two four-digit NAICS industry groups that
affected the WOSB program. The merger also resulted in the number of four-digit NAICS affected the WOSB program. The merger also resulted in the number of four-digit NAICS
industry groups in which WOSBs are substantially underrepresented (WOSB and EDWOSB set-industry groups in which WOSBs are substantially underrepresented (WOSB and EDWOSB set-
asides) to fall from 92 to 91.57 Overall, WOSB set-asides may be provided to WOSBs (including asides) to fall from 92 to 91.57 Overall, WOSB set-asides may be provided to WOSBs (including
EDWOSBs) in 364 (out of 1,023) six-digit NAICS industry codes and to EDWOSBs exclusively EDWOSBs) in 364 (out of 1,023) six-digit NAICS industry codes and to EDWOSBs exclusively
in 80 (out of 1,023) six-digit NAICS industry codes.58 in 80 (out of 1,023) six-digit NAICS industry codes.58
Sole Source Award Authority
P.L. 113-291 (NDAA 2015), enacted in 2014, provides federal agencies authority to award sole P.L. 113-291 (NDAA 2015), enacted in 2014, provides federal agencies authority to award sole
source contracts to WOSBs (including EDWOSBs) eligible under the WOSB program if source contracts to WOSBs (including EDWOSBs) eligible under the WOSB program if
 the contract is assigned a NAICS code in which the SBA has determined that  the contract is assigned a NAICS code in which the SBA has determined that
WOSBs are substantially underrepresented in federal procurement; WOSBs are substantially underrepresented in federal procurement;
 the contracting officer does not have a reasonable expectation that offers would  the contracting officer does not have a reasonable expectation that offers would
be received from two or more WOSBs (including EDWOSBs); and be received from two or more WOSBs (including EDWOSBs); and
 the anticipated total value of the contract, including any options, does not exceed  the anticipated total value of the contract, including any options, does not exceed
$4.5 million ($7 million for manufacturing contracts).59 $4.5 million ($7 million for manufacturing contracts).59
NDAA 2015 also provides federal agencies authority to award sole source contracts exclusively NDAA 2015 also provides federal agencies authority to award sole source contracts exclusively
to EDWOSBs eligible under the WOSB program if to EDWOSBs eligible under the WOSB program if
 the contract is assigned a NAICS code in which SBA has determined that WOSB  the contract is assigned a NAICS code in which SBA has determined that WOSB
concerns are underrepresented in federal procurement; concerns are underrepresented in federal procurement;
 the contracting officer does not have a reasonable expectation that offers would  the contracting officer does not have a reasonable expectation that offers would
be received from two or more EDWOSB concerns; and be received from two or more EDWOSB concerns; and
 the anticipated total value of the contract, including any options, does not exceed  the anticipated total value of the contract, including any options, does not exceed
$4.5 million ($7 million for manufacturing contracts).60 $4.5 million ($7 million for manufacturing contracts).60
Expanding the WOSB program to include sole source contracts was designed, along with WOSB Expanding the WOSB program to include sole source contracts was designed, along with WOSB
set-asides, to help federal agencies achieve their statutory goal of awarding at least 5% of their set-asides, to help federal agencies achieve their statutory goal of awarding at least 5% of their
federal contracting dollars to WOSBs. The SBA published a final rule expanding the WOSB
program to include sole source awards on September 14, 2015 (effective October 14, 2015).61

2016. 56 SBA, “Women-Owned Small Business Federal Contract Program; Identification of Eligible Industries,” 81 Federal Register 11340-11343, March 3, 2016. 57 SBA, “Women-Owned Small Business Federal Contract Program NAICS Code Updates,” 82 57 SBA, “Women-Owned Small Business Federal Contract Program NAICS Code Updates,” 82 Federal Register
47278-47287 October 11, 2017. 47278-47287 October 11, 2017.
58 SBA, “Qualifying NAICS for the Women-Owned Small Business Federal Contracting program,” at 58 SBA, “Qualifying NAICS for the Women-Owned Small Business Federal Contracting program,” at
https://www.sba.gov/document/support—qualifying-naics-women-owned-small-business-federal-contracting-program. https://www.sba.gov/document/support—qualifying-naics-women-owned-small-business-federal-contracting-program.
59 FAR §19.1506(b) and FAR §19.1506(c). 59 FAR §19.1506(b) and FAR §19.1506(c).
60 FAR §19.1506(a) and FAR §19.1506(c). 60 FAR §19.1506(a) and FAR §19.1506(c).
61 SBA, “ Congressional Research Service 17 SBA Women-Owned Small Business Federal Women-Owned Small Business Federal ContractContracting Program federal contracting dollars to WOSBs. The SBA published a final rule expanding the WOSB program to include sole source awards on September 14, 2015 (effective October 14, 2015).61 Program,” 80 Federal Register 55019, September 14, 2015.
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Current Administrative Issues
Both GAO and the SBA’s OIG have issued reports and audits of the WOSB program that have Both GAO and the SBA’s OIG have issued reports and audits of the WOSB program that have
been critical of the SBA’s implementation and oversight of the program.62 For example, GAO has been critical of the SBA’s implementation and oversight of the program.62 For example, GAO has
criticized the SBA for delays in implementing the WOSB program and, in 2019, reported that the criticized the SBA for delays in implementing the WOSB program and, in 2019, reported that the
SBA had not fully addressed WOSB program oversight deficiencies, first identified by GAO in SBA had not fully addressed WOSB program oversight deficiencies, first identified by GAO in
2014, related to third-party certifiers, the procedures used to conduct annual eligibility 2014, related to third-party certifiers, the procedures used to conduct annual eligibility
examinations of WOSBs, and “reviews of individual businesses found to be ineligible to better examinations of WOSBs, and “reviews of individual businesses found to be ineligible to better
understand the cause of the high rate of ineligibility in annual reviews and determine what actions understand the cause of the high rate of ineligibility in annual reviews and determine what actions
are needed to address the causes.”63 GAO argued that are needed to address the causes.”63 GAO argued that
the deficiencies in SBA’s oversight of the WOSB program limit SBA’s ability to identify the deficiencies in SBA’s oversight of the WOSB program limit SBA’s ability to identify
potential fraud risks and develop any additional control activities to address these risks. As potential fraud risks and develop any additional control activities to address these risks. As
a result, the program continues to be exposed to the risks of ineligible businesses receiving a result, the program continues to be exposed to the risks of ineligible businesses receiving
set-aside contracts.64 set-aside contracts.64
In addition, GAO noted that, from April 2011 through June 2018, about 3.5% of WOSB set-aside In addition, GAO noted that, from April 2011 through June 2018, about 3.5% of WOSB set-aside
contracts were awarded for ineligible goods or services [NAICS codes].65 contracts were awarded for ineligible goods or services [NAICS codes].65
In 2015, the SBA’s OIG analyzed 34 WOSB program awards made between October 1, 2013, In 2015, the SBA’s OIG analyzed 34 WOSB program awards made between October 1, 2013,
and June 30, 2014, (17 WOSB set-aside awards totaling $6.6 million and 17 EDWOSB set-aside and June 30, 2014, (17 WOSB set-aside awards totaling $6.6 million and 17 EDWOSB set-aside
awards totaling $7.9 million) and found “15 of the 34 set-aside awards were made without awards totaling $7.9 million) and found “15 of the 34 set-aside awards were made without
meeting the WOSB program’s requirements,” and these awards totaled approximately $7.1 meeting the WOSB program’s requirements,” and these awards totaled approximately $7.1
million.66 Specifically, 10 of the 34 WOSB program set-aside awards were made “for work that million.66 Specifically, 10 of the 34 WOSB program set-aside awards were made “for work that
was not eligible to be set aside for the program” and 9 of the 34 awards went to firms that did not was not eligible to be set aside for the program” and 9 of the 34 awards went to firms that did not
have any documentation in the WOSB program’s repository, including 7 of the 17 WOSB set-have any documentation in the WOSB program’s repository, including 7 of the 17 WOSB set-
aside awards, or 41%, and 2 of the 17 EDWOSB set-aside awards, or 12%.”67 The SBA OIG aside awards, or 41%, and 2 of the 17 EDWOSB set-aside awards, or 12%.”67 The SBA OIG
found that “this occurred because agencies’ contracting officers did not comply with the found that “this occurred because agencies’ contracting officers did not comply with the
regulations prior to awarding these awards and SBA did not provide enough outreach or training
to adequately inform them of their responsibilities and the program’s requirements.”68

61 SBA, “Women-Owned Small Business Federal Contract Program,” 80 Federal Register 55019, September 14, 2015. 62 For example, see GAO-01-346, 62 For example, see GAO-01-346, Federal Procurement: Trends and Challenges in Contracting with WOSBs; GAO, ; GAO,
Women-Owned Small Business Program: Certifier Oversight and Additional Eligibility Controls Are Needed, GAO-, GAO-
15-54, October 8, 2014, at https://www.gao.gov/products/GAO-15-54 (hereinafter cited as GAO-15-54, 15-54, October 8, 2014, at https://www.gao.gov/products/GAO-15-54 (hereinafter cited as GAO-15-54, WOSB
Program: Certifier Oversight and Eligibility Controls
); GAO, ); GAO, Small Business Administration: Actions Needed to
Improve Confidence in Small Business Procurement Scorecard
, GAO-18-672, September 27, 2018, at , GAO-18-672, September 27, 2018, at
https://www.gao.gov/products/GAO-18-672; GAO, https://www.gao.gov/products/GAO-18-672; GAO, WOSB: Ongoing Oversight Issues; and GAO-19-563T, ; and GAO-19-563T, WOSB
Program: Continued Oversight Issues
. .
63 GAO-15-54, 63 GAO-15-54, WOSB Program: Certifier Oversight and Eligibility Controls; and GAO-19-563T, ; and GAO-19-563T, WOSB Program:
Continued Oversight Issues
, pp. 3, 4. , pp. 3, 4.
64 GAO-19-168, 64 GAO-19-168, WOSB: Ongoing Oversight Issues, pp. 10-25; and GAO-19-563T, , pp. 10-25; and GAO-19-563T, WOSB Program: Continued
Oversight Issues
, p. 5. , p. 5.
65 GAO-19-563T, 65 GAO-19-563T, WOSB Program: Continued Oversight Issues, p. 5. , p. 5.
66 SBA, OIG “Improvements Needed in SBA’s Management of the Women-Owned Small Business Federal 66 SBA, OIG “Improvements Needed in SBA’s Management of the Women-Owned Small Business Federal
Contracting Program,” Report No. 15-10, May 14, 2015, p. 4, at https://www.sba.gov/document/report-15-10-Contracting Program,” Report No. 15-10, May 14, 2015, p. 4, at https://www.sba.gov/document/report-15-10-
evaluation-report-15-10-improvements-needed-sbas-management-women-owned-small-business-federal (hereinafter evaluation-report-15-10-improvements-needed-sbas-management-women-owned-small-business-federal (hereinafter
cited as SBA, OIG report, cited as SBA, OIG report, SBA’s Management of the WOSB Program). ).
67 Four of the set-aside awards “were improperly set-aside using NAICS codes that SBA had not identified as being 67 Four of the set-aside awards “were improperly set-aside using NAICS codes that SBA had not identified as being
substantially, underrepresented or underrepresented by women-owned businesses. The other six awards should have substantially, underrepresented or underrepresented by women-owned businesses. The other six awards should have
been set aside for an EDWOSB but were misclassified as WOSB set-aside awards.” See SBA, OIG report, been set aside for an EDWOSB but were misclassified as WOSB set-aside awards.” See SBA, OIG report, SBA’s
Management of the WOSB Program
, pp. 4, 5. , pp. 4, 5.
68 SBA, OIG report, SBA’s Management of the WOSB Program, p. 4.
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regulations prior to awarding these awards and SBA did not provide enough outreach or training to adequately inform them of their responsibilities and the program’s requirements.”68 In a related development, in 2018, the SBA’s OIG analyzed 56 WOSB sole source contracts In a related development, in 2018, the SBA’s OIG analyzed 56 WOSB sole source contracts
awarded between January 1, 2016, and April 30, 2017, and found that 50 of the 56 contracts, awarded between January 1, 2016, and April 30, 2017, and found that 50 of the 56 contracts,
totaling approximately $52.2 million, were made “without having the necessary documentation to totaling approximately $52.2 million, were made “without having the necessary documentation to
determine eligibility” of the award recipients.69 Examples of missing documentation included determine eligibility” of the award recipients.69 Examples of missing documentation included
WOSB and EDWOSB self-certifications, articles of incorporation, birth certificates, and financial WOSB and EDWOSB self-certifications, articles of incorporation, birth certificates, and financial
information.70 information.70
Current Oversight and Legislative Issues
Issues of particular interest to Congress during the 117th Congress may include congressional Issues of particular interest to Congress during the 117th Congress may include congressional
oversight of the SBA’s implementation of the WOSB program’s certification procedures; oversight of the SBA’s implementation of the WOSB program’s certification procedures;
congressional oversight of the SBA’s training of federal procurement officers to ensure that congressional oversight of the SBA’s training of federal procurement officers to ensure that
WOSB awards are made only to eligible firms in eligible industries; the performance of federal WOSB awards are made only to eligible firms in eligible industries; the performance of federal
agencies in achieving the 5% procurement goal for WOSBs; and the WOSB program’s efficacy in agencies in achieving the 5% procurement goal for WOSBs; and the WOSB program’s efficacy in
helping to meet the 5% goal. helping to meet the 5% goal.
As shown As shown inin Table 1, federal procurement officers’ use of the WOSB program has increased from federal procurement officers’ use of the WOSB program has increased from
about $21 million in FY2011 to $1.about $21 million in FY2011 to $1.08259 billion in billion in FY2019FY2020, with most of that increase resulting , with most of that increase resulting
from rising use of WOSB set-asides (from $15 million in FY2011 to $from rising use of WOSB set-asides (from $15 million in FY2011 to $897 million in FY20191.085 billion in FY2020). ).
Although WOSB program usage is increasing, WOSB set-asides and sole source awards continue Although WOSB program usage is increasing, WOSB set-asides and sole source awards continue
to account for a relatively small portion of the federal contracts awarded to WOSBs. Although the to account for a relatively small portion of the federal contracts awarded to WOSBs. Although the
WOSB program has been operational since 2011, many federal agencies have little experience WOSB program has been operational since 2011, many federal agencies have little experience
with the program. with the program.
For example, in For example, in FY2019FY2020, about , about 3534% of the federal contracts awarded to WOSBs were awarded in % of the federal contracts awarded to WOSBs were awarded in
full and open competition with other firms, about 61% were awarded with another small business full and open competition with other firms, about 61% were awarded with another small business
preference (such as the 8(a) and HUBZone programs), and about preference (such as the 8(a) and HUBZone programs), and about 45% were awarded with a WOSB % were awarded with a WOSB
preference.71 preference.71
Also, GAO found that from the third quarter of FY2011 through the third quarter of FY2018, six Also, GAO found that from the third quarter of FY2011 through the third quarter of FY2018, six
federal agencies accounted for nearly 83% of the contract amount awarded under the WOSB federal agencies accounted for nearly 83% of the contract amount awarded under the WOSB
program: DOD (48.6%), Department of Homeland Security (DHS) (12.4%), Department of program: DOD (48.6%), Department of Homeland Security (DHS) (12.4%), Department of
Commerce (8.0%), Department of Agriculture (6.3%), Department of Health and Human Services Commerce (8.0%), Department of Agriculture (6.3%), Department of Health and Human Services
(4.0%), and GSA (4.0%). All other federal agencies accounted for 16.8%.72 (4.0%), and GSA (4.0%). All other federal agencies accounted for 16.8%.72
GAO conducted an audit of the WOSB program from October 2017 to March 2019. As part of the
audit, GAO interviewed 14 stakeholder groups (staff from DHS, DOD, and GSA, eight
contracting officers within these agencies, and three WOSB third-party certifiers) to obtain their
views on WOSB program usage. The stakeholder groups identified several positive aspects about

68 SBA, OIG report, SBA’s Management of the WOSB Program, p. 4. 69 SBA, OIG “SBA’s Women-Owned Small Business Federal Contracting Program,” Report No. 18-18, June 20, 2018, 69 SBA, OIG “SBA’s Women-Owned Small Business Federal Contracting Program,” Report No. 18-18, June 20, 2018,
p. 4, at https://www.sba.gov/document/report-18-18-sbas-women-owned-small-business-contracting-program p. 4, at https://www.sba.gov/document/report-18-18-sbas-women-owned-small-business-contracting-program
(hereinafter cited as SBA, OIG report, (hereinafter cited as SBA, OIG report, SBA’s WOSB Federal Contracting Program). ).
70 SBA, OIG report, 70 SBA, OIG report, SBA’s WOSB Federal Contracting Program, p. 4. , p. 4.
71 71 GSA, Federal Procurement Data System—Next Generation, accessed on August 13, 2020, at https://www.fpds.gov/
fpdsng/Data generated using GSA, “Sam.Gov Data Bank, Ad Hoc report,” August 2, 2021, at https://sam.gov/reports/awards/adhoc. .
72 GAO-19-168, 72 GAO-19-168, WOSB: Ongoing Oversight Issues, p. 29. From the third quarter of FY2011 through the third quarter of , p. 29. From the third quarter of FY2011 through the third quarter of
FY2018, these six federal agencies accounted for about 77.6% of total federal contract award amounts: DOD (65.2%), FY2018, these six federal agencies accounted for about 77.6% of total federal contract award amounts: DOD (65.2%),
Department of Homeland Security (DHS) (3.98%), Department of Commerce (0.6%), Department of Agriculture Department of Homeland Security (DHS) (3.98%), Department of Commerce (0.6%), Department of Agriculture
(1.16%), Department of Health and Human Services (4.5%), and GSA (2.14%). All other federal agencies accounted (1.16%), Department of Health and Human Services (4.5%), and GSA (2.14%). All other federal agencies accounted
for 12.4%. GSA, Federal Procurement Data System—Next Generation, accessed on April 21, 2020, at for 12.4%. GSA, Federal Procurement Data System—Next Generation, accessed on April 21, 2020, at
https://www.fpds.gov/fpdsng/. https://www.fpds.gov/fpdsng/.
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GAO conducted an audit of the WOSB program from October 2017 to March 2019. As part of the audit, GAO interviewed 14 stakeholder groups (staff from DHS, DOD, and GSA, eight contracting officers within these agencies, and three WOSB third-party certifiers) to obtain their views on WOSB program usage. The stakeholder groups identified several positive aspects about the WOSB program, including that it provided WOSBs greater opportunities to win federal the WOSB program, including that it provided WOSBs greater opportunities to win federal
contracts, and that the SBA had several initiatives underway to help improve collaboration contracts, and that the SBA had several initiatives underway to help improve collaboration
between federal agencies and the small business community.73 The stakeholders also identified between federal agencies and the small business community.73 The stakeholders also identified
several impediments that limited the WOSB program’s use by federal contracting officers, several impediments that limited the WOSB program’s use by federal contracting officers,
including the following: including the following:
  Sole Source Authority Rules.
Executing sole source authority under the WOSB program is difficult for contracting Executing sole source authority under the WOSB program is difficult for contracting
officers because rules for sole source authority under the WOSB program are different officers because rules for sole source authority under the WOSB program are different
from those under SBA programs.... For example, the FAR’s [Federal Acquisition from those under SBA programs.... For example, the FAR’s [Federal Acquisition
Regulation] requirement that contracting officers must justify, in writing, why they do not Regulation] requirement that contracting officers must justify, in writing, why they do not
expect other WOSBs or EDWOSBs to submit offers on a contract is stricter under the expect other WOSBs or EDWOSBs to submit offers on a contract is stricter under the
WOSB program that it is for the 8(a) program.74 WOSB program that it is for the 8(a) program.74
  Industry Restrictions.
13 of the 14 stakeholder groups ... commented on the requirement that WOSB program set- 13 of the 14 stakeholder groups ... commented on the requirement that WOSB program set-
asides be awardedasides be awarded within certain industries, represented by NAICS codes. For example, within certain industries, represented by NAICS codes. For example,
two third-party certifiers ... recommended that the NAICS codes be expanded or eliminated two third-party certifiers ... recommended that the NAICS codes be expanded or eliminated
to provide greater opportunities for WOSBs to win contracts under the program.75 to provide greater opportunities for WOSBs to win contracts under the program.75
  Eligibility Documentation Requirements.
7 of the 14 stakeholder groups discussed the requirement for the contracting officer to 7 of the 14 stakeholder groups discussed the requirement for the contracting officer to
review program eligibility documentation and how this requirement affects their decision review program eligibility documentation and how this requirement affects their decision
to use the program. to use the program.
For example, staff from one contracting office said that using the 8(a) or HUBZone For example, staff from one contracting office said that using the 8(a) or HUBZone
programs is easier because 8(a) and HUBZone applicants are already certified by the SBA; programs is easier because 8(a) and HUBZone applicants are already certified by the SBA;
therefore, the additional step to verify documentation for eligibility is not needed.... GSA therefore, the additional step to verify documentation for eligibility is not needed.... GSA
officials noted that eliminating the need for contracting officers to take additional steps to officials noted that eliminating the need for contracting officers to take additional steps to
review eligibility documentation for WOSB-program set-asides could create more review eligibility documentation for WOSB-program set-asides could create more
opportunities for WOSBs by reducing burdens on contracting officers.76 opportunities for WOSBs by reducing burdens on contracting officers.76
  Need for Additional Guidance.
13 of the 14 stakeholder groups discussed guidance available to federal contracting officers 13 of the 14 stakeholder groups discussed guidance available to federal contracting officers
under the WOSB program. For example, two third-party certifiers identified the need for under the WOSB program. For example, two third-party certifiers identified the need for
additional training and guidance for federal contracting officers, and staff from two federal additional training and guidance for federal contracting officers, and staff from two federal
contracting offices said that the last time that they had received training on the WOSB contracting offices said that the last time that they had received training on the WOSB
program was in 2011, when the program was first implemented.77 program was in 2011, when the program was first implemented.77
In a related development, during the 116th Congress, the House passed legislation (H.R. 190, the In a related development, during the 116th Congress, the House passed legislation (H.R. 190, the
Expanding Contracting Opportunities for Small Businesses Act of 2019) that would have, among Expanding Contracting Opportunities for Small Businesses Act of 2019) that would have, among
other provisions, eliminated the inclusion of option periods in the award price for sole source other provisions, eliminated the inclusion of option periods in the award price for sole source
contracts awarded to qualified HUBZone small businesses, SDBs, SDVOSBs, and WOSBs
(including EDWOSBs). This provision would have increased the number of contracts available
for sole source awards to these recipients because the option years would not count toward the

73 GAO-19-168, 73 GAO-19-168, WOSB: Ongoing Oversight Issues, p. 34. , p. 34.
74 GAO-19-168, 74 GAO-19-168, WOSB: Ongoing Oversight Issues, p. 31. , p. 31.
75 GAO-19-168, 75 GAO-19-168, WOSB: Ongoing Oversight Issues, p. 32. , p. 32.
76 GAO-19-168, 76 GAO-19-168, WOSB: Ongoing Oversight Issues, p. 33. , p. 33.
77 GAO-19-168, 77 GAO-19-168, WOSB: Ongoing Oversight Issues, p. 34. , p. 34.
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contracts awarded to qualified HUBZone small businesses, SDBs, SDVOSBs, and WOSBs (including EDWOSBs). This provision would have increased the number of contracts available for sole source awards to these recipients because the option years would not count toward the statutory caps on sole source awards (the WOSB caps are currently $7 million for manufacturing statutory caps on sole source awards (the WOSB caps are currently $7 million for manufacturing
contracts and $4.5 million for other contracts).78 contracts and $4.5 million for other contracts).78
Also, some WOSB advocates have suggested that the WOSB program should be amended to (1) Also, some WOSB advocates have suggested that the WOSB program should be amended to (1)
eliminate the distinction and disparate treatment of WOSBs and EDWOSBs when awarding eliminate the distinction and disparate treatment of WOSBs and EDWOSBs when awarding
contracts, and/or (2) allow set-asides and sole source awards to WOSBs (including EDWOSBs) contracts, and/or (2) allow set-asides and sole source awards to WOSBs (including EDWOSBs)
in all NAICS industry codes regardless of WOSB representation, as is the case for other small in all NAICS industry codes regardless of WOSB representation, as is the case for other small
business preference programs.79 Both legislative options could lead to an increase in the amount business preference programs.79 Both legislative options could lead to an increase in the amount
of contracts awarded to WOSBs. In the first instance, WOSBs would be eligible for set-asides and of contracts awarded to WOSBs. In the first instance, WOSBs would be eligible for set-asides and
sole source awards in both underrepresented and substantially underrepresented NAICS codes, sole source awards in both underrepresented and substantially underrepresented NAICS codes,
instead of just substantially underrepresented NAICS codes. In the latter instance, WOSBs and instead of just substantially underrepresented NAICS codes. In the latter instance, WOSBs and
EDWOSBs would be eligible for set-asides and sole source awards in all NAICS industry codes, EDWOSBs would be eligible for set-asides and sole source awards in all NAICS industry codes,
not just underrepresented or substantially underrepresented NAICS industry codes. not just underrepresented or substantially underrepresented NAICS industry codes.
As mentioned in the “A Targeted Approach to Avoid Legal Challenges” section, one of the As mentioned in the “A Targeted Approach to Avoid Legal Challenges” section, one of the
reasons the WOSB program provides disparate treatment to WOSBs and EDWOSBs, and makes reasons the WOSB program provides disparate treatment to WOSBs and EDWOSBs, and makes
distinctions among underrepresented, substantially underrepresented, and other NAICS industry distinctions among underrepresented, substantially underrepresented, and other NAICS industry
codes was to address the heightened level of legal scrutiny related to contracting preferences codes was to address the heightened level of legal scrutiny related to contracting preferences
following the Supreme Court’s decision in following the Supreme Court’s decision in Adarand Constructors, Inc. v. Pena. The Supreme . The Supreme
Court ruled that all racial classifications, whether imposed by federal, state, or local authorities, Court ruled that all racial classifications, whether imposed by federal, state, or local authorities,
must pass strict scrutiny review (i.e., they must serve a compelling government interest and must must pass strict scrutiny review (i.e., they must serve a compelling government interest and must
be narrowly tailored to further that interest). Although the WOSB program is not based on racial be narrowly tailored to further that interest). Although the WOSB program is not based on racial
classifications, it was expected to receive a heightened level of judicial scrutiny. As such, it lead classifications, it was expected to receive a heightened level of judicial scrutiny. As such, it lead
the WOSB program’s advocates to create these distinctions in an effort to shield it from legal the WOSB program’s advocates to create these distinctions in an effort to shield it from legal
challenges. challenges.
Concluding Observations
As mentioned in the As mentioned in the “Introduction, the WOSB program is one of several contracting programs the WOSB program is one of several contracting programs
that Congress has approved to provide greater opportunities for small businesses to win federal that Congress has approved to provide greater opportunities for small businesses to win federal
contracts. Its legislative history is a bit more complicated than others, primarily due to the contracts. Its legislative history is a bit more complicated than others, primarily due to the
distinctions between WOSBs and EDWOSBs and among underrepresented, substantially distinctions between WOSBs and EDWOSBs and among underrepresented, substantially
underrepresented, and other NAICS codes. These distinctions, and the SBA’s difficulty in underrepresented, and other NAICS codes. These distinctions, and the SBA’s difficulty in
defining them, led to the 10-year delay in the program’s implementation and may also help to defining them, led to the 10-year delay in the program’s implementation and may also help to
explain why the SBA’s implementation of the SBA’s certification program was delayed nearly explain why the SBA’s implementation of the SBA’s certification program was delayed nearly
six years. six years.
The SBA’s implementation of the WOSB program is likely to remain a priority for congressional The SBA’s implementation of the WOSB program is likely to remain a priority for congressional
oversight during the 117th Congress, as is federal agency use of the program. As mentioned, the oversight during the 117th Congress, as is federal agency use of the program. As mentioned, the
federal government has met the 5% procurement goal for WOSBs only twice (in FY2015 and federal government has met the 5% procurement goal for WOSBs only twice (in FY2015 and
FY2019) since the goal was authorized in 1994, and implemented in FY1996. FY2019) since the goal was authorized in 1994, and implemented in FY1996.
Also, the data on WOSB federal contract awards suggest that federal procurement officers are
using the WOSB program more often than in the past, but the program accounts for a relatively
small portion of WOSB contracts. Most of the federal contracts awarded to WOSBs are awarded

78 The sole source cap for manufacturing contracts is $6.5 million for WOSBs and SDVOSBs because their caps 78 The sole source cap for manufacturing contracts is $6.5 million for WOSBs and SDVOSBs because their caps
missed an inflation adjustment due to the dates on which these two programs were implemented. missed an inflation adjustment due to the dates on which these two programs were implemented.
79 For example, see Rachel N. Herrington, “Five Years In: A Review of the Women-Owned Small Business Federal 79 For example, see Rachel N. Herrington, “Five Years In: A Review of the Women-Owned Small Business Federal
Contracting Program,” Contracting Program,” Public Contract Law Journal, vol. 45, no. 2 (Winter 2016), pp. 359-382. , vol. 45, no. 2 (Winter 2016), pp. 359-382.
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Also, the data on WOSB federal contract awards suggest that federal procurement officers are using the WOSB program more often than in the past, but the program accounts for a relatively Congressional Research Service 22 SBA Women-Owned Small Business Federal Contracting Program small portion of WOSB contracts. Most of the federal contracts awarded to WOSBs are awarded in full and open competition with other firms or with another small business preference program in full and open competition with other firms or with another small business preference program
(such as the 8(a) and HUBZone programs). Relatively few federal contracts are awarded through (such as the 8(a) and HUBZone programs). Relatively few federal contracts are awarded through
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the WOSB program. Determining why this is the case, and if anything can, or should be done to the WOSB program. Determining why this is the case, and if anything can, or should be done to
address this, is likely to be of continuing congressional interest. address this, is likely to be of continuing congressional interest.

Author Information

Robert Jay Dilger Robert Jay Dilger

Senior Specialist in American National Government Senior Specialist in American National Government



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