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

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SBA Women-Owned Small Business Federal
~~August 5~~November 10, 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,implement its own WOSB certification process as required by P.L. 113-291, the Carl Levin and Howard P. “Buck” McKeon 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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SBA Women-Owned Small Business Federal Contracting Program

Introduction
The The ~~Small~~ Smal Business Administration’s (SBA’s) Women-Owned Business Administration’s (SBA’s) Women-Owned ~~Small~~ Smal Business (WOSB) Federal 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 greater opportunities for ~~small~~ smal businesses to win federal contracts. Congress’s interest in businesses to win federal contracts. Congress’s interest in
promoting promoting ~~small~~ smal business contracting dates back to World War II and the outbreak of fighting in business contracting dates back to World War II and the outbreak of fighting in
Korea. At that time, Congress found that thousands of Korea. At that time, Congress found that thousands of ~~small~~ smal business concerns were being 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 contracts or financial assistance.1 In 1953, concerned that many ~~small~~ smal businesses might fail 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 law, the ~~Small~~ Smal Business Act (P.L. 83-163). The act authorized the SBA. Business Act (P.L. 83-163). The act authorized the SBA.
The The ~~Small~~ Smal Business Act specifies that it is Congress’s declared policy to promote the interests of Business Act specifies that it is Congress’s declared policy to promote the interests of
~~small~~ smal businesses to “preserve free competitive enterprise.”2 Congress indicated that one of the 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~~ smal businesses received a “fair proportion” of federal contracts and subcontracts.3 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 procurement process to help ~~small~~ smal businesses receive a fair proportion of federal contracts and 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 evaluationprice evaluation adjustment/preference in unrestricted competitions—for adjustment/preference in unrestricted competitions—for ~~small~~ smal businesses.4 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 and subcontract dollars awarded to ~~small businesses generally~~smal businesses general y and to specific and to specific
types of types of ~~small~~ smal businesses, including at least 5% to WOSBs;5businesses, including at least 5% to WOSBs;5

~~1 U.S.~~ 1 U.S. Congress, Senate Select Committee on Small Business,Congress, Senate Select Committee on Small Business, Small Business Administration, committee print, 83rd , committee print, 83rd
Cong., 1st sess.,Cong., 1st sess., ~~August~~ August 10, 1953 (Washington, DC: GPO, 1953), p. iii. Also, see U.S.10, 1953 (Washington, DC: GPO, 1953), p. iii. Also, see U.S. Congress,Congress, House Committee onHouse Committee on
Banking and Currency, Banking and Currency, ~~Small~~Sm all 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 business83-494 (Washington, DC: GPO, 1953). For further information related to small business contracting, see CRScontracting, see CRS Report Report
R45576, R45576, An Overview of ~~Small~~Sm all Business Contracting , by Robert Jay Dilger. , by Robert Jay Dilger.
2 15 U.S.C. 2 15 U.S.C. §631(a); and P.L. 83-163, the Small Business§631(a); and P.L. 83-163, the Small Business Act of 1953 (as amended), see https://legcounsel.house.gov/Act of 1953 (as amended), see https://legcounsel.house.gov/
Comps/Small%20Business%20Act.pdf. Comps/Small%20Business%20Act.pdf.
3 U.S.3 U.S. Congress, HouseCongress, House Committee on Small Business,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, is a commonly used term to refer to a contract competition in which only small businesses, or specific types or specific types
of small businesses,of small businesses, may compete. Set-asides can bemay compete. Set-asides can be total or partial, depending on whether the entire procurement, or 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 awards are noncompetitive procurements that are made after soliciting and negotiating with only one are noncompetitive procurements that are made after soliciting and negotiating with only one
source. source.
A A price evaluation ~~adjustment~~adjustm ent/preference involves a reduction in the price of bids involves a reduction in the price of bids or offers by eligibleor offers by eligible parties (in this parties (in this
case for small businessescase for small businesses located in a Historically Underutilizedlocated in a Historically Underutilized ~~Business~~ Business Zone (HUBZone). Zone (HUBZone). ~~The~~T he reduction is generally 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 wouldto a $100,000 bid would result in the bidresult in the bid being reducedbeing reduced for comparative purposes by $10,000 to $90,000. $90,000 for comparative purposes by $10,000 to $90,000. $90,000
wouldwould then be usedthen be used in determining which bidin determining which bid or offer is lowestor offer is lowest priced or represents the “priced or represents the “ best value” for the best value” for the
government. “Best value” is determined basedgovernment. “Best value” is determined based on price and various nonprice evaluation factors selected by the federal on price and various nonprice evaluation factors selected by the federal
agency. For more information related to best value see 48 C.F.R.agency. For more information related to best value see 48 C.F.R. §15.304. §15.304.
~~5 The~~5 T he current government current government -wide small business-wide small business procurement goals are at least the following: 23% for all small procurement goals are at least the following: 23% for all small
businessesbusinesses (P.L. 100-656, the Business Opportunity Development Reform Act of 1988 (20%) and P.L. 105-135, the (P.L. 100-656, the Business Opportunity Development Reform Act of 1988 (20%) and P.L. 105-135, the
SmallSmall ~~Business~~ Business Reauthorization Act of 1997 (23%)); 5% for small disadvantagedReauthorization Act of 1997 (23%)); 5% for small disadvantaged ~~businesses (SDBs)~~ businesses (SDBs) (P.L. 100-656, the (P.L. 100-656, the
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SBA Women-Owned Small Business Federal Contracting Program

 an annual  an annual ~~Small~~ Smal Business Goaling Report to measure progress in meeting these 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 value greater than the simplified acquisition threshold exclusively for ~~small~~
smal 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 competition in which only ~~small~~ smal businesses, or specific types of businesses, or specific types of ~~small~~ smal businesses, businesses,
may compete; may compete;
 federal agencies to make  federal agencies to make sole source awards to awards to ~~small~~ smal businesses when the award 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 and ~~compelling~~compel ing circumstances); 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 to, specific types of ~~small~~ smal businesses (e.g., 8(a) Business Development businesses (e.g., 8(a) Business Development ~~small~~
smal businesses, businesses, ~~Historically Underutilized~~ Historical y Underutilized Business Zone (HUBZone)Business Zone (HUBZone) ~~small~~
smal businesses, WOSBs, and service-disabled veteran-owned businesses, WOSBs, and service-disabled veteran-owned ~~small~~ smal businesses businesses
(SDVOSBs));8 and(SDVOSBs));8 and

~~Business~~ Business Opportunity Development Reform Act of 1988); 5% to women-owned small businessesOpportunity Development Reform Act of 1988); 5% to women-owned small businesses (WOSBs)(WOSBs) (P.L. 103-(P.L. 103-
355, the Federal Acquisition Streamlining Act of 1994355, the Federal Acquisition Streamlining Act of 1994 ); 3% to small businesses); 3% to small businesses located in a HUBZone (P.L. 105-135, located in a HUBZone (P.L. 105-135,
the HUBZone Act of 1997—the HUBZone Act of 1997—~~Title~~T itle VI of the Small VI of the Small ~~Business~~ Business Reauthorization Act of 1997); and small businessesReauthorization Act of 1997); and small businesses owned owned
and controlled by a service-disabledand controlled by a service-disabled veteran (SDVOSBs)veteran (SDVOSBs) (P.L. 106-50, the Veterans Entrepreneurship and Small (P.L. 106-50, the Veterans Entrepreneurship and Small
BusinessBusiness Development Act of 1999). Development Act of 1999).
~~The~~T he federal government uses aspirational procurement goals instead of requiring federal government uses aspirational procurement goals instead of requiring ~~federal~~ federal agencies to awardagencies to award specific specific
percentages of federal contracts to various types of small businessespercentages of federal contracts to various types of small businesses primarily to avoid legalprimarily to avoid legal ~~challenges under~~ ch allenges under the equal the equal
protection component of the Fifth Amendment’s Due Process Clause.protection component of the Fifth Amendment’s Due Process Clause. See,See, for example, City of Richmond v. J.A. 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 federalInc. v. Pena 515 U.S. 200 (1995) (finding that all racial classifications, whether imposed by federal , state, or local , state, or local
authorities, must pass strict scrutiny review). authorities, must pass strict scrutiny review).
6 6 ~~The~~T he contracting officer must have a reasonable expectation that offers will be contracting officer must have a reasonable expectation that offers will be obtained from two or more responsible obtained from two or more responsible
small businessessmall businesses ~~(Rule of Two~~ (Rule of T wo) that are competitive in terms of market prices, quality, and delivery of the goods or ) that are competitive in terms of market prices, quality, and delivery of the goods or
services beingservices being purchased. Seepurchased. See P.L. 115-91, the National Defense Authorization Act for Fiscal Year 2018; 15 U.S.C. P.L. 115-91, the National Defense Authorization Act for Fiscal Year 2018; 15 U.S.C.
§644(j)(1); and Federal§644(j)(1); and Federal Acquisition Regulation (FAR) §19.Acquisition Regulation (FAR) §19.~~502~~50 2-2. -2.
7 See 7 See ~~FAR~~ FAR §19.203(c): §19.203(c):
For acquisitions For acquisitions of suppliesof supplies or services that have an anticipated dollar value exceeding the or services that have an anticipated dollar value exceeding the
simplified acquisitionsimplified acquisition threshold … the contracting officer shall first consider an acquisitionthreshold … the contracting officer shall first consider an acquisition for the for the
small businesssmall business ~~socioeconomic contracting~~ socioeconomic cont racting programs (i.e., 8(a), HUBZone, SDVOSB, programs (i.e., 8(a), HUBZone, SDVOSB, or WOSB or WOSB
programs) before considering a small businessprograms) before considering a small business set ~~set~~-aside (see FAR-aside (see FAR §19.502-2(b)). However, if a §19.502-2(b)). However, if a
requirement has been accepted by the Smallrequirement has been accepted by the Small ~~Business~~ Business Administration (SBA) under the 8(a) Administration (SBA) under the 8(a)
Program, it must remain in the 8(a) Program unless the SBAProgram, it must remain in the 8(a) Program unless the SBA ~~agrees~~ agrees to its release in accordance 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 Before setting aside an acquisition over the simplified acquisition threshold for small businesses,an acquisition over the simplified acquisition threshold for small businesses, ~~the~~ t he
contracting officer must have a reasonable expectation that offers will becontracting officer must have a reasonable expectation that offers will be obtained from two or more obtained from two or more
responsible small businessesresponsible small businesses (Rule of (Rule of ~~Two~~T wo) that are competitive in terms of market prices. See FAR ) that are competitive in terms of market prices. See FAR
§19.502-2. §19.502-2.
8 For Minority Small Business 8 For Minority Small Business and Capital Ownership Development Program (8(a) and Capital Ownership Development Program (8(a) ~~program~~pro gram) participants, see P.L. 95-) participants, see P.L. 95-
507, A bill507, A bill to amend the Small Businessto amend the Small Business Act and the SmallAct and the Small ~~Business~~ Business Investment Act of 1958 and 15 U.S.C. §637(a). 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 SmallFor HUBZone participants, see P.L. 105-135, the HUBZone Act of 1997—Title VI of the Small Business Business
Reauthorization Act of 1997, and 15 U.S.C. §657a. For WOSBs,Reauthorization Act of 1997, and 15 U.S.C. §657a. For WOSBs, ~~see~~ see H.R. 5654, the Small BusinessH.R. 5654, the Small Business Reauthorization Reauthorization
Act of 2000, incorporated by reference in P.L. 106-554, the Consolidated Appropriations Act, 2001, and 15 U.S.C. Act of 2000, incorporated by reference in P.L. 106-554, the Consolidated Appropriations Act, 2001, and 15 U.S.C.
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SBA Women-Owned Small Business Federal Contracting Program

 the SBA  the SBA and other federal procurement officers to review and restructure and other federal procurement officers to review and restructure
proposed procurements to maximize opportunities for proposed procurements to maximize opportunities for ~~small~~ smal business business
participation. participation.
Additional Additional requirements are in place to maximize requirements are in place to maximize ~~small~~ smal business participation as prime 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 reasonably ~~small~~ smal lots to permit offers on quantities less than the total lots to permit offers on quantities less than the total
requirement; requirement;
 plan acquisitions such that, if practicable, more than one  plan acquisitions such that, if practicable, more than one ~~small~~ smal business concern 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 SBAguaranteed by the SBA against loss under 15 U.S.C. §694b [against loss under 15 U.S.C. §694b [~~generally $6.5~~
~~million, or $10 million~~ general y $6.5 mil ion, or $10 mil ion if the contracting officer certifies that the higher amount if the contracting officer certifies that the higher amount
is necessary];9 is necessary];9
 encourage prime contractors to subcontract with  encourage prime contractors to subcontract with ~~small~~ smal business concerns, business concerns,
primarily through the agency’s role in negotiating an acceptable primarily through the agency’s role in negotiating an acceptable ~~small~~ smal business business
subcontracting plan with prime contractors on contracts anticipated to exceed subcontracting plan with prime contractors on contracts anticipated to exceed
$$~~700~~750,000 or $1.5 ,000 or $1.5 ~~million~~mil ion for construction contracts;10 and 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,§637(m). For SDVOSBs, see P.L. 108-183, the Veterans Benefits Act of 2003 and 15 U.S.C.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 9 For additional information and analysis concerning the Small ~~Business~~ Business Administration’s (SBA’s)Administration’s (SBA’s) Surety Bond Surety Bond
program, see CRSprogram, see CRS Report R42037, Report R42037, SBA Surety Bond Guarantee Program , by Robert Jay Dilger. , by Robert Jay Dilger.
10 Subcontracting plans are not required from small businesses, 10 Subcontracting plans are not required from small businesses, for personal services contracts, for contracts or contract 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 Any contractor receiving a ~~contract~~cont ract with a value greater than the simplified acquisition threshold with a value greater than the simplified acquisition threshold
must agree in the contract that small business,must agree in the contract that small business, veteran-owned small business,veteran-owned small business, service-disabled service-disabled
veteran-owned small business,veteran-owned small business, HUBZone small business,HUBZone small business, small disadvantagedsmall disadvantaged business,business, and and
women-ownedwomen-owned small businesssmall business concerns willconcerns will have the maximum practicable opportunity to 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 11 See ~~FAR~~ FAR §19.202-1 for the specified conditions: §19.202-1 for the specified conditions:
(i) (i) ~~The~~T he proposed acquisition is for supplies proposed acquisition is for supplies or services currently being provided by a small business or services currently being provided by a small business
and the proposed acquisition is of a quantity or estimated and the proposed acquisition is of a quantity or estimated ~~dollar~~do llar value, the magnitude of which value, the magnitude of which
makes it unlikely that small businessesmakes it unlikely that small businesses can compete for the prime contract; (ii) can compete for the prime contract; (ii) ~~The~~T he proposed 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 businessesand the magnitude of this consolidation makes it unlikely that small businesses can compete for the can compete for the
prime contract; or (iii) prime contract; or (iii) ~~The~~T he proposed acquisition is for a consolidated or bundled proposed acquisition is for a consolidated or bundled requirement.requirement.
See See ~~FAR~~ FAR §19.505 for a description of the appeals process. §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 the ~~Small~~ Smal Business Reauthorization Act of 2000, and incorporated by reference in P.L. 106-554, Business Reauthorization Act of 2000, and incorporated by reference in P.L. 106-554,
the Consolidated Appropriations Act, 2001.12the 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 Federal Acquisition Streamlining Act of 1994 (FASA)) by ~~allowing~~al owing federal contracting officers to 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 for bidding by WOSBs (including ~~economically~~economical y disadvantaged WOSBs disadvantaged WOSBs
(EDWOSBs)(EDWOSBs)) exclusively in industries in which WOSBs are exclusively in industries in which WOSBs are ~~substantially~~substantial y
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 (~~see~~see 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 relatively ~~small~~ smal portion of the total amount of contracts awarded to WOSBs. Most of the federal 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 another ~~small~~ smal business preference, such as an 8(a) or HUBZone program preference. Relatively 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.”14in 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 for Fiscal Year 2015 (NDAA 2015), enacted on December 19, 2014, prohibited ~~small~~ smal businesses businesses
from self-certifying WOSB eligibilityfrom self-certifying WOSB eligibility to ensure that the program’s contracts are awarded only to 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 language12 Legislative language authorizing the WOSBauthorizing the WOSB federal contracting program was initially in H.R. 4897, the Equity in 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,13 SBA, “Women-Owned Small“Women-Owned Small ~~Business~~ Business Federal Contract Program,” 75Federal Contract Program,” 75 Federal Register 62258-62292, October 7, 62258-62292, October 7,
2010. 2010.
14 For a discussion 14 For a discussion of the various methodological approaches considered, see SBA,of the various methodological approaches considered, see SBA, “Women“Women -Owned Small Business -Owned Small Business
FederalFederal Contract Program,” 75Contract Program,” 75 Federal Register 62259-62292, October 7, 2010. 62259-62292, October 7, 2010.
15 SBA,15 SBA, “Women-Owned Small“Women-Owned Small ~~Business~~ Business and Economically Disadvantaged Women-Owned Smalland Economically Disadvantaged Women-Owned Small Business 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-FY2020
($ in ($ in ~~billions~~bil ions) )
% 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
2020 2020
$27.272 $27.272
4.85% 4.85%
$1.259 $1.259
$1.085 $1.085
$0.107 $0.107
$0.056 $0.056
$0.011 $0.011
2019 2019
$25.300 $25.300
5.19% 5.19%
$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%
— —
— —
— —
— —
— —

~~16 SBA, “Women-Owned Small Business~~ 16 SBA, “ Women-Owned Small Business Federal Contracting program: Upcoming certification changes,” at 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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SBA Women-Owned Small Business Federal Contracting Program

% 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 1995
$3.621 $3.621
1.79% 1.79%
— —
— —
— —
— —
— —
Sources: White House (Clinton),: White House (Clinton), The State of ~~Small~~ Smal 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~~ Smal 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~~ Smal 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.uiug.30112048180589; White House (G.W. Bush), Bush), The State of ~~Small~~ Smal 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,Congress, House CommitteeHouse Committee ~~on Small~~ on Smal Business,Business, Subcommittee on Contracting and Technology,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, serialMarch 21, 2007, serial no. 110-9 (Washington, DC: GPO, 2007), pp. 4, 46 [FY2000]; U.S. Congress, House no. 110-9 (Washington, DC: GPO, 2007), pp. 4, 46 [FY2000]; U.S. Congress, House
CommitteeCommittee ~~on Small Business, Subcommittee~~ on Smal Business, Subcommittee on Regulatory Reformon Regulatory Reform and Oversight, and Oversight, SBA’s Procurement Assistance
Programs,, hearing, 109th Cong., 2nd sess.,hearing, 109th Cong., 2nd sess., March 30, 2006, serialMarch 30, 2006, serial no. 109-45 (Washington, DC: GPO, 2006), p. 31 no. 109-45 (Washington, DC: GPO, 2006), p. 31
[FY2001-FY2004]; U.S. General[FY2001-FY2004]; U.S. General ~~Services Administration~~ Services Administration (GSA), “Sam.Gov Data Bank, Static: (GSA), “Sam.Gov Data Bank, Static: ~~Small~~ Smal Business Business
Goaling Report [FY2005-FY2020], at https://sam.gov/reports/awards/static;Goaling Report [FY2005-FY2020], at https://sam.gov/reports/awards/static; GSA,GSA, “Federal Procurement“Federal Procurement Data Data
System—Next Generation,”System—Next Generation,” accessed on August 14, 2020 (WOSB and accessed on August 14, 2020 (WOSB and ~~economically~~ economical y disadvantaged WOSB disadvantaged WOSB
(EDWOSB) set-aside and sole(EDWOSB) set-aside and sole source awards, FY2011-FY2019); and data generated using GSA, “Sam.Govsource awards, FY2011-FY2019); and data generated using GSA, “Sam.Gov Data Data
Bank, Ad Hoc report,” August 2, 2021 [2020], at https://sam.gov/reports/awards/adhoc. Bank, Ad Hoc report,” August 2, 2021 [2020], at https://sam.gov/reports/awards/adhoc.
Notes: The : The ~~small~~ smal business eligiblebusiness eligible baseline excludes certain contracts that the U.S.baseline excludes certain contracts that the U.S. ~~Small~~ Smal Business Business
AdministrationAdministration (SBA) has determined(SBA) has determined ~~do not realistically~~ do not realistical y reflect the potential for reflect the potential for ~~small~~ smal business participation in business participation in
federal procurement (such as those awarded to mandatory and directed sources), contracts funded federal procurement (such as those awarded to mandatory and directed sources), contracts funded
predominatelypredominately from agency-generated sourcesfrom agency-generated sources (i.e.,(i.e., nonappropriated funds), contracts not covered by the nonappropriated funds), contracts not covered by the
FederalFederal Acquisition Regulations System,Acquisition Regulations System, acquisitions on behalf of foreign governments, and contracts not acquisitions on behalf of foreign governments, and contracts not
reported in the GSA’sreported in the GSA’s ~~Federal~~ Federal Procurement Data System—Next Generation (such as government procurement Procurement Data System—Next Generation (such as government procurement
card purchases and contracts valued less than $10,000). About 15% to 18% of card purchases and contracts valued less than $10,000). About 15% to 18% of ~~all~~ al federal contracts are excluded federal contracts are excluded
in any given fiscal year. In FY2019 and FY2020, in accordance with federal law, the SBA provided double credit, in any given fiscal year. In FY2019 and FY2020, in accordance with federal law, the SBA provided double credit,
for scorecard purposes only, for primefor scorecard purposes only, for prime contracts awarded in disaster areas that are awarded as a local set aside contracts awarded in disaster areas that are awarded as a local set aside
and a and a ~~small~~ smal business or other socioeconomicbusiness or other socioeconomic set aside when the vendor state is the same as the place of 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 businessesperformance (see 15 U.S.C. §644(f)) and for prime contracts awarded to businesses in Puerto Rico and covered in Puerto Rico and covered
territoriesterritories dated on or after August 13, 2018, and only for awards that do not already qualify for double credit dated on or after August 13, 2018, and only for awards that do not already qualify for double credit
under 15 U.S.C.under 15 U.S.C. §644(f) (see 15 U.S.C. §644(x)(1)). Without double credits,§644(f) (see 15 U.S.C. §644(x)(1)). Without double credits, women-owned women-owned ~~small~~ smal businesses businesses
receivedreceived 5.04% of 5.04% of ~~small~~ smal business eligiblebusiness eligible contracts in FY2019 and 4.71% in FY2020. contracts in FY2019 and 4.71% in FY2020.
The WOSB Program’s Origins
The following sections provide an overview of the history of The following sections provide an overview of the history of ~~small~~ smal business contracting business contracting
preferences, focusing on executive, legislative, and judicialpreferences, focusing on executive, legislative, and judicial actions that led to the creation of the 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 consultation with the SBA, “that ~~realistically~~realistical y reflect the potential of reflect the potential of ~~small~~ smal business concerns and business concerns and
~~small~~ smal business concerns owned and controlled by business concerns owned and controlled by ~~socially and economically~~social y and economical y disadvantaged disadvantaged
individuals”individuals” to participate in federal procurement. These reports are submitted to Congress and to participate in federal procurement. These reports are submitted to Congress and
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SBA Women-Owned Small Business Federal Contracting Program

are presently made available are presently made available to the public on the General Services Administration’s (GSA’s) to the public on the General Services Administration’s (GSA’s)
website. website. ~~Initially~~Initial y, WOSB goals were not included.17, 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
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 to the list of ~~small~~ smal business contracting goals it negotiated with federal agencies. At that time, business contracting goals it negotiated with federal agencies. At that time,
WOSBs received about 0.2% of WOSBs received about 0.2% of ~~all~~ al federal contracts.20 By 1988, this percentage had grown, but federal contracts.20 By 1988, this percentage had grown, but
to only 1% of to only 1% of ~~all~~ al federal contracts.21 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 subcontracts, as ~~well~~ wel as prime contracts, and added WOSBs to the list of as prime contracts, and added WOSBs to the list of ~~small~~ smal business concerns business concerns
to be identified in required to be identified in required ~~small~~ smal business subcontracting plans (at that time, business subcontracting plans (at that time, ~~small~~ smal business business
subcontracting plans were required for prime contracts exceeding $500,000, or $1 subcontracting plans were required for prime contracts exceeding $500,000, or $1 ~~million~~mil ion for the for the
construction of any public facility).23 construction of any public facility).23

17 P.L. 95-507, a bill to amend the Small Business17 P.L. 95-507, a bill to amend the Small Business Act and the SmallAct and the Small ~~Business~~ Business Investment Act of 1958; and 15 U.S.C. 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§644(g)(2). Also, see P.L. 112-239, the National Defense Authorization Act for Fiscal Year 2013 ; SBA, “; SBA, “ Small Small
BusinessBusiness Procurement Scorecard Overview,” at https://www.sba.gov/document/support-small-business-procurement-Procurement Scorecard Overview,” at https://www.sba.gov/document/support-small-business-procurement-
scorecard-overview; and General Servicesscorecard-overview; and General Services Administration (GSA),Administration (GSA), “ “Federal Procurement Data System—Next Federal Procurement Data System—Next
Generation: SmallGeneration: Small ~~Business Goaling~~ Business Goaling Reports (FY2005-2018),” at https://www.fpds.gov/fpdsng_cms/index.php/en/Reports (FY2005-2018),” at https://www.fpds.gov/fpdsng_cms/index.php/en/
reports.html. reports.html.
18 Executive Order (E.O.) 12138, “Creating a National Women’s Business 18 Executive Order (E.O.) 12138, “Creating a National Women’s Business Enterprise Policy and prescribing Enterprise Policy and prescribing
arrangements for developing, coordinating and implementing a national program for women’s businessarrangements for developing, coordinating and implementing a national program for women’s business enterprise ~~enterprise~~,” ,”
May 18, 1979, at https://www.archives.gov/federal-register/codification/executive-order/12138.html (hereinafter cited May 18, 1979, at https://www.archives.gov/federal-register/codification/executive-order/12138.html (hereinafter cited
as E.O. 12138, 1979). 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,commitment to providing small, small disadvantaged, and WOSBsand WOSBs the maximum practicable opportunity to participate the maximum practicable opportunity to participate
in federal contracting. President Clinton also issuedin federal contracting. President Clinton also issued E.O. E.O. ~~13157, “~~1 3157, “ Increasing Opportunities for Women-Owned Small Increasing Opportunities for Women-Owned Small
Businesses,”Businesses,” on May 23, 2000, to reaffirm the executive branch’s commitment to meet or exceed the 5% procurement on May 23, 2000, to reaffirm the executive branch’s commitment to meet or exceed the 5% procurement
goal for WOSBs.goal for WOSBs. ~~See~~ See Executive Office of the President, “Executive Office of the President, “ Continued Commitment to Small, SmallContinued Commitment to Small, Small Disadvantaged, and Disadvantaged, and
SmallSmall Women-Owned BusinessesWomen-Owned Businesses in Federalin Federal Procurement ~~Procurement~~,” 59 ,” 59 Federal Register 52397, October 17, 1994; and E.O. 52397, October 17, 1994; and E.O.
13157, “Increasing Opportunities for Women-Owned Small13157, “Increasing Opportunities for Women-Owned Small Businesses,”Businesses,” 6565 Federal Register 34035-34037, May 25, 34035-34037, May 25,
2000. 2000.
20 U.S. 20 U.S. Government Accountability Office (GAO), Government Accountability Office (GAO), Federal Procurement: Trends and Challenges in Contracting with
~~Women-Owned Small~~Wom en-Owned Sm all 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~~Procurem ent: Trends and Challenges in Contracting with ~~WOSBs~~WOS Bs). ).
21 GAO-01-346, 21 GAO-01-346, Federal Procurement: Trends and Challenges in Contracting with WOSBs. .
22 U.S.22 U.S. Congress, HouseCongress, House Committee on Small Business,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. 100accompany H.R. 5050, 100th Cong., 2nd sess., September 22, 1988, H.Rept. 100 -955 (Washington: GPO, 1988), pp. 6-9 -955 (Washington: GPO, 1988), pp. 6-9
(hereinafter U.S. Congress,(hereinafter U.S. Congress, House Committee on Small Business,House Committee on Small Business, ~~Women~~ Wom en’s Business Ownership Act of 1988 ). ).
23 U.S. 23 U.S. Congress, HouseCongress, House Committee on Small Business,Committee on Small Business, Women’s Business Ownership Act of 1988, p. 8. , p. 8.
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Government-Wide Small Business Procurement Goals
In a related development, P.L. 100-656, the Business Opportunity Development Reform Act of In a related development, P.L. 100-656, the Business Opportunity Development Reform Act of
1988, authorized the President to 1988, authorized the President to ~~annually~~annual y establish government-wide minimum procurement establish government-wide minimum procurement
goals for goals for ~~small~~ smal businesses and businesses and ~~small~~ smal businesses owned and controlled by businesses owned and controlled by ~~socially and~~
~~economically~~social y and economical y disadvantaged individuals (SDBs). Congress required the government-wide disadvantaged individuals (SDBs). Congress required the government-wide
minimum goal for minimum goal for ~~small~~ smal businesses to be “not less than 20% [increased to 23% in 1997] of the businesses to be “not less than 20% [increased to 23% in 1997] of the
total value of total value of ~~all~~ al prime contract awards for each fiscal year” and “not less than 5% of the total prime contract awards for each fiscal year” and “not less than 5% of the total
value of value of ~~all~~ al prime contract and subcontract awards for each fiscal year” for SDBs.24 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 FY1996.26implemented 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 establish a target that ~~will~~ wil result in greater opportunities for women to compete for federal 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 Subsequently, 3% procurement goals were created for HUBZone ~~small~~ smal businesses (P.L. 105-135, businesses (P.L. 105-135,
the HUBZonethe HUBZone Act of 1997; Title VI of the Act of 1997; Title VI of the ~~Small~~ Smal Business Reauthorization Act of 1997) and Business Reauthorization Act of 1997) and
SDVOSBs (P.L. 106-50, the Veterans Entrepreneurship and SDVOSBs (P.L. 106-50, the Veterans Entrepreneurship and ~~Small~~ Smal Business Development Act of Business Development Act of
1999).29 1999).29
Figure 1 shows the percentage of shows the percentage of ~~small~~ smal business-eligible federal contracts awarded to business-eligible federal contracts awarded to ~~small~~
smal businesses, SDBs, WOSBs, SDVOSBs, and HUBZone businesses, SDBs, WOSBs, SDVOSBs, and HUBZone ~~small~~ smal businesses from FY2005 through businesses from FY2005 through
FY2020. As detailed in the figure’s notes, the FY2020. As detailed in the figure’s notes, the ~~small~~ smal business-eligible baseline excludes certain business-eligible baseline excludes certain
contracts that the SBA has determined do not contracts that the SBA has determined do not ~~realistically~~ realistical y reflect the potential for reflect the potential for ~~small~~ smal business business
participation in federal procurement. About 15% to 18% of participation in federal procurement. About 15% to 18% of ~~all~~ al federal contracts are excluded in federal contracts are excluded in
any given fiscal year.any given fiscal year.
The federal government has had difficulty meeting the WOSB and HUBZone The federal government has had difficulty meeting the WOSB and HUBZone ~~small~~ smal business business
procurement goals. The 5% procurement goal for WOSBs was achieved in only 2 of the 16 fiscal procurement goals. The 5% procurement goal for WOSBs was achieved in only 2 of the 16 fiscal

Presently, contractors that are not considered small must submitPresently, contractors that are not considered small must submit an acceptable small businessan acceptable small business subcontracting plan on subcontracting plan on
contracts anticipated to exceed $contracts anticipated to exceed $~~700~~750,000, or $1.5 million for construction contracts. See 15 U.S.C.,000, or $1.5 million for construction contracts. See 15 U.S.C. §633(h)(1). For §633(h)(1). For
additional information on subcontracting plan requirements, see FAR §19.702(a)(1); and 15 U.S.C.additional information on subcontracting plan requirements, see FAR §19.702(a)(1); and 15 U.S.C. §637(d)(3). §637(d)(3).
24 P.L. 100-656, the Business Opportunity Development Reform Act of 1988 24 P.L. 100-656, the Business Opportunity Development Reform Act of 1988 , 15 U.S.C. §644(g)(1). , 15 U.S.C. §644(g)(1). ~~The~~T he government- government-
widewide procurement goal for small businessesprocurement goal for small businesses ~~was increased~~ was increased from 20% to 23% byfrom 20% to 23% by P.L. 105-135, the Small Business 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.27 U.S. Congress, Committee of Conference, Congress, Committee of Conference, Federal Acquisition Streamlining Act of 1994, conference report to , conference report to
accompany S. 1587, 103rd Cong., 2nd sess., Augustaccompany S. 1587, 103rd Cong., 2nd sess., August 21, 1994, H.Rept. 103-712 (Washington, DC: GPO, 1994), p. 224 21, 1994, H.Rept. 103-712 (Washington, DC: GPO, 1994), p. 224
(hereinafter cited as Committee of Conference, Federal Acquisition Streamlining Act(hereinafter cited as Committee of Conference, Federal Acquisition Streamlining Act of 1994). 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 29 ~~This~~T his goal was goal was phased in, with an initial goal of 1% (effective in 1999) that rose by half a percentage point each year 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. to its final level in 2003. ~~The~~T he goal was goal was later modified to includelater modified to include subcontract awardssubcontract awards (P.L. 112-239, the National (P.L. 112-239, the National
Defense Authorization Act for Fiscal Year 2013Defense Authorization Act for Fiscal Year 2013 ). ).
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years (FY2015 and FY2019) reported in the figure. The 3% procurement goal for HUBZone years (FY2015 and FY2019) reported in the figure. The 3% procurement goal for HUBZone
~~small~~ smal businesses was not achieved in any of the 16 fiscal years. In contrast, the 23% procurement businesses was not achieved in any of the 16 fiscal years. In contrast, the 23% procurement
goal for goal for ~~all~~ al types of types of ~~small~~ smal businesses was achieved in 9 of the 16 fiscal years reported in the 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 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 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 SDVOSBs was achieved in 9 of the 16 fiscal years (FY2012-FY2020), including the last 9 fiscal
years. years.
Figure 1. Small Business Contracting, Performance, by Type of Small Business,
FY2005-FY2020
(percentage of (percentage of ~~small~~ smal business eligible federal contracts) business eligible federal contracts)

Source: U.S. GeneralU.S. General ~~Services Administration~~ Services Administration (GSA), “Sam.Gov Data Bank, Static: (GSA), “Sam.Gov Data Bank, Static: ~~Small Business~~ Smal Business Goaling Goaling
Report [FY2005-FY2020], at https://sam.gov/reports/awards/static;Report [FY2005-FY2020], at https://sam.gov/reports/awards/static; and U.S. and U.S. ~~Small~~ Smal Business Administration, Business Administration,
“Government-Wide“Government-Wide Performance:Performance: FY2020 FY2020 ~~Small~~ Smal Business ProcurementBusiness Procurement Scorecard,” data as of April 15, 2021, at Scorecard,” data as of April 15, 2021, at
https://www.sba.gov/document/support-https://www.sba.gov/document/support-~~small~~smal -business-procurement-scorecard-overview. -business-procurement-scorecard-overview.
Notes: The The ~~small~~ smal business eligiblebusiness eligible baseline excludes certain contracts that the baseline excludes certain contracts that the ~~Small~~ Smal Business AdministrationBusiness Administration has has
determineddetermined ~~do not realistically reflect~~ do not realistical y reflect the potential for the potential for ~~small~~ smal business participation in federalbusiness participation in federal procurement (such procurement (such
as those awarded to mandatory and directed sources),as those awarded to mandatory and directed sources), contracts funded predominately fromcontracts funded predominately from ~~agency~~ agen cy-generated -generated
sources (i.e.,sources (i.e., nonappropriated funds), contracts not covered by the Federal Acquisition Regulations System, nonappropriated funds), contracts not covered by the Federal Acquisition Regulations System,
acquisitions on behalf of foreign governments, and contracts not reported in the GSA’sacquisitions on behalf of foreign governments, and contracts not reported in the GSA’s ~~Federal~~ Federal Procurement 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 than $10,000). About 15% to 18% of ~~all~~ al federal contracts are excluded in any given fiscal year. federal contracts are excluded in any given fiscal year.
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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
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 competition in which only ~~small~~ smal businesses, or specific types of businesses, or specific types of ~~small~~ smal businesses, may compete. businesses, may compete.
WOSB advocates noted that other WOSB advocates noted that other ~~small~~ smal businesses were provided contracting preferences. For businesses were provided contracting preferences. For
example, at that time, SDBs were eligibleexample, at that time, SDBs were eligible for contract set-asides and a price evaluation 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 Department of Defense (DOD); participants in the SBA’s 8(a) program were (and ~~still~~ stil are) are)
eligibleeligible for both contract set-asides and sole source awards; and HUBZone for both contract set-asides and sole source awards; and HUBZone ~~small~~ smal businesses were businesses were
(and (and ~~still~~ stil are) eligibleare) eligible for contract set-asides, sole source awards, and a price evaluation for contract set-asides, sole source awards, and a price evaluation
adjustment of up to 10% in full and open competition above the simplifiedadjustment of up to 10% in full and open competition above the simplified acquisition 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~~
~~agreement on several suggestions for improving the environment for contracting with~~
~~WOSBs and increasing federal contracting with WOSBs. They suggested creating a~~
Among the government contracting officials with whom we spoke, there was general agreement on several suggestions for improving the environment for contracting with 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
outreachoutreach activities,activities, promoting contractingpromoting contracting ~~with WOSBs~~ with WOSBs through agency incentivethrough agency incentive and and
recognition programs, including WOSBs in agency mentor-protégé programs, providing recognition programs, including WOSBs in agency 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

30 Several statutes at that time contained provisions to encourage contracting with SDBs,30 Several statutes at that time contained provisions to encourage contracting with SDBs, ~~including~~ including P.L. 99-591 P.L. 99-591
(originally), Making continuing appropriations for the fiscal year 1987, and for other purposes ((originally), Making continuing appropriations for the fiscal year 1987, and for other purposes (~~Title~~T itle X, the Defense X, the Defense
Acquisition Improvement Act of 1986); P.L. 99-661, the National Defense Authorization Act for Fiscal Year 1987Acquisition 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 2001P.L. 106-398, Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 ; and P.L. 103-355, FASA. ; and P.L. 103-355, FASA.
Between 1987 and 1995, SDBsBetween 1987 and 1995, SDBs were eligiblewere eligible to receive a 10% price evaluation preference in competitive Department to receive a 10% price evaluation preference in competitive Department
of Defense (DOD) acquisitions and couldof Defense (DOD) acquisitions and could compete for contracts set aside for SDBscompete for contracts set aside for SDBs for certain DOD acquisitionsfor certain DOD acquisitions where where
agency officials believedagency officials believed there wasthere was a reasonable a reasonable ~~expectation~~expectatio n that offers would be received from at least two responsible that offers would be received from at least two responsible
SDBs.SDBs. ~~FASA~~ FASA extended the authority to implement these benefits to all federal agencies,extended the authority to implement these benefits to all federal agencies, but in 1995, the Supreme Court but in 1995, the Supreme Court
ruledruled in Adarandin Adarand Constructors, Inc.v. Pena (1995) “that all racial classifications, whether imposed by federal, state, or 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 SDBlight of the Adarand decision, regulations to implement FASA’s provision to expand SDB program preferences to other program preferences to other
federal agenciesfederal agencies were delayed.were delayed. Statutory authority for SDB price evaluation adjustments expired on December 9, 2004, Statutory authority for SDB price evaluation adjustments expired on December 9, 2004,
for most federal procuring agencies,for most federal procuring agencies, and at the end of 2009 for DOD, the National Aeronautics and Space and at the end of 2009 for DOD, the National Aeronautics and Space
Administration, and the Coast Guard.Administration, and the Coast Guard. ~~See~~ See Adarand Constructors, Inc., v. Pena, Oyez, at https://www.oyez.org/cases/Adarand Constructors, Inc., v. Pena, Oyez, at https://www.oyez.org/cases/
1994/93-1841; GAO, 1994/93-1841; GAO, ~~Small~~Sm all Business: Status of ~~Small~~Sm all 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; and19, 2001, pp. 3-6, at https://www.gao.gov/new.items/d01273.pdf; and SBA,SBA, “ “Small DisadvantagedSmall Disadvantaged Program,” 73Program,” 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 By the time the GAO report was published, legislation had been enacted (H.R. 5654, the ~~Small~~
Smal Business Reauthorization Act of 2000, incorporated by reference in P.L. 106-554, the 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 Consolidated Appropriations Act, 2001) to authorize the WOSB program. As mentioned, the
WOSB program provides greater access to federal contracting opportunities for WOSBs by WOSB program provides greater access to federal contracting opportunities for WOSBs by
providing federal contracting officers authority to set aside contracts for WOSBs (including providing federal contracting officers authority to set aside contracts for WOSBs (including
EDWOSBs) exclusively in industries in which WOSBs are EDWOSBs) exclusively in industries in which WOSBs are ~~substantially~~substantial y underrepresented, and to 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 decisions on legal ~~challenges~~chal enges of contracting preferences for minority contractors, including 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 (1995) (finding that ~~all~~ al racial racial
classifications, whether imposed by federal, state, or local authorities, must pass classifications, whether imposed by federal, state, or local authorities, must pass ~~strict~~stric t scrutiny scrutiny
review).review).
The The Adarand Constructors, Inc. v. Pena case involved a case involved a ~~challenge~~chal enge to federal subcontracting 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 ruled that ~~all~~ al racial classifications, whether imposed by federal, state, or local authorities, must racial classifications, whether imposed by federal, state, or local authorities, must
pass strict scrutiny review (i.e., they must serve a pass strict scrutiny review (i.e., they must serve a ~~compelling~~compel ing government interest and must be 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 When developing the WOSB set-aside program, its advocates were aware that the WOSB 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 ruling that ~~all~~ al racial classifications must serve a racial classifications must serve a ~~compelling~~compel ing government interest and be narrowly 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 of 2000 (which was incorporated into H.R. 5654, the ~~Small~~ Smal Business Reauthorization Act of Business Reauthorization Act of
2000), advocates argued that a set aside program was needed (2000), advocates argued that a set aside program was needed (~~compelling~~compel ing interest) because of the 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 for efficiency in procurement often places ~~Congressionally~~Congressional y-mandated contracting goals for -mandated contracting goals for ~~small~~
smal businesses in general, and women-owned businesses in general, and women-owned ~~small~~ smal businesses in particular, in jeopardy.”32 The report businesses in particular, in jeopardy.”32 The report
also noted that also noted that contract bundling (the consolidation of (the consolidation of ~~smaller~~smal er contract requirements into larger 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 ..government procurements ... [but] also may perpetuate the use of [but] also may perpetuate the use of ~~well~~wel -known firms that are not -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,Order [Executive Order 13,157, issued on May 23, 2000 by President Clinton, reaffirming 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

~~32 U.S. Congress, House~~ 32 U.S. Congress, House Committee on Small Business,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~~Wom en 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.
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identify WOSBs identify WOSBs ~~and establish competition among those businesses for the provision~~ and establish competition among those businesses for the provision of of
goods and services.34goods and services.34
The House report also argued that the The House report also argued that the ~~bill~~ bil was narrowly tailored because it did not establish sole was narrowly tailored because it did not establish sole
source authority for WOSBs and limited WOSB set-asides to industries in which WOSBs are source authority for WOSBs and limited WOSB set-asides to industries in which WOSBs are
underrepresented in obtaining federal contracts.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 the anticipated award price of the contract (including options) does not exceed $5 ~~million~~mil ion for for
manufacturing contracts and $3 manufacturing contracts and $3 ~~million for all~~ mil ion for al other contracts, and (3) the contract award can be 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 In 2011, the set-aside award caps were increased to $6.5 ~~million~~mil ion for manufacturing contracts and for manufacturing contracts and
$4 $4 ~~million for all~~ mil ion for al other contracts to account for inflation.35 In 2013, P.L. 112-239, the National 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.36Defense 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, WOSBs are underrepresented (and, by inference, ~~substantially~~substantial y underrepresented) with respect to 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  be a ~~small~~ smal business (as defined by the SBA); business (as defined by the SBA);
 be at least 51%  be at least 51% ~~unconditionally~~unconditional y and directly owned and controlled by one or 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 certifying entity approved by the SBA or self-certify their eligibility to the federal 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.

34 Committee on Small Business,34 Committee on Small Business, Equity in Contracting For Women Act of 2000 report, p. 3. , p. 3.
35 Department of Defense, GSA,35 Department of Defense, GSA, National Aeronautics and SpaceNational Aeronautics and Space Administration, “Federal Acquisition Regulation; Administration, “Federal Acquisition Regulation;
Women-Owned SmallWomen-Owned Small ~~Business~~ Business (WOSB) Program,” 76 (WOSB) Program,” 76 Federal Register 18305, April 1, 2011; and SBA,18305, April 1, 2011; and SBA, ~~“Women-~~
~~Owned Small Business Federal~~ “ Women -Owned Small Business Federal Contract Program,” 77Contract Program,” 77 Federal Register 1857, January 12, 2012. 1857, January 12, 2012.
36 SBA,36 SBA, “Women-Owned Small“Women-Owned Small ~~Business~~ Business Federal Contracting Program,” 78Federal Contracting Program,” 78 Federal Register 26504-26506, May 7, 26504-26506, May 7,
2013. 2013.
37 37 ~~The~~T he statute specifies that ownership is to be determined without regard to community property laws. 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 As mentioned, P.L. 113-291 (NDAA 2015), among other provisions, removed the ability of ~~small~~
smal businesses to self-certify their eligibilitybusinesses to self-certify their eligibility for the WOSB program as a means to ensure that the 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 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 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 that it would implement its own certification process for the WOSB program and remove the
abilityability ~~of small~~ of smal businesses to self-certify their eligibilitybusinesses to self-certify their eligibility for the WOSB program on October 15, 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 information ~~annually~~ annual y through the SBA’s certification web page (certify.SBA.gov) and have an 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 that the business is ~~small~~ smal and is interested in participating in the WOSB program.39 Self-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~~typical y involving a fee): El Paso Hispanic Chamber of Commerce, National Women Business 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 WOSBs and EDWOSBS that are not certified are no longer eligible to participate in the WOSB to participate in the WOSB
program. Other women-owned program. Other women-owned ~~small~~ smal businesses may continue to self-certify their status as a 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

~~38 SBA,~~ 38 SBA, “Women-Owned Small“Women-Owned Small ~~Business~~ Business and Economically Disadvantaged Women-Owned Smalland Economically Disadvantaged Women-Owned Small Business Business
Certification,” 85Certification,” 85 Federal Register 27650, May 11, 2020. 27650, May 11, 2020.
39 With a few39 With a few exceptions, businessesexceptions, businesses interested in biddinginterested in bidding on a federal contract must obtain a Dun & Bradstreet Data on a federal contract must obtain a Dun & Bradstreet Data
Universal NumberingUniversal Numbering System (DUNS) numberSystem (DUNS) number (i.e., a unique(i.e., a unique nine-digit identification number) for each of the nine-digit identification number) for each of the
business’sbusiness’s physical locations, and register with the federal government’s System for Awardphysical locations, and register with the federal government’s System for Award Management (SAMManagement (SAM ). ).
Government agencies use SAMGovernment agencies use SAM for several purposes, includingfor several purposes, including to find contractors. Businesses also must match their to find contractors. Businesses also must match their
products and services to a North American Industry Classification System (NAICS)products and services to a North American Industry Classification System (NAICS) code. Businessescode. Businesses generally have a generally have a
primary NAICSprimary NAICS code and may have multiple NAICScode and may have multiple NAICS ~~codes~~ codes if they sell multiple products and services. Businessesif they sell multiple products and services. Businesses that that
identify themselves as a small businessidentify themselves as a small business in SAMin SAM must (1) meet the Small Businessmust (1) meet the Small Business Act’s definition of a small business Act’s definition of a small business
and (2) not exceed sizeand (2) not exceed size standards established, and updatedstandards established, and updated periodically, by the SBA.periodically, by the SBA. ~~See SBA, “~~ See SBA, “ Federal Contracting Federal Contracting
Guide:Guide: ~~Basic~~ Basic Requirements,” at https://www.sba.gov/federal-contracting/contracting-guide/basic-requirements; and Requirements,” at https://www.sba.gov/federal-contracting/contracting-guide/basic-requirements; and
U.S.U.S. ~~Bureau~~ Bureau of the Census,of the Census, “ “North American Industry Classification System,” at https://www.census.gov/eos/www/North American Industry Classification System,” at https://www.census.gov/eos/www/
naics/. For additional information and analysis, see CRSnaics/. For additional information and analysis, see CRS Report R44490, Report R44490, Unique Identification Codes for Federal
Contractors: DUNS ~~Numbers~~Num bers and CAGE Codes, by L. Elaine Halchin; CRS, by L. Elaine Halchin; CRS Report RS22536, Report RS22536, Overview of the Federal
~~Procurement~~Procurem ent Process and Resources, by L. Elaine Halchin; and CRS, by L. Elaine Halchin; and CRS Report R45576, Report R45576, An Overview of ~~Small~~Sm all Business
Contracting, by Robert Jay Dilger. , by Robert Jay Dilger.
40 SBA,40 SBA, “ “Women-Owned SmallWomen-Owned Small ~~Business~~ Business Federal Contracting program: Get certified as a women-owned small Federal Contracting program: Get certified as a women-owned small
business,”business,” at https://www.sba.gov/federal-contracting/contracting-assistance-programs/women-owned-small-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~~Wom en-Owned Sm all Business Program : Actions Needed to Address
Continued Oversight Issues, GAO-19-563T, GAO-19-563T , May 16, 2019, p. 3, at https://www.gao.gov/products/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, 41 SBA, “Women-Owned Small“Women-Owned Small ~~Business~~ Business and Economically Disadvantaged Womenand Economically Disadvantaged Women -Owned Small-Owned Small Business Business
Certification,” 85Certification,” 85 Federal Register 27650, May 11, 2020. 27650, May 11, 2020.
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Defining Economic Disadvantage
EDWOSBs must meet EDWOSBs must meet ~~all~~ al WOSB contracting program requirements and be WOSB contracting program requirements and be ~~economically~~
economical y disadvantaged, which, as presently defined by the SBA, means that they must be 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  owned and controlled by one or more women, each with a personal net worth less
than $750,000; than $750,000;
 owned and controlled by one or more women, each with $350,000 or less in  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 adjusted gross income averaged over the previous three years; and
 owned and controlled by one or more women, each with $6  owned and controlled by one or more women, each with $6 ~~million~~mil ion or less in or less in
personal assets. personal assets.
The SBA The SBA defined economic disadvantage using its experience with the 8(a) program as a guide 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 ~~August 5~~November 9, 2021, there were 2,, 2021, there were 2,~~461~~983 certified WOSBs and 1, certified WOSBs and 1,~~441~~552 certified EDWOSBs certified EDWOSBs
registered in the SBA’s online database.43 There were registered in the SBA’s online database.43 There were ~~77,217~~74,845 self-certified WOSBs and WOSB self-certified WOSBs and WOSB
joint ventures and joint ventures and ~~32,564~~31,974 self-certified EDWOSBs and EDWOSB joint ventures registered in the self-certified EDWOSBs and EDWOSB joint ventures registered in the
SBA’s online database on that date.44 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, industries in which WOSBs are underrepresented (and, by inference, ~~substantially~~
substantial y underrepresented) with respect to federal procurement contracting.”45underrepresented) with respect to federal procurement contracting.”45
The SBA completed a draft of the legislatively The SBA completed a draft of the legislatively mandated study of underrepresented (and, by mandated study of underrepresented (and, by
inference, inference, ~~substantially~~substantial y underrepresented) NAICS industrial codes in September 2001, using 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 program to the Office of Management and Budget (OMB), which is required by law to review ~~all~~
al 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

~~42 SBA, “The~~ 42 SBA, “T he Women-Owned Small Business Women-Owned Small Business ~~Federal~~ Federal Contract Assistance Program,” 71Contract Assistance Program,” 71 Federal Register 34551, June 34551, June
15, 2006; and SBA,15, 2006; and SBA, “ “Women-Owned SmallWomen-Owned Small ~~Business Federal~~ Business Federal Contract Program,” 75 Contract Program,” 75 Federal Register 62265, October 62265, October
7, 2010. 7, 2010.
43 SBA,43 SBA, “ “Dynamic Small BusinessDynamic Small Business Search,” accessedSearch,” accessed ~~on August 5~~ on November 9, 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, 44 SBA, “Dynamic Small Business“Dynamic Small Business Search,” accessedSearch,” accessed ~~on August 5~~ on November 9, 2021, at, 2021, at https://web.sba.gov/pro-net/search/https://web.sba.gov/pro-net/search/
dsp_dsbs.cfm. dsp_dsbs.cfm.
45 For a discussion45 For a discussion of the various methodological approaches considered, see SBA,of the various methodological approaches considered, see SBA, “ “Women-Owned Small Business Women-Owned Small Business
FederalFederal Contract Program,” 75 Contract Program,” 75 Federal Register, October 7, 2010, pp. 62259-62262. , October 7, 2010, pp. 62259-62262.
46 SBA,46 SBA, “ “Women-Owned SmallWomen-Owned Small ~~Business~~ Business Federal Contract Program,” 75 Federal Contract Program,” 75 Federal Register 62259, October 7, 2010. 62259, October 7, 2010.
~~The~~T he North American Industry Classification System (NAICS, North American Industry Classification System (NAICS, pronounced Nakes) waspronounced Nakes) was developed developed
under the under the ~~direction~~direct ion and guidance and guidance of the Office of Management and Budgetof the Office of Management and Budget (OMB) as the standard (OMB) as the standard
for usefor use by Federal statistical agencies in classifying businessby Federal statistical agencies in classifying business establishments for the collection, establishments for the collection,
tabulation, presentation, and analysis of statistical data describingtabulation, presentation, and analysis of statistical data describing the U.S.the U.S. economy. ... NAICSeconomy. ... NAICS is a is a
2- through 6-digit hierarchical classification system, offering five levels of detail. Each digit2- through 6-digit hierarchical classification system, offering five levels of detail. Each digit in the in the
code is part of a series of progressively narrower categories, and the more digitscode is part of a series of progressively narrower categories, and the more digits in the code signify in the code signify
greater classification detail. greater classification detail. ~~The~~T he first two digits first two digits designate the economic sector, the third digit designate the economic sector, the third digit
designatesdesignates the subsector, the fourth digit designates the industry group, the fifth digit designates the the subsector, the fourth digit designates the industry group, the fifth digit designates the
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SBA withdrew the regulations on April SBA withdrew the regulations on April 24, 2002, before the review was complete “because the 24, 2002, before the review was complete “because the
SBASBA Administrator had concerns about the content and constitutionality of its draft industry study 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 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 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.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 SBAreport indicated that the SBA asked NAS to conduct the review “because of the history of legal asked NAS to conduct the review “because of the history of legal
~~challenges~~ chal enges to race- and gender-conscious contracting programs at the federal and local levels.”48 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 SBANAS’s analysis as indicating that the SBA study was “study was “~~fatally~~fatal y flawed.”50 In response to that 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 2007.51Entrepreneurship Public Policy (RAND). The RAND study was published in April 2007.51
The RAND report noted that underrepresentation is The RAND report noted that underrepresentation is ~~typically~~typical y referred to as a disparity ratio, a 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 availabilityNAICS code to their availability for such contracts in that NAICS code. A disparity of 1.0 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

~~NAICS~~ NAICS industry, and the sixth digit designates the national industry. industry, and the sixth digit designates the national industry.
See See ~~U.S. Census Bureau, “~~ U.S. Census Bureau, “ North American Industry Classification System,” at https://www.census.gov/eos/www/naics/North American Industry Classification System,” at https://www.census.gov/eos/www/naics/
faqs/faqs.html#q5. faqs/faqs.html#q5.
47 SBA, 47 SBA, “Semiannual Regulatory Agenda,”“Semiannual Regulatory Agenda,” 6767 Federal Register 34004, May 13, 2002; and 34004, May 13, 2002; and U.S. Women’s Chamber of
~~Commerce v. U.S. Small Business Administration~~Com m erce v. U.S. Sm all Business Adm inistration, November 30, 2005, at https://casetext.com/case/us-womens-, 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,48 National Research Council, National Academy of SciencesNational Academy of Sciences (NAS),(NAS), Analyzing Information on Women-Owned Small
Businesses in Federal Contracting, Steering Committee for the Workshop on Women-Owned Small, Steering Committee for the Workshop on Women-Owned Small ~~Businesses~~ Businesses in in
FederalFederal Contracting, Committee on National Statistics, Division of Behavioral and SocialContracting, Committee on National Statistics, Division of Behavioral and Social ~~Sciences~~ Sciences and Education and Education
(Washington, DC: (Washington, DC: ~~The~~T he National Academies Press, 2005), p. 1, at National Academies Press, 2005), p. 1, at https://www.nap.edu/catalog/11245/analyzing-https://www.nap.edu/catalog/11245/analyzing-
information-on-women-owned-small-businesses-in-federal-contracting (hereinafter cited as NASinformation-on-women-owned-small-businesses-in-federal-contracting (hereinafter cited as NAS ~~WOSB~~ WOSB report, 2005). report, 2005).
49 NAS 49 NAS ~~WOSB~~ WOSB report, 2005, pp. 3-8, 80-87. report, 2005, pp. 3-8, 80-87.
~~The~~T he NAS NAS report indicated that SBA’s report indicated that SBA’s
preliminary disparity ratio estimates were developed for industry categories (defined preliminary disparity ratio estimates were developed for industry categories (defined by 2by 2 -digit -digit
StandardStandard Industrial Classification or SICIndustrial Classification or SIC codes) by dividingcodes) by dividing the the utilization share for each industry share for each industry
by the by the availability share. Utilization was definedshare. Utilization was defined as the share accruingas the share accruing to womento women -owned small -owned small
businessesbusinesses of the total dollar amount of contract actions for federal prime contracts over $25,000 in of the total dollar amount of contract actions for federal prime contracts over $25,000 in
fiscal year 1999 for the particular industry. Availability wasfiscal year 1999 for the particular industry. Availability was ~~defined~~ defined as the share of women-owned as the share of women-owned
businessesbusinesses with paid employees among all businesseswith paid employees among all businesses with paid employees in the particular with paid employees in the particular
industry from the 1997 Survey of Womenindustry from the 1997 Survey of Women -Owned Business-Owned Business Enterprises. Enterprises.
NAS NAS ~~WOSB~~ WOSB report, 2005, p. 2. report, 2005, p. 2.
50 SBA, 50 SBA, “Women-Owned Small“Women-Owned Small ~~Business~~ Business Federal Contract Assistance Procedures,” 72 Federal Contract Assistance Procedures,” 72 Federal Register 73287, 73287,
December 27, 2007. December 27, 2007.
51 SBA, 51 SBA, “Women-Owned Small“Women-Owned Small ~~Business~~ Business Federal Contract Assistance Procedures,” 72 Federal Contract Assistance Procedures,” 72 Federal Register 73287, 73287,
December 27, 2007. Also, see Elaine Reardon, Nancy Nicosia, and NancyDecember 27, 2007. Also, see Elaine Reardon, Nancy Nicosia, and Nancy Young Moore, Young Moore, The Utilization of ~~Women~~Wom en-
Owned ~~Small~~Sm all Businesses in Federal Contracting , at https://www.rand.org/pubs/technical_reports/, at https://www.rand.org/pubs/technical_reports/~~TR442~~T R442.html. .html.
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the firms are underrepresented in federal contracting in that NAICS code. A ratio greater than 1.0 the firms are underrepresented in federal contracting in that NAICS code. A ratio greater than 1.0
suggests that the firms are overrepresented.52suggests that the firms are overrepresented.52
RAND identified RAND identified 28 different approaches to determine underrepresentation and substantial 28 different approaches to determine underrepresentation and substantial
underrepresentation of WOSBs in federal procurement, each of which yielded a different result. underrepresentation of WOSBs in federal procurement, each of which yielded a different result.
After examiningAfter examining each approach’s benefits and deficiencies, the SBA defined underrepresentation 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 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 share of federal prime contract dollars divided by the WOSB share of total business receipts
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 0.5.53disparity ratio between 0.0 and 0.5.53
Using that methodology, the SBA Using that methodology, the SBA identified 83 four-digit NAICS industry groups in its final rule 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
eligibleeligible for EDWOSB set-asides only), and for EDWOSB set-asides only), and
 38 four-digit NAICS industry groups in which WOSBs are  38 four-digit NAICS industry groups in which WOSBs are ~~substantially~~substantial y
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 eligibletime were made eligible for WOSB (including EDWOSB) set-asides).54 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 underrepresented and ~~substantially~~substantial y underrepresented NAICS codes by January 2, 2016, and then 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 had ~~statistically~~statistical y significant lower odds of winning federal contracts than otherwise similar significant lower odds of winning federal contracts than otherwise similar
businesses not owned by women at the 95% confidence level.55businesses not owned by women at the 95% confidence level.55

~~52 SBA,~~ 52 SBA, “Women-Owned Small“Women-Owned Small ~~Business~~ Business Federal Contract Program,” 75 Federal Contract Program,” 75 Federal Register 62259, October 7, 2010. 62259, October 7, 2010.
53 SBA,53 SBA, “Women-Owned Small“Women-Owned Small ~~Business~~ Business Federal Contract Assistance Procedures,” 72 Federal Contract Assistance Procedures,” 72 Federal Register 73287-73289, 73287-73289,
December 27, 2007. December 27, 2007.
54 SBA, 54 SBA, “Women-Owned Small“Women-Owned Small ~~Business~~ Business Federal Contract Program,” 75 Federal Contract Program,” 75 Federal Register 62259-62262, October 7, 62259-62262, October 7,
2010; and U.S.2010; and U.S. ~~Bureau~~ Bureau of the Census, “of the Census, “ North American Industry Classification System: 60 digit 2007 Code files,” at North American Industry Classification System: 60 digit 2007 Code files,” at
https://www.census.gov/eos/www/naics/https://www.census.gov/eos/www/naics/~~downloadables/downloadables~~ downloada ble s/do wnloada bles.html. .html.
55 David N. Beede 55 David N. Beede and Robert N. Rubinovitz, “Utilization of Women-Owned Businessesand Robert N. Rubinovitz, “Utilization of Women-Owned Businesses in Federalin Federal Prime 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;December 31, 2015, at https://www.sba.gov/sites/default/files/wosb_study_report.pdf; and SBA,and SBA, “ “Women-Owned Women-Owned
SmallSmall ~~Business~~ Business Federal Contract Program; Identification of Eligible Industries,” 81 Federal Contract Program; Identification of Eligible Industries,” 81 Federal Register 11341, March 3, 11341, March 3,
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Based on the OCE study, the SBA increased the number of underrepresented and Based on the OCE study, the SBA increased the number of underrepresented and ~~substantially~~substantial y
underrepresented four-digit NAICS codes from 83 to 113, effective March 3, 2016 (21 in which 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 WOSBs are underrepresented (EDWOSB set-asides only) and 92 in which WOSBs are
~~substantially~~ substantial y underrepresented (WOSB and EDWOSB set-asides).56 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 SBAreplaced NAICS 2012, the SBA reduced the number of underrepresented and reduced the number of underrepresented and ~~substantially~~substantial y
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 industry groups in which WOSBs are ~~substantially~~substantial y underrepresented (WOSB and EDWOSB set- underrepresented (WOSB and EDWOSB set-
asides) to asides) to ~~fall~~ fal from 92 to 91.57 from 92 to 91.57 ~~Overall~~Overal , WOSB set-asides may be provided to WOSBs (including , WOSB set-asides may be provided to WOSBs (including
EDWOSBs) inEDWOSBs) in 364 (out of 1,023) six-digit NAICS industry codes and to EDWOSBs exclusively 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) eligiblesource contracts to WOSBs (including EDWOSBs) eligible under the WOSB program if 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 WOSBs are ~~substantially~~substantial y underrepresented in federal procurement; 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~~6.5 mil ion for manufacturing contracts (now $7.0 mil ion) and $4.0 mil ion for other federal contracts (now $4.5 mil ion).59 ).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 eligibleto EDWOSBs eligible under the WOSB program if 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~~
~~$4.5 million ($7 million for manufacturing contracts).60~~
~~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~~

~~2016.~~
~~56 SBA, “Women-Owned Small Business~~ 2016. 56 SBA, “Women-Owned Small Business Federal Contract Program; Identification of Eligible Industries,” 81 Federal Contract Program; Identification of Eligible Industries,” 81 Federal
Register 11340-11343, March 3, 2016. 11340-11343, March 3, 2016.
57 SBA, 57 SBA, “Women-Owned Small“Women-Owned Small ~~Business~~ Business Federal Contract Program NAICS CodeFederal Contract Program NAICS Code Updates,” 82 Updates,” 82 Federal Register
47278-47287 October 11, 2017. 47278-47287 October 11, 2017.
58 SBA, 58 SBA, “Qualifying NAICS“Qualifying NAICS for the Women-Owned Smallfor the Women-Owned Small ~~Business Federal~~ Business Federal Contracting program,” at Contracting program,” at
https://www.sba.gov/document/supporthttps://www.sba.gov/document/support —qualifying-naics-women-owned-small-business-federal-contracting-program. —qualifying-naics-women-owned-small-business-federal-contracting-program.
59 FAR59 FAR §19.1506(b)§19.1506(b) ~~and~~, FAR §19.1506(c) FAR §19.1506(c).
~~60 FAR §19.1506(a) and FAR §19.1506(c~~, and P.L. 116-283, the William M. (Mac) T hornberry National Defense Authorization Act for Fiscal Year 2021. T he Federal Acquisition Regulatory Council has the responsibility of adjusting each acquisition -related dollar threshold (including those for the 8(a), HUBZone, Service-Disabled Veteran-Owned, and Women-Owned Small Business contracting programs), on October 1, of each year that is evenly divisible by five. As a result, these thresholds may differ from t hose in statute. T he next adjustment for inflation will take place on October 1, 2025. See 13 C.F.R. §124.506(a); and 41 U.S.C. §1908(c)(2). ).
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 the anticipated total value of the contract, including any options, does not exceed $6.5 mil ion for manufacturing contracts (now $7.0 mil ion) and $4.0 mil ion for other federal contracts (now $4.5 mil ion).60 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 federal contracting dollars to WOSBs. The SBA published a final rule expanding the WOSB 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).61program to include sole source awards on September 14, 2015 (effective October 14, 2015).61
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 ineligibleexaminations of WOSBs, and “reviews of individual businesses found to be ineligible to better to better
understand the cause of the high rate of ineligibilityunderstand the cause of the high rate of ineligibility in annual reviews and determine what actions 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.64set-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].65contracts 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 and June 30, 2014, (17 WOSB set-aside awards totaling $6.6 ~~million~~ mil ion and 17 EDWOSB set-aside and 17 EDWOSB set-aside
awards totaling $7.9 awards totaling $7.9 ~~million~~mil ion) and found “15 of the 34 set-aside awards were made without ) 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~~mil ion.66 Specifical y, 10 of the 34 WOSB program set-aside awards were made “for work that , 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~~
~~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~~
~~found that “this occurred because agencies’ contracting officers did not comply with the~~

~~61 SBA, “Women-Owned Small Business~~ 60 FAR §19.1506(a), FAR §19.1506(c), and P.L. 116-283, the William M. (Mac) T hornberry National Defense Authorization Act for Fiscal Year 2021. 61 SBA, “Women-Owned Small Business Federal Contract Program,” 80Federal Contract Program,” 80 Federal Register 55019, September 14, 2015. 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,~~
~~Women-Owned Small~~ GAO, Wom en-Owned Sm all Business Program : Certifier Oversight and Additional Eligibility Controls Are Needed , GAO-, GAO-
15-54, October 8, 2014, at15-54, October 8, 2014, at https://www.gao.gov/products/GAO-15-54 (hereinafter cited as GAO-15-54, 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~~ Sm all Business Adm inistration: Actions Needed to
~~Improve~~Im prove Confidence in ~~Small Business Procurement Scorecard~~Sm all Business Procurem ent 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-19-563Tand 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,66 SBA, ~~OIG~~ OIG “Improvements Needed in SBA’s“Improvements Needed in SBA’s Management of the WomenManagement of the Women -Owned Small-Owned Small ~~Business~~ Business Federal 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-managementevaluation-report-15-10-improvements-needed-sbas-management -women-owned-small-business-federal (hereinafter -women-owned-small-business-federal (hereinafter
cited as SBA,cited as SBA, ~~OIG~~ OIG report, report, SBA’s ~~Management~~Managem ent of the WOSB Program ). Congressional Research Service 18 link to page 8 SBA Women-Owned Small Business Federal Contracting Program 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).
~~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~~
~~been set aside for an EDWOSB but were misclassified as~~ WOSB set- WOSB set-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 ~~aside awards.” See SBA, OIG report,~~ ~~SBA’s~~
~~Management of the WOSB Program, pp. 4, 5.~~
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regulations prior to awarding these awards and SBA did not provide enough outreach or training 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 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 totaling approximately $52.2 ~~million~~mil ion, were made “without having the necessary documentation to , were made “without having the necessary documentation to
determine eligibility”determine eligibility” of the award recipients.69 Examples of missing documentation included 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.70information.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 eligibleWOSB awards are made only to eligible firms in eligiblefirms in eligible industries; the performance of federal 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 about $21 ~~million~~ mil ion in FY2011 to $1.259 in FY2011 to $1.259 ~~billion~~ bil ion in FY2020, with most of that increase resulting in FY2020, with most of that increase resulting
from rising use of WOSB set-asides (from $15 from rising use of WOSB set-asides (from $15 ~~million~~mil ion in FY2011 to $1.085 in FY2011 to $1.085 ~~billion~~bil ion in FY2020). 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 to account for a relatively ~~small~~ smal portion of the federal contracts awarded to WOSBs. Although the portion of the federal contracts awarded to WOSBs. Although the
WOSB program has been operational since 2011, many federal agencies have littleWOSB program has been operational since 2011, many federal agencies have little experience experience
with the program. with the program.
For example, in FY2020, about 34% of the federal contracts awarded to WOSBs were awarded in For example, in FY2020, about 34% of the federal contracts awarded to WOSBs were awarded in
full and open competition with other firms, about 61% were awarded with another full and open competition with other firms, about 61% were awarded with another ~~small~~ smal business business
preference (such as the 8(a) and HUBZone programs), and about 5% were awarded with a WOSB preference (such as the 8(a) and HUBZone programs), and about 5% were awarded with a WOSB
preference.71preference.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~~
~~(4.0%), and GSA (4.0%). All other federal agencies accounted for 16.8%.72~~

~~68 SBA, OIG report, SBA’s Management of the WOSB Program, p. 4.~~
~~69 SBA, OIG “SBA’s Women-Owned Small Business Federal~~ 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. T he other six awards should have been set aside for an EDWOSB but were misclassified as WOSB set -aside awards.” See SBA, OIG report, SBA’s Managem ent of the WOSB Program , pp. 4, 5. 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, Contracting Program,” Report No. 18-18, June 20, 2018,
p. 4, at https://www.sba.gov/document/reportp. 4, at https://www.sba.gov/document/report -18-18-sbas-women-owned-small-business-contracting-program -18-18-sbas-women-owned-small-business-contracting-program
(hereinafter cited as SBA,(hereinafter cited as SBA, OIG report, OIG report, SBA’s WOSB Federal Contracting Program ). ).
70 SBA, 70 SBA, ~~OIG~~ OIG report, report, SBA’s WOSB Federal Contracting Program , p. 4. , p. 4.
71 Data generated using71 Data generated using GSA,GSA, “Sam.Gov Data Bank, Ad“Sam.Gov Data Bank, Ad Hoc report,” August 2, 2021, at Hoc report,” August 2, 2021, at
https://sam.gov/reports/https://sam.gov/reports/awards/adhoc. Congressional Research Service 19 SBA Women-Owned Small Business Federal Contracting Program Commerce (8.0~~awards/adhoc.~~
~~72 GAO-19-168, WOSB: Ongoing Oversight Issues, 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%),~~
~~Department of Homeland Security (DHS) (3.98%), Department of Commerce (0.6%), Department of Agriculture~~
~~(1.16~~%), Department of Agriculture (6.3%), Department of Health and Human Services %), Department of Health and Human Services (4.0~~(4.5~~%), and GSA (%), and GSA (~~2.14%). All~~ 4.0%). Al other federal agencies accounted other federal agencies accounted
~~for 12.4%. GSA, Federal Procurement Data System—Next Generation, accessed on April 21, 2020, at~~
~~https://www.fpds.gov/fpdsng/.~~
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for 16.8%.72
GAO conducted an audit of the WOSB program from October 2017 to March 2019. As part of the GAO conducted an audit of the WOSB program from October 2017 to March 2019. As part of the
audit, GAOaudit, GAO interviewed 14 stakeholder groups (staff from DHS, DOD, and GSA, eight 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 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 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 initiativescontracts, and that the SBA had several initiatives underway to help improve collaboration underway to help improve collaboration
between federal agencies and the between federal agencies and the ~~small~~ smal business community.73 The stakeholders also identified 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 Executing ~~sole source authority under the WOSB program is difficult for contracting~~
~~officers because rules for sole source authority under the WOSB program are~~ sole source authority under the WOSB program is difficult for contracting officers because rules for sole source authority under the WOSB program are different different
from those under SBA programsfrom those under SBA programs .... For example, the FAR’s [Federal Acquisition .... 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
expectexpect ~~other WOSBs or EDWOSBs to submit offers on a contract is stricter under~~ other WOSBs or EDWOSBs to submit offers on a contract is stricter under the 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 awarded within certain industries, represented by NAICS codes. For example, asides be awarded 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 7 of ~~the 14 stakeholder groups discussed the requirement for the contracting officer~~ the 14 stakeholder groups discussed the requirement for the contracting officer to 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 For example, staff ~~from one contracting office said that using the~~ from one contracting office said that us ing the 8(a) or HUBZone 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.76opportunities for WOSBs by reducing burdens on contracting officers.76
 Need for Additional Guidance. 72 GAO-19-168, WOSB: Ongoing Oversight Issues, 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%), 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 for 12.4%. GSA, Federal Procurement Data System—Next Generation, accessed on April 21, 2020, at https://www.fpds.gov/fpdsng/.  Need for Additional Guidance.
~~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~~
~~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~~
~~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~~
~~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~~

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, WOSB: Ongoing Oversight Issues~~, p. 34~~. .
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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 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 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 Expanding Contracting Opportunities for Smal Businesses Act of 2019) that would have, among other provisions, eliminated the inclusion of option periods in the award price for sole source contracts awarded to qualified HUBZone smal ~~contracts awarded to qualified HUBZone small~~ businesses, SDBs, SDVOSBs, and WOSBs businesses, SDBs, SDVOSBs, and WOSBs
(including EDWOSBs). This provision would have increased the number of contracts available (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 for sole source awards to these recipients because the option years would not count toward the
statutory caps on sole source awards (the WOSB statutory caps on sole source awards (the WOSB sole source caps are currently $7 caps are currently $7 ~~million~~mil ion for ~~for~~ manufacturing manufacturing
contracts and $4.5 contracts and $4.5 ~~million~~mil ion for other for other federal contracts).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)
eliminateeliminate the distinction and disparate treatment of WOSBs and EDWOSBs when awarding the distinction and disparate treatment of WOSBs and EDWOSBs when awarding
contracts, and/or (2) contracts, and/or (2) ~~allow~~al ow set-asides and sole source awards to WOSBs (including EDWOSBs) set-asides and sole source awards to WOSBs (including EDWOSBs)
in in ~~all~~ al NAICS industry codes regardless of WOSB representation, as is the case for other NAICS industry codes regardless of WOSB representation, as is the case for other ~~small~~
smal business preference programs.business preference programs.7978 Both legislative options could lead to an increase in the amount Both legislative options could lead to an increase in the amount
of contracts awarded to WOSBs. In the first instance, WOSBs would be eligibleof contracts awarded to WOSBs. In the first instance, WOSBs would be eligible for set-asides and for set-asides and
sole source awards in both underrepresented and sole source awards in both underrepresented and ~~substantially~~substantial y underrepresented NAICS codes, underrepresented NAICS codes,
instead of just instead of just ~~substantially~~substantial y underrepresented NAICS codes. In the latter instance, WOSBs and underrepresented NAICS codes. In the latter instance, WOSBs and
EDWOSBs would be eligibleEDWOSBs would be eligible for set-asides and sole source awards in for set-asides and sole source awards in ~~all~~ al NAICS industry codes, NAICS industry codes,
not just underrepresented or not just underrepresented or ~~substantially~~substantial y underrepresented NAICS industry codes. underrepresented NAICS industry codes.
As mentioned in the As mentioned in the “A Targeted Approach to Avoid Legal ~~Challenges~~Chal enges” section, one of the 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, distinctions among underrepresented, ~~substantially~~substantial y underrepresented, and other NAICS industry 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 Court ruled that ~~all~~ al racial classifications, whether imposed by federal, state, or local authorities, racial classifications, whether imposed by federal, state, or local authorities,
must pass strict scrutiny review (i.e., they must serve a must pass strict scrutiny review (i.e., they must serve a ~~compelling~~compel ing government interest and must 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~~ chal enges. .
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 that Congress has approved to provide greater opportunities for ~~small~~ smal businesses to win federal 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, distinctions between WOSBs and EDWOSBs and among underrepresented, ~~substantially~~
substantial y 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
77 GAO-19-168, WOSB: Ongoing Oversight Issues, p. 34. 78 For example, see Rachel N. Herrington, “Five Years In: A Review of the Women -Owned Small Business Federal Contracting Program,” Public Contract Law Journal, vol. 45, no. 2 (Winter 2016), pp. 359 -382. Congressional Research Service 21 SBA Women-Owned Small Business Federal Contracting Program 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.

~~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.~~
~~79 For example, see Rachel N. Herrington, “Five Years In: A Review of the Women-Owned Small Business Federal~~
~~Contracting Program,” Public Contract Law Journal, vol. 45, no. 2 (Winter 2016), pp. 359-382.~~
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~~SBA Women-Owned Small Business Federal Contracting Program~~

Also, the data on WOSB federal contract awards suggest that federal procurement officers are 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 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~~ smal portion of WOSB contracts. Most of the federal contracts awarded to WOSBs are awarded 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 in full and open competition with other firms or with another ~~small~~ smal business preference program business preference program
(such as the 8(a) and HUBZone(such as the 8(a) and HUBZone programs). Relatively few federal contracts are awarded through programs). Relatively few federal contracts are awarded through
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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