The NDAA of 2015 not only authorized sole source awards to WOSBs and EDWOSBs, it also eliminated WOSB and EDWOSB self-certification. The SBA, however, chose not to implement this section of the law in its sole source rule issued September 14, 2015 (see our blog post on SBA’s rule here) due to the complexity of its implementation.

On December 18, 2015, the SBA issued an advanced notice of proposed rulemaking (ANPRM), inviting comments on the four methods of certification permitted by the NDAA: federal agency, state government, SBA, and national certifying entities approved by SBA. With regard to these methods, the SBA is seeking comments on the following:

  1. Whether each of the methods should be pursued;
  2. Concerns of feasibility regarding any of the methods;
  3. Possibility of a grace period for those who have self-certified to obtain approved certification; and
  4. What should become of the current WOSB repository.

Under SBA’s current rules, businesses may self-certify after submitting required documents to the SBA repository or get certified by a third party provider.  Currently, there are four third party entities that have been approved by the SBA to certify firms as WOSBs or EDWOSBs. The SBA is considering how many third party entities are necessary to process the certifications under the new rule and whether the cost to WOSBs and EDWOSBs should be taken into consideration in selecting third party certifiers.

The NDAA also permits states and federal agencies to act as certifiers. Under SBA’s current rules, SBA may recognize state certified WOSBs for businesses owned and controlled by women and designated as Disadvantaged Business Entities (DBEs) under the Department of Transportation’s DBE program. This is the only state certification currently recognized by SBA, and there currently does not exist any federal agency certification for WOSB and EDWOSBs.

SBA currently has two certification programs – 8(a) BD Program and HUBZone Program. Because the program requirements are similar, certification as an 8(a) BD Program Participant qualifies as WOSB or EDWOSB certification, if the business is clearly owned and controlled by one or more women. However, the requirements for qualification as a HUBZone SBC differ from the WOSB Program, and HUBZone SBC certification does not serve as evidence of a businesses’ status as a WOSB or EDWOSB. As part of this proposed rule, SBA is considering a separate WOSB certification process, which requires consideration of a myriad of changes including: SBA’s limited resources, any rights of appeal, and overlap with the 8(a) BD Program.

Comments on the ANPRM will be accepted until February 16, 2016, but WOSBs and EDWOSBs who have relied on self-certification should prepare to transition to one of the four certification methods in the near future.