GOVERNMENT CONTRACTS, CONSTRUCTION AND PROCUREMENT POLICY PRACTICE GROUP
E-NEWS — JUNE 26, 2006
Set Asides for Woman-Owned Small Businesses May
Be Closer
The Small Business Administration published proposed rules on June 15, 2006, (71 Federal Register
34550, available here) that would finally establish a small business set-aside program for womanowned small businesses. The rules create contract set-aside programs for woman-owned small
businesses (WOSBs) and economically disadvantaged woman-owned small businesses (EDWOSBs).
Contracting agencies would be able to restrict competition to either EDWOSBs or WOSBs in those
industry categories (yet to be named) where WOSBs are "substantially" underrepresented and the
contract size is under $5 million for manufacturing and $3 million for all other types. The set-asides
would be made under the traditional Rule of Two analysis.
Unlike the self-certification process for small business concerns, all WOSBs and EDWOSBs would be
required to apply to SBA for initial certification with re-certification to occur every 3 years. In order to
qualify, 51% of a WOSB must be owned and controlled by one or more women. An EDWOSB is a
WOSB that is at least 51% owned and controlled by women with individual net worths of under
$750,000.
The establishment of a formal set-aside program for WOSBs is intended to increase total awards to the
1994 statutory mandate of 5% of all prime contract awards. It will also increase attention on subcontract
awards being made to WOSBs by large business concerns as part of their mandatory Small Business
Subcontracting Plan. The recent efforts by the government to establish a data base of all required
Small Business Subcontracting Plans and annual reporting (SF 294 and SF 295), see
http://www.esrs.gov/, will make it easier for government agencies to compare prime contractor
performance as a means of awarding large prime contracts.
Comments on the proposed rule are due July 17, 2006.
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