Type: Law Bulletins
Date: 05/09/2013

SBA Issues Interim Final Rule Removing Cap on Contract Value for Women-Owned Small Business Set-Asides

On May 7, 2013, in response to recent statutory changes to the Small Business Act, the Small Business Administration ("SBA") issued a final interim rule, effective immediately, that removes the dollar value limitations on Women-Owned Small Business (“WOSB”) and Economically Disadvantaged Women-Owned Small Business (“EDWOSB”) set-asides. Contracting officers may now set aside any contract for competition among WOSBs or EDWOSBs for federal contracts within the enumerated industries when: (1) there is a reasonable expectation that two or more WOSBs (in the case of industries in which WOSBs are underrepresented) or EDWOSBs (in the case of industries where WOSBs are substantially underrepresented) will submit offers; and (2) the contracting officer anticipates that the contract can be awarded at a fair and reasonable price.

Under the original statutory scheme that created WOSB/EDWOSB set-asides, contracts being set aside under this program could not exceed $5 million for manufacturing contracts or $3 million for all other contracts. Although the SBA adjusted these statutory amounts for inflation, raising the thresholds to $6.5 for manufacturing contracts and $4 million for all other contracts, it was still found that the ceilings had the unintended effect of severely reducing the number of potential WOSB set-asides. This, in turn, prevented the government from satisfying its 5% contracting goal for WOSBs.

While WOSB/EDWOSB set-asides are still restricted because they are limited to contracts under a specific listing of NAICS codes applicable to industries in which WOSBs have been either underrepresented or substantially underrepresented, there is no doubt that lifting the dollar threshold restriction removed a large hurdle to meeting the 5% goal for WOSB contract awards. Qualifying WOSBs/EDWOSBs should be sure to respond to RFIs and communicate with contracting officials whenever possible to make them aware of the WOSB’s/EDWOSB’s ability to fulfill the contract at a fair and reasonable price—regardless of the value of the contract.

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