SBA: More industries for WOSBs;
Gains and losses for EDWOSBs
Regulations reflect drop in women’s share in 100s of industries
The Small Business Administration announced a major expansion of its Women-Owned Small Business (WOSB) Program, making set-asides under the program available in more industries.
The SBA’s new regulations, which went into effect March 3, more than doubled the number of industries in which WOSB set-asides may be awarded. Economically-Disadvantaged WOSBs (EDWOSBs) also may compete for those WOSB set-asides.
But the overall impact is mixed for women who have obtained the additional certification as EDWOSBs. There currently are about 37,000 women enrolled in the SBA’s WOSB program, of whom about 13,000 also are EDWOSBs.
Under the new rules, the economically-disadvantaged women have experienced a loss of some set-asides that previously were reserved exclusively for EDWOSBs.
The SBA has confirmed to Set-Aside Alert that the EDWOSBs no longer have exclusive access to set-asides in a number of industries in which they previously had exclusive access.
EDWOSBs “have lost some exclusivity within the WOSB program,” Carol Wilkerson, SBA spokeswoman, told Set-Aside Alert in an email.
For example, previously only EDWOSB set-asides were allowed under the North American Industry Classification System (NAICS) 5415 industry group, Computer Systems Design and Related Services.
Under the new rules, those EDWOSB-only set-asides no longer exist for NAICS 5415.
Instead, WOSB set-asides are now allowed in NAICS 5415. EDWOSBs may compete for those set-asides as well, but they are likely to face competition from a larger pool of WOSBs.
Debra Watkins, a woman business owner in Alabama, who recently applied for the EDWOSB designation, said she worries that the designation may not be as valuable to her now that the industries have changed.
Having NAICS 5415 exclusively for EDWOSBs in the past provided “a competitive edge,” Watkins told Set-Aside Alert. “I am disappointed.”
Industry changes
The SBA’s new regulations are based on a recent Commerce Department study that updated the list of industries in which set-asides may be awarded under the SBA’s WOSB program. Congress requested the study as part of the 2014 defense authorization law.
In the study, women were judged to be substantially underrepresented in many more industries than in the past; as a result, those industries are now eligible for WOSB set-asides.
The study also found fewer industries in which women were underrepresented to a less-than-substantial degree, in comparison to past years. EDWOSBs have exclusive access to set-asides in those industries; WOSBs without the EDWOSB designation are not eligible in this category.
WOSBs: good news, bad news
The new SBA regulations reflect a “good news, bad news” story for women small business owners.
The good news is that the women now are eligible for federal set-asides in over 200 more industries. The bad news is that the rise is based on findings that women are significantly marginalized in those industries. Under the new rules, WOSBs now have access to set-asides in 92 four-digit-NAICS-code industry groups, up from 38 in the past.
That means WOSBs now can get set-asides in 365 industries (described by six-digit NAICS codes), a huge increase from 135 industries previously, the SBA confirmed to Set-Aside Alert.
EDWOSB gains and losses
Because the Commerce Dept. found fewer industries in which women are underrepresented to a mild degree, there are now fewer industries for which only EDWOSBs have exclusive access.
EDWOSBs now have exclusive access to EDWOSB-only set-asides in 21 industry groups, which is a reduction from 45 industry groups previously, the SBA has confirmed to Set-Aside Alert.
EDWOSBs now have exclusive access to EDWOSB-only set-asides in 80 industries, which is reduced from 198 industries previously.
However, since the EDWOSBs also are eligible to compete for WOSB set-asides, the EDWOSBs overall have a net gain in access to set-asides under the WOSB program.
Overall, EDWOSBs have exclusive or non-exclusive access to set-asides in a total of 113 industry groups, an increase from 83 industry groups. EDWOSBs are eligible for set-asides in 445 industries, up from 330 industries previously.
SBA’s comments
The SBA’s Federal Register notice on the new regulations did not directly reference the impact on EDWOSB-only set-asides.
Asked for comment, the SBA noted that there is a net gain in industries now eligible for WOSB and EDWOSB set-asides and sole-source awards, and also acknowledged the reduced exclusivity. “EDWOSBs have not lost access but they have lost some exclusivity within the WOSB program,” Wilkerson said.
