Set-Aside Alert exclusive:

WOSB awards in ineligible NAICS codes

The Small Business Administration’s set-aside program for women-owned small firms is facing yet another set of NAICS code problems uncovered in Set-Aside Alert’s exclusive research.

In our final report from Set-Aside Alert’s investigation into the SBA’s Women-Owned Small Business (WOSB) program, we found $7 million in WOSB and EDWOSB set-aside contracts reported to have been awarded in industries in which women are not underrepresented.

Those industries are ineligible for WOSB and EDWOSB set-asides, under SBA regulations.

Presumably, the 90 WOSB and EDWOSB set-aside awards we identified in the 31 NAICS codes for the ineligible industries would have been voided if they had been protested in a timely fashion.

SBA responds

After we contacted the SBA about our findings, Sean Crean, SBA’s director of government contracting, said the agency is following up to look into the issues identified in our report.

“SBA is very concerned that contracts are awarded properly to only eligible WOSB and EDWOSB NAICS. We are adding an examination of apparent NAICS miscoding to our federal agency compliance review process,” Crean told Set-Aside Alert.

SBA officials, along with other specialists, have said that the patterns of errors uncovered in the Set-Aside Alert investigation suggest that WOSB and EDWOSB contracts may have been awarded improperly in reality. Set-Aside Alert did not examine each contract in detail.

The data set

Set-Aside Alert initially compiled a data set of more than 400 WOSB and EDWOSB set-aside contracts expiring in 2015 and beyond totaling $139 million, using the Federal Procurement Data System. We then sorted those by NAICS code.

From that data set, we previously identified 87 set-aside contracts in the top 10 NAICS codes reserved strictly for EDWOSBs reported to have been awarded--apparently erroneously--to WOSBs. Those EDWOSB-only contracts awarded to WOSBs totaled $62 million. Presumably those misdirected contracts would have been made void if they had been protested in a timely fashion.

Latest research

In our latest research wtih the same data set, we examined WOSB and EDWOSB set-aside contracts made in industry NAICS codes in which women are not underrepresented. Those NAICS codes are not eligible for either WOSB or EDWOSB set-asides.

We found 90 set-aside contracts to WOSBs and EDWOSBs reported to have been awarded in 31 ineligible NAICS Codes. Those contracts totaled $7 million.

Many of the ineligible NAICS codes had just one award reported. But others had multiple awards.

For example, the Air Force and Veterans Affairs Department reported eight WOSB awards totaling $1.7 million in NAICS code 561320, which is ineligible for WOSB or EDWOSB set-asides.

The Army, Navy, Energy Department, Bureau of Indian Affairs and Federal Emergency Management Agencies reported five WOSB and EDWOSB set-aside awards totaling $1.4 million in NAICS code 236220, which is ineligible.

And the Federal Prison System reported 28 WOSB set-aside awards totaling $559,000 in NAICS code 331110, also ineligible.

31 ineligible NAICS codes

The 31 ineligible NAICS Codes with reported WOSB/EDWOSB set-asides awards expiring in 2015 and beyond were:

• 561320, with $1.7 million;
• 236220, with $1.4 million;
• 334111, with $1.4 million;
• 331110, with $559,000;
• 443120, with $387,000;
• 928120, with $363,000;
• 423430, with $187,000;
• 532210, with $176,000;
• 423450, with $173,000;
• 621512, with $94,000;
• 453210, with $90,000;
• 712110, with $77,000;
• 334112, with $55,000;
• 339944, with $53,000;
• 325120, with $53,000;
• 562991, with $52,000;
• 334118, with $31,000;
• 339999, with $31,000;
• 624190, with $29,000;
• 334119, with $19,000;
• 334417, with $12,000;
• 334419, with $10,000;
• 424120, with $10,000;
• 333293, with $8,000;
• 311999, with $6,000;
• 621112, with $5,000;
• 332721, with $4,000;
• 711310, with $4,000;
• 115310, with $4,000; and
• 326192,with $1,000.

The new set of WOSB and EDWOSB data problems are the latest in a series uncovered by Set-Aside Alert in our exclusive investigation of WOSB and EDWOSB set-asides (see 4/17/2015 and 5/1/2015 editions).

An SBA official previously said the agency was “very concerned” about the pattern of apparently erroneous awards and is examining the data. Several specialists urged WOSB firms to review NAICS codes for all current and future WOSB set-asides.

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