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Federal Market Intelligence for Small Business |
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OIG finds 89% of WOSB sole-source contracts not compliantNearly 90% of the sole-source federal contracts awarded under the government’s Women-Owned Small Business (WOSB) contracting program failed to comply with regulations, a recent audit found. The audit by the Small Business Administration’s Office of Inspector General reported that 50 out of 56 sole-source WOSB contracts reviewed were non-compliant. Those 50 improper contracts--representing 89% of those audited--totaled $52 million. They were awarded from Jan. 1, 2016 to April 30, 2017. Furthermore, the WOSBs that received those 50 sole-source awards did not follow the government’s self-certification rules. Specifically, for 18 of the contracts reviewed, totaling $12 million, the WOSBs had no documents filed at Certify.gov as required. For 32 of the contracts reviewed, valued at $41 million, there was incomplete documentation. Also, some awards were made to firms in ineligible industries. “SBA, as part of its oversight role, must ensure that it takes all necessary measures to ensure the integrity of the program,” the report said. “Awarding contracts to potentially ineligible firms eliminates contracting opportunities for eligible businesses.” According to the auditors, both the agency contracting officers and the women owners are responsible for following the rules, and both failed to do so in 50 of the 56 awards reviewed. “Overstated” WOSB awards? The contracts that were audited represented 81% of the entire value of sole-source contracts in the WOSB program. As a result of awards made to possibly ineligible firms, the government’s performance with respect to WOSB contracting may be “overstated,” the report added. However, currently only about 2% of the government’s contract awards to women-owned small firms are channeled through the SBA’s WOSB program, the audit noted. Total WOSB awards reached $20.8 billion in fiscal 2017, or 4.71% of the government’s procurement, falling short of the 5% goal. About $415 million in awards was channeled through the SBA’s WOSB program. NDAA changes Under the WOSB program, women-owned small firms and Economically-Disadvantaged WOSBs may self-certify as such. WOSB set-asides are allowed in industries in which WOSBs are underrepresented. There are 365 NAICS codes in which WOSBs are underrepresented, and 80 NAICS codes in which EDWOSBs are underrepresented. The national defense authorization law for fiscal 2015 gave authority for sole-source WOSB awards, which was implemented in October 2015. The law also ordered a formal certification process for WOSBs, but that has not been implemented yet. According to the OIG report, SBA says it will take “at least another year” before it implements WOSB certification. SBA OIG recommendations The inspector general advised that the SBA move forward on WOSB certification. The auditors also recommended conducting eligiblity reviews on the firms that failed to submit proper documentation and initiating debarment proceedings where appropriate. The inspectors said SBA should conduct quarterly reviews of all newly-certified WOSBs and EDWOSBs. They also advised strengthening controls for the Federal Procurement Data System-Next Generation. More information: OIG report: https://bit.ly/2lmRqwr
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