Caps Removed on SBA Federal Contract Programs for Women-Owned Small Businesses

May 22, 2013

file5061263252299.jpgThe federal government offers a variety of programs for women-owned small businesses (WOSBs), generally defined as businesses with at least fifty-one percent of the equity owned and controlled by women. Such businesses have historically suffered disadvantages and discrimination, and part of the official policy of the U.S. Small Business Administration (SBA) and other agencies is to offer them support, including loans and government contracts. The SBA has a program, known simply as the Women-Owned Small Business Program, that assists WOSBs and economically-disadvantaged women-owned small businesses (EDWOSBs) in procuring government contracts. The program has had upper limits on the size of available contracts imposed by statute until recently. Congress removed the cap at the end of 2012, and the SBA published an Interim Final Rule in early May 2013, thus opening up a much wider field of government contracts potentially set aside for WOSBs and EDWOSBs.

Federal Support for Women-Owned Small Businesses

Congress has declared that it is in the nation's interest to support WOSBs by "vigorously promoting the[ir] legitimate interests" and removing "discriminatory barriers [to] capital and other factors of production." 15 U.S.C. § 631(h). Congress defined a "small business concern" as one that is "not dominant in its field of operation," id. at § 632(a)(1), and that meets other criteria established by the SBA. It defined a WOSB officially as a small business concern "owned by one or more women," with at least fifty-one percent of the stock (if a public corporation), and in which "one or more women" handle the day-to-day business operations. Id. at § 632(n). The SBA established standards to determine if a small business is "economically disadvantaged," generally based on the circumstances of the individual owners.

Procurement Programs for Women-Owned Small Businesses

Federal agencies are authorized to set aside a certain number of contracts for WOSBs and EDWOSBs, in what the SBA calls the Women-Owned Small Business Program. 15 U.S.C. § 637(m). The SBA started encouraging federal agencies to award at least five percent of their contracting dollars to WOSBs in 2011, although they have yet to reach that goal. Until recently, contracts available under the procurement program were limited to a maximum value of $6.5 million for manufacturing contracts and $4 million for other contracts, effectively creating a "glass ceiling" for WOSBs.

Congress removed the upper limit for the program in § 1697 of the National Defense Authorization Act of 2013 (NDAA). The SBA published a new Interim Final Rule for the program in the Federal Register on May 7, 2013. Shortly before that, it announced a new initiative in support of the procurement program called ChallengeHER, which is designed to help connect WOSBs with federal contracting officers. The SBA will be hosting workshops in several cities in upcoming months, including one in New York City.

The business attorneys at Samuel C. Berger, PC offer fixed-fee packages of legal services to New York and New Jersey businesses and entrepreneurs. We represent our clients in a wide range of legal issues, with a commitment to helping businesses grow and prosper. To speak to a member of our legal team, contact us today online or at (212) 380-8117.

More Blog Posts:

Proposed State and Federal Legislation Offers Tax Incentives for Technology Investment, Job Creation, and More, New York & New Jersey Business Lawyer Blog, April 25, 2013

Small Business Owners in New York City Report Optimism Going into 2012, New York & New Jersey Business Lawyer Blog, January 26, 2012

New Jersey Governor Signs New Law Providing New Funds for Businesses in Development Areas, New York & New Jersey Business Lawyer Blog, January 17, 2012

Photo credit: mconnors from morguefile.com.