National Association of Government Contractors

IG Says Certification for Women-Owned Inadequate

The Inspector General of the Small Business Administration has determined  that the agency must improve its execution of the law requiring it to steer certain types of contracts to women-owned small businesses.
A review of a major portion of sole-source federal contracts in 2016 and early 2017 awarded to self-certified women-owned companies showed that 50 out of 56—contracts worth in excess of $50 million -- did not follow regulations, according to an inspector general’s report released last week.
“Federal agencies’ contracting officers did not comply with the program requirements,” the IG’s report found. “Furthermore, the firms that received those contracts did not comply with the program’s self-certification requirement,” the result being “no assurance that these contracts were awarded to firms that were eligible to receive sole-source awards under the program.”
Contractors seeking government work under the Women-Owned Small Business Federal Contracting Program got a boost under the 2015 National Defense Authorization Act, but that act also required that firms be certified by a federal agency, a state government, the SBA administrator, or a national certifying entity approved by the administrator.
A 2015 Government Accountability Office report found that SBA did not have adequate procedures to oversee third-party certifiers or reasonable assurance that only eligible women-owned businesses were obtaining the set-asides.
Women-owned businesses have long been allowed to “self-certify” their availability for contract set-asides by going online at SBA’s website and uploading key corporate documents. 
There is thought to be wide-spread abuse of the program --  allegations of fraud in order to qualify for the set-asides has brought an increase in the number of bid protests by competitors, questioning the bona fide qualification of some companies.
The SBA IG recommended formalizing the SBA’s certification process and improve the program’s integrity through more frequent eligibility reviews (including debarment of violators), addressing incomplete data and errors, and coordinating with the Office of Federal Procurement Policy and General Services Administration to strengthen information in the government’s centralized contractor databases.
SBA has agreed with the substance of the report but saying it will need at least another year to fully implement a rigorous certification process that goes beyond the current self-certification.

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