July 2, 2024
The Women-Owned Small Business (WOSB) certification is a designation by the United States government, designed to acknowledge businesses that are predominantly, owned, managed, and operated by women. This certification grants unique access to federal contracts that are specifically reserved for WOSBs known as set-asides.
These contracts are specific industries where WOSBs are underrepresented. Some contracts are restricted further to economically disadvantaged women-owned small businesses (EDWOSBs). SBA maintains a list of those eligible industries and their NAICS codes. According to the U.S. Census Bureau’s Annual Business Survey, the U.S. has nearly 1.3 million women-owned businesses with 99.9% of them categorized as small businesses, employing over 10.7 million workers. 42% of all U.S. businesses are owned by women; Women-owned businesses have grown 114% over the last two decades.
Women-Owned Small Businesses (WOSB) and Economically Disadvantaged Women-Owned Small Businesses (EDWOSB) are two certification programs designed to support and promote women entrepreneurs in the United States. The primary difference between these two certifications lies in the economic status of the women who own and control the business. To qualify as a WOSB, at least 51% of the business must be owned and controlled by one or more women who are U.S. citizens. The business must also be considered small according to the Small Business Administration's (SBA) size standards for its industry.
On the other hand, to qualify as an EDWOSB, a business must meet all the requirements of a WOSB, but with an additional economic disadvantage criteria. The woman or women who own and control the business must have a personal net worth of less than $750,000, adjusted gross income averaged over the previous three years of $350,000 or less, and personal assets of $6 million or less. These financial thresholds ensure that the EDWOSB program targets women who have faced significant economic challenges in starting and growing their businesses.
The Women-Owned Small Business (WOSB) Certification Program was developed through the Federal Acquisition Streamlining Act of 1994, which established a goal of awarding 5% of all federal contracting dollars to women-owned businesses. However, it wasn't until the early 2000s that the program began to take shape. In 2000, Congress passed the Equity in Contracting for Women Act, which amended the Small Business Act to create the WOSB program. The program was designed to help women-owned businesses compete for federal contracts in industries where they were underrepresented. Under the original program, WOSBs could self-certify their status, which led to concerns about fraud and abuse. In 2015, the National Defense Authorization Act (NDAA) amended the WOSB program to require third-party certification. This change was intended to increase the credibility of the program and ensure that only eligible businesses were receiving the benefits of the program. In 2020, the NDAA further expanded the WOSB program by creating a new certification for Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs). This certification is designed to provide additional support to women-owned businesses that face significant economic challenges.
To be eligible for the Women-Owned Small Business (WOSB) Certification Program, a business must meet several key criteria:
The federal government has a goal of awarding 5% of all contracting dollars to WOSBs. To help meet this goal, contracting officers can set aside certain contracts exclusively for competition among WOSBs. This means that only certified WOSBs can bid on these contracts, which can significantly increase their chances of winning. In certain circumstances, contracting officers can award sole-source contracts to WOSBs. This means that the contract is awarded without competition to a single WOSB. To be eligible for a sole-source contract, a WOSB must be the only responsible source capable of performing the work. Many prime contractors have subcontracting goals for WOSBs. By becoming certified, a business can increase its visibility to prime contractors seeking to meet these goals. This can lead to additional subcontracting opportunities. The SBA and other organizations offer various business development programs and resources specifically for WOSBs. These may include training, mentoring, and networking opportunities designed to help WOSBs grow and succeed.
Annual attestation must be submitted within 30 days of the anniversary date of certification. Additionally, firms must undergo a program examination every three years conducted by SBA or a third-party certifier.
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