U.S. GOVERNMENT PUBLISHING OFFICE

36–318 WASHINGTON : 2019

OVERSIGHT OF THE SBA’S WOMEN-OWNED SMALL 

BUSINESS FEDERAL CONTRACT PROGRAM 

HEARING 

BEFORE THE

SUBCOMMITTEE ON CONTRACTING AND 

INFRASTRUCTURE 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED SIXTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

MAY 16, 2019 

Small Business Committee Document Number 116–021 

Available via the GPO Website: www.govinfo.gov 

SBD026 with DISTILLER


Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

NYDIA VELA ́ ZQUEZ, New York, Chairwoman 

ABBY FINKENAUER, Iowa 

JARED GOLDEN, Maine 

ANDY KIM, New Jersey 

JASON CROW, Colorado 

SHARICE DAVIDS, Kansas 

JUDY CHU, California 

MARC VEASEY, Texas 

DWIGHT EVANS, Pennsylvania 

BRAD SCHNEIDER, Illinois 

ADRIANO ESPAILLAT, New York 

ANTONIO DELGADO, New York 

CHRISSY HOULAHAN, Pennsylvania 

ANGIE CRAIG, Minnesota 

STEVE CHABOT, Ohio, Ranking Member 

AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member 

TRENT KELLY, Mississippi 

TROY BALDERSON, Ohio 

KEVIN HERN, Oklahoma 

JIM HAGEDORN, Minnesota 

PETE STAUBER, Minnesota 

TIM BURCHETT, Tennessee 

ROSS SPANO, Florida 

JOHN JOYCE, Pennsylvania 

ADAM MINEHARDT, Majority Staff Director 

MELISSA JUNG, Majority Deputy Staff Director and Chief Counsel 

KEVIN FITZPATRICK, Staff Director 

SBD026 with DISTILLER

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Jared Golden ................................................................................................... 1 

Hon. Pete Stauber ................................................................................................... 3 

WITNESSES 

Mr. William B. Shear, Director, Financial Markets and Community Investment, U.S. Government Accountability Office, Washington, DC ..................... 5 

Mr. Robb N. Wong, Associate Administrator, Office of Government Contracting and Business Development, U.S. Small Business Administration, 

Washington, DC ................................................................................................... 6 

APPENDIX 

Prepared Statements: 

Mr. William B. Shear, Director, Financial Markets and Community Investment, U.S. Government Accountability Office, Washington, DC ....... 18 

Mr. Robb N. Wong, Associate Administrator, Office of Government Contracting and Business Development, U.S. Small Business Administration, Washington, DC ................................................................................... 38 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

None. 

SBD026 with DISTILLER

SBD026 with DISTILLER

(1) 

OVERSIGHT OF THE SBA’S WOMEN-OWNED 

SMALL BUSINESS FEDERAL CONTRACT 

PROGRAM 

THURSDAY, MAY 16, 2019 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

SUBCOMMITTEE ON CONTRACTING AND INFRASTRUCTURE, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:08 a.m., in Room 

2360, Rayburn House Office Building, Hon. Jared Golden [chairman of the Subcommittee] presiding. 

Present: Representatives Golden, Veasey, Hagedorn, and 

Stauber. 

Chairman GOLDEN. Good morning, everyone. The Committee 

will come to order. I want to thank everyone for joining us this 

morning, and I want to especially thank the witnesses for being 

here. 

Today, women make up more than 50 percent of the population. 

They have grown to be 47 percent of the workforce, and are increasing their footprint as business owners. As of last year, surveys 

indicate that women own 12.3 million companies, employ more 

than 9.2 million people, and generate $1.7 trillion in revenue. 

While great progress has been made in the number of women 

starting their own businesses, spurring economic growth, and creating jobs, challenges do remain. We hear from small businesses 

that what they need most often are access to markets and customers. As the largest purchaser of goods and services in the world, 

spending nearly $442 billion in fiscal year 2017, the Federal Government relies on small businesses to provide high quality goods 

and services at competitive prices. 

Recognizing the importance of women-owned small businesses 

and the difficulties they face in accessing Federal contracting opportunities, Congress created the Women-Owned Small Business 

program and the Small Business Reauthorization Act of 2000. Despite the clear intent of Congress to establish this program, it did 

not begin to operate until 2011, more than a decade after its passage. 

This program was designed to provide increased access to Federal contracting opportunities for women-owned small businesses, 

and economically disadvantaged women-owned small businesses, 

by allowing contracting officers to set aside specific contracts for 

certified firms. Doing so helps agencies achieve their statutory goal 

SBD026 with DISTILLER

2 

of 5 percent of Federal contracting dollars awarded to womenowned small businesses. 

However, since enactment, that 5 percent goal has only been met 

one time since 2013. And, again, we missed the mark in fiscal year 

2017 with $20.8 billion going to women-owned businesses, about 

4.7 percent of contracting dollars. We can, and simply must do better to hit the mark of 5 percent. 

A critical part of doing so is by finally implementing the changes 

made in the fiscal year 2015 National Defense Authorization Act. 

Legislation authored by Chairwoman Vela ́zquez amended multiple 

provisions of the program, paving the way for much-needed reform. 

The first change, and the only one implemented to date, granted 

sole-source authority, allowing contracting officers the ability to 

award contracts, when appropriate, without a competitive process. 

This update put the Women-Owned Small Business program on a 

level playing field with all other Small Business Administration 

contracting programs. 

Secondly, the legislation removed a small business’s ability to 

self-certify eligibility for the Women-Owned Small Business program, to address concerns of potential fraud. 

Finally, it made clear Congress’s intent for the SBA to certify 

program participants. These two certification measures were intended to help prevent fraud and ensure that contracts are awarded to the intended recipients, women-owned small businesses. 

Much like the delayed implementation of the Women-Owned Small 

Business program, we have seen, yet again, the SBA taking, if we 

want, I think, to be generous, an overly deliberatively process to 

implement the very clear intent of the legislative branch. 

In light of these implementation delays in 2017, the members of 

this committee requested GAO to review the program, and today’s 

hearing gives us the opportunity to discuss their findings and recommendations. The report echoes the finding of prior GAO reports 

and those of the SBA Inspector General that the SBA has still not 

addressed ongoing oversight issues. 

For example, GAO previously recommended that SBA establish 

procedures to assess the performance of four third-party certifiers, 

private entities approved by SBA to certify the eligibility of womenowned small firms. While SBA conducted a compliance review of 

the certifiers in 2016, it has no plans to regularly monitor them. 

Thus, SBA cannot ensure that certifiers are fulfilling the requirements of their agreements as stipulated by the parties, and it is 

missing the opportunity to gain valuable information that could 

help improve the program’s processes. 

By not improving its oversight of the program, SBA is limiting 

its ability to ensure third-party certifiers are following program requirements. Most troublesome is the lack of a certification process. 

After nearly 5 years, the agency has yet to implement its own certification program or implement self-certification, which increases 

the likelihood for fraud in the program. This is unacceptable. 

While I am glad to see SBA is taking this matter seriously by 

publishing a proposed rule for implementing the certification program on Tuesday of this week, I remain concerned about the duration of this process. It is difficult for me not to wonder when we 

SBD026 with DISTILLER

3 

would have seen this rule issued, had we not scheduled this hearing. 

It is encouraging to see that SBA plans to apply consistent certification standards across the programs and establish a free, electronic application process. Yet the fact that SBA relies so heavily 

on third-party certifiers who charge fees, raises some questions, despite the agency stating in the rule that it intends to perform compliance reviews of the certifiers. This flies in the face of the GAO’s 

findings that SBA had no plans to regularly monitor them. 

With all this said, I look forward to working with SBA on this 

matter to ensure that a new certification program is promptly established and meets our objectives. We know that when it comes 

to Federal procurement, women-owned companies too often face an 

uphill battle to winning their fair share of contracts. That is precisely why the program was created in the first place—to create 

greater opportunity for female entrepreneurs and a fairer procurement process. 

This hearing gives us a chance to have an open dialogue so that 

we can work together to guarantee women have a seat at the table 

when it comes to doing business with the government. 

I thank both our witnesses for their attendance and insights into 

this important topic, and I would now like to yield to the Ranking 

Member, Mr. Stauber, for an opening statement. 

Mr. STAUBER. Well, thank you, Mr. Chairman. 

The Federal Government recognizes a long-standing policy that 

the government should aid, counsel, assist, and protect the interests of small business concerns, and that the Small Business Administration, along with other Federal agencies, do their utmost to 

promote this directive. 

To increase competition and encourage a diverse makeup of 

small businesses participating in the Federal marketplace, the 

Small Business Administration manages a variety of procurement 

programs that are exclusive to small business. These small business programs allow a protective space for small entities to flourish 

and thrive, so that they may later rise to compete in the open market. 

Among these programs is the Women-Owned Small Business program, designed specifically to encourage growth in industries 

where women-owned small businesses are underrepresented. The 

purpose of the program is a noble one. However, in order to ensure 

that the goals of the program are fully realized, the Federal Government must make certain the integrity of the program is intact. 

Unfortunately, government watchdogs have discovered that this 

may not be the case. The Government Accountability Office and the 

SBA Office of Inspector General identified several deficiencies in 

SBA’s oversight of the Women-Owned Small Business program. 

First, the SBA significantly delayed adoption of two of the three 

critical changes to the Women-Owned Small Business program that 

were mandated by the fiscal year 2015 National Defense Authorization Act. The GAO pointed out that the SBA’s enactment of the 

sole-source authority without implementing the front-end certification program, or eliminating the self-certification option, may 

have exacerbated SBA’s existing oversight deficiencies. Given that 

the law was passed nearly 4 years ago, and the SBA just issued 

SBD026 with DISTILLER

4 

its proposed rule for the remaining changes 2 days ago, this egregious delay cannot be overstated. 

Let me be clear, the issuance of the proposed rule on May 14th 

does not absolve the SBA. The will of Congress was clear, and the 

SBA’s postponement is inexcusable. 

Furthermore, the GAO found that the SBA does not have adequate procedures in place to regularly monitor and assess the performance of third-party certifiers. This includes a lack of consistent 

compliance reviews and regular utilization of certifiers’ monthly reports. This lack of oversight may create situations where ineligible, 

or fraudulent firms participate in the Women-Owned Small Business program. 

The GAO has also found that the agency conducted few examinations assessing a firm’s eligibility in the Women-Owned Small 

Business program, and lacked a mechanism for evaluating its findings. This limits the agency’s ability to detect and prevent potential 

fraud. 

The SBA continues to rely heavily on competitors utilizing the 

protest process to identify potential fraud, as opposed to actively 

rooting out ineligible firms themselves, which is inadequate to protect the integrity of the Women-Owned Small Business program. 

Lastly, the GAO concurred with the previous SBA Office of Inspector General report that women-owned small businesses setaside contracts were awarded using improper industry codes. Unfortunately, the agency seems to take this matter lightly, stating 

that this issue has a minimal impact on the program’s purpose. 

While there are numerous deficiencies in the program, stakeholders did note positive aspects, specifically, that the program offers greater opportunities for women-owned small businesses. 

Today, I hope to understand the reasons why the SBA has not 

resolved its weakness and work with the administration to ensure 

that the program is operating efficiently, effectively, and with the 

utmost integrity moving forward. 

Thank you, Mr. Chairman, and I yield back. 

Chairman GOLDEN. Thank you, Mr. Stauber. The gentleman 

yields back. And if committee members have opening statements 

prepared, we would ask that they be submitted for the record. 

I would now like to introduce our witnesses. The first witness is 

Mr. William Shear, Director of GAO’s Financial Markets and Community Investment Team. He leads GAO’s work on community and 

economic development, small business, and Native American housing issues. As part of his portfolio, he oversees evaluations of the 

Small Business Administration’s contracting disaster assistance, 

credit and counseling programs. Mr. Shear joined GAO more than 

20 years ago. He has a master’s degree in public policy and a Ph.D. 

in economics, both from the University of Chicago. He also served 

as an adjunct faculty member in the graduate program in city and 

regional planning at the University of Pennsylvania. Welcome, Mr. 

Shear. 

Our second witness is Mr. Robb Wong, Associate Administrator 

of SBA’s Office of Government Contracting and Business Development since March of 2017. He has held multiple positions within 

the SBA. He started his career as an SBA attorney in the Office 

of the General Counsel, then was a Special Assistant U.S. Attorney 

SBD026 with DISTILLER

5 

in the Houston district office, and later was the SBA Acting District Director Counsel in the Lubbock district office—did I get that 

right? 

Mr. WONG. Lubbock. 

Chairman GOLDEN. Lubbock. 

Mr. WONG. Good enough. 

Chairman GOLDEN. All right. From 1996 to 2017, he was CEO 

for several small businesses that successfully use SBA’s products 

and programs to enhance growth. Mr. Wong is a graduate of 

Georgetown University Law Center. Welcome, Mr. Wong. 

Mr. Shear, you are now recognized for 5 minutes. 

STATEMENTS OF WILLIAM SHEAR, DIRECTOR, FINANCIAL 

MARKETS AND COMMUNITY INVESTMENT, UNITED STATES 

GOVERNMENT ACCOUNTABILITY OFFICE; ROBB N. WONG, 

ASSOCIATE ADMINISTRATOR, OFFICE OF GOVERNMENT 

CONTRACTING AND BUSINESS DEVELOPMENT, UNITED 

STATES SMALL BUSINESS ADMINISTRATION 

STATEMENT OF WILLIAM SHEAR 

Mr. SHEAR. Thank you. Chairman Golden, Ranking Member 

Stauber, and members of the subcommittee, I am pleased to be 

here this morning to discuss our recent work on SBA’s WomenOwned Small Business program. Congress authorized the program 

in 2000, allowing contracting offices to set-aside procurements to 

women-owned small businesses in industries in which they are 

substantially underrepresented. 

The 2015 National Defense Authorization Act changed the program by: one, authorizing SBA to implement sole-source authority; 

two, eliminating the option for firms to self-certify as being eligible 

for the program; and three, allowing SBA to implement a new certification process. 

Today, I will discuss: first, the extent to which SBA has implemented changes to the program, made by the 2015 NDAA; second, 

the extent to which SBA has implemented changes to address previously identified oversight deficiencies, including those we identified in our October 2014 report; and third, changes in the program’s use since 2011, including since the 2015 implementation of 

sole-source authority. 

First, SBA has implemented one of the three changes to the 

Women-Owned Small Business program authorized in the 2015 

NDAA. As of early May 2019, SBA had not eliminated the option 

for program participants to self-certify that they are eligible to participate as required by the 2015 NDAA. 

In October 2017, SBA officials stated that SBA was publishing 

a proposed rule. However, the following year, in June 2018, SBA 

officials state that a cost analysis would be necessary before the 

draft rule could be sent to the Office of Management and Budget 

for review. Two days ago, on May 14th, SBA published a proposed 

rule, as part of its process, to eliminate self-certification and implement a new certification process. 

Second, SBA has not addressed program oversight deficiencies 

and recommendations in our October 2014 report. For example, we 

recommended that SBA establish procedures to assess the performSBD026 with DISTILLER

6 

ance of the four third-party certifiers in accord with the requirements of the third-party certifier agreement and program regulations. 

We also made a recommendation to enhance eligibility examinations of businesses that register to participate in the program. 

While SBA generally agreed with our recommendations and conducted a compliance review of certifiers in 2016, it has not conducted another review of the certifiers since. 

Further, the implementation of sole-source authority, in light of 

these continued oversight deficiencies, can increase program risk. 

We maintain that our recommendations aimed at improving oversight should be addressed. 

In addition, our March 2019 report found that about 3.5 percent 

of contracts using a program set-aside were awarded for ineligible 

goods or services from April 2011 through June 2018. 

Moving to the third part of my discussion on changes in the program’s use since 2011, while Federal contractual obligations to all 

women-owned small businesses and program set-asides have increased since fiscal year 2012, WOSB program set-asides remain a 

small percentage. 

In fiscal year 2017, program contract obligations had grown to 

3.8 percent of contract obligations to all women-owned small businesses for program-eligible goods or services. This was about $713 

million. 

Chairman Golden, Ranking Member Stauber, and members of 

the subcommittee, this completes my prepared statement. I would 

be pleased to answer any questions that you may have. 

Chairman GOLDEN. Thank you, Mr. Shear. 

Mr. Wong, you are now recognized for opening statements for 5 

minutes. 

STATEMENT OF ROBB N. WONG 

Mr. WONG. Thank you. Mr. Chairman, Mr. Ranking Member, 

subcommittee members, thank you for the opportunity to testify 

today about the status of SBA’s compliance with GAO’s directive 

from my colleague, Mr. Shear, regarding the NDAA 15 and our 

compliance with the WOSB. On behalf of Mr. Chris Pilkerton, our 

Acting Administrator at SBA, we appreciate the opportunity to 

brief you on our progress. 

Some background first about our office. U.S. Government is the 

largest purchaser of goods and services. Spends about $450 to $500 

billion a year. We work collaboratively with all branches of government and small business professionals to make sure the opportunities for small business are present. We make sure that 23 percent 

of the money spent by government goes to small business. 

So—I also have some goals in that the goals in general are to 

make sure that our certifications are more useful to both small 

businesses and to government. And if we do that, then you will 

drive demand for the certifications, and you will increase contract 

awards to small business. 

Most importantly, we hold the public trust that when a contract 

is awarded to an SBA-certified small business, that they are qualified to receive it. We appreciate the assistance from GAO, and particularly Mr. Shear, who has been our colleague working with us 

SBD026 with DISTILLER

7 

to improve our quality control and compliance. In both 2017 and 

2018, due to the improvements in policy and processes in our programs, we have exceeded the 23 percent goal for the fifth and sixth 

consecutive years. 

More importantly, government has increased its spending with 

small businesses by almost 22 percent more than ever in history. 

This has meant more contracts for small businesses, and more importantly, more jobs for Americans. There has never been a better 

time to be a small business, government contractor. 

Our small business certifications are effectively our products. 

Business demands them, and government wants to use SBA-certified companies to solve their challenges. 

My office administers four socioeconomic programs: the 8(a) program, which you may know, which has been the backbone of our 

office, it is a 30-year-old program for socially and economically disadvantaged individuals. 

We have the HUBZone program which is also—it is for historically underutilized business zones. It is more or less like an economic development program. So it is not only designed to help the 

business but also a poor area. This program has historically also 

been broken. We have tried to fix that. 

Finally, I should also mention that the 8(a) program and the 

HUBZone program have certification processes whereby we do two 

things: We certify people when they get into the program, but more 

importantly, we continue to evaluate their qualifications after they 

get in, okay? I will get into the volume in a second. 

The WOSB program and the Service-Disabled Veteran programs 

are also what we look at. Those are self-certification programs 

which have, for lack of—we have significantly less oversight of 

those programs. Okay. Compared to 8(a) and HUBZone, I think the 

WOSB program, as it stands today, and prior to 2017 when I came 

in, as well as the SDVOSB program are more or less on the honor 

system. Okay. As you found and as you have alluded to, some people don’t follow that, and I get that. 

Just to back up for a minute, I have been aware of these programs since I have been 15 years old. I worked with the SBA. One 

of the SBA’s first 8(a) programs, okay, I packed the things in the 

warehouse, okay? Then I ran my own companies, went to school. 

I came to SBA for 10 years. I wrote regulations for these programs, 

and I administered these programs earlier. Then for the last 20 

years, I had my own company, and I supported up to 15 other companies, growing them, growing jobs through these programs. I take 

my job very, very seriously. 

Within the first month after I was briefed on the current state 

of the programs, I was advised and immediately concerned that the 

NDAA 15 had directed us to implement a formal certification for 

WOSB. I learned essentially that nothing had been done. 

I also learned that while the responsibility had been directed, no 

funding was appropriated. As I testified before here at the HSBC, 

I am a lawyer, and I believe that we must comply with the law. 

After some analysis of size and volume, I learned that WOSB was 

about three times the size of our existing 8(a) and HUBZone programs. 

SBD026 with DISTILLER

8 

Concurrently, we were also being asked at the time to bring on— 

possibly bring on the VA’s SDVOSB program, also a formal certification, and to combine it with our own. And the size of that program was similar to WOSB, three times what we were already 

doing with 8(a) or with HUBZone. I testified about this earlier last 

year. 

In short, the problem is one of scale. And so, when we look at 

things, why haven’t we complied with Mr. Shear’s directives, the 

answer was, based on the way that we were operating, we couldn’t. 

So in general, it was a problem of scale. We were faced with a predicament that our volume of processing presently, with 8(a) and 

HUBZone, was 3,500 applications a year, and it was also 10,000 

annual reviews. 

So it is 3,000—2,000 applications, as an example, for 8(a), but 

you have 5,000 active companies that are already in the program. 

So we have to approve the applications, and once you are in, we 

have to continue to certify your eligibility, to make sure again, with 

the public trust, that when SBA-certified company receives a contract, they are qualified. 

So, the volume we were faced was 3,500 applications in, with 

10,000 annual reviews. And we had to figure out, if we had to add 

both WOSB and NVA, we would move to a volume of 35,000 applications, and up to 40,000 annual reviews. I should note that we 

also didn’t get any funding, and we also—and we were also not getting any more staff. 

What we also realized was that status quo was not an option, but 

to me, neither was standing still. I can’t tell you what happened 

before, but I can tell you what I did ever since I have been in office. 

We decided to get to work. We decided to reengineer our process 

using 8(a) as the backbone for all certifications because it has been 

our best tested program, it has been the most used program by government, and it has been the most helpful to government. 

We decided that the first thing we needed to do, before we did 

anything, was to come up with a blueprint, or a plan of action, for 

staffing, funding, that would serve us today and in the future. The 

blueprint emphasized unifying the common elements of eligibility 

and standardizing their processes and analysis. 

We could process all applications as similarly as possible, and reduce their variation as much as possible. It would retain their 

quality and help to ensure the public trust. 

Good news. The main part of the blueprint has recently been 

completed. It will soon be finished entirely. But with that bit of 

completion, we were able to, again, attack the questions and concerns that Mr. Shear has raised. This necessary blueprint was the 

first step for giving us clarity about our present state, and also for 

future funding and staffing and production needs. It would have 

been irresponsible, prior to this point, to have made any such requests for staffing or funding without this blueprint. Most importantly, the blueprint has also guided us in establishing how we 

would address the concerns of NDAA 15 and the best way to address Mr. Shear’s concerns. 

In that regard, a proposed rule, establishing the formal certification program, was filed on May 9th, and it was published a couple days ago. Based on the rulemaking process, we estimate June 

SBD026 with DISTILLER

9 

of 2021 before the actual implementation of the certification program. We have begun the process of meeting with third-party certifiers, and we have established a schedule to meet with them regularly and periodically. 

We are moving in the right direction, as quickly and responsibly 

as we can, and certainly within the first month of me taking office. 

We will continue to work diligently and to comply with the law, 

and with you and—with your and Mr. Shear’s directions. 

This has not been a fast process, admittedly, but it is necessary. 

It is the smart thing to do. If we are making good progress—we are 

making good progress. It has and will remain top of mind for me 

until it is done. There is a lot of work still to be done. 

I have been blessed to work with a strong leader, Mrs. McMahon, 

and now Mr. Chris Pilkerton, who support our actions, with our 

deputy, Barb Carson, whose support and co-leadership is invaluable to our team, now and in the future, and to our agency. And 

with a team of coworkers who has believed in our vision, and upon 

whose experience and efforts are the backbone of our office, we 

have made significant progress in advancing policy, processes, to 

deliver a more effective program to small businesses and government. 

This is just a brief glimpse of where we are and what we have 

been doing over the last 2 years, to the WOSB program, and to all 

of our programs, and I am ready to answer any questions you may 

have. 

Chairman GOLDEN. Thank you very much, Mr. Wong, for that 

opening testimony. And we will now move to questions from the 

committee, and I will begin by recognizing myself for the first 5 

minutes. 

Mr. Wong, I appreciate what you had to say here in laying out 

how you have been working on implementation of this requirement 

from Congress since you came into this role in 2017. One of my favorite leaders that I have followed closely, Colin Powell, has this 

wonderful saying that I try and stick by, which is, after 30 days 

in a new position, you own it. That is the departure line from 

which you don’t get to make excuses for the problems that were left 

for you to take over. So I was encouraged to hear you say, within 

a month, that you were beginning to try and move forward with 

these changes and reviewing some of the recommendations of GAO 

as well. 

You can’t necessarily speak for the decisions of your predecessor. 

I make the assumption that a decision was made at SBA to go 

ahead and move forward with the first part, which was allowing for 

the sole-source authority in order to maximize the economic opportunities for women-owned small businesses as quickly as possible, 

and then to look secondly at the self-certification piece. 

I think the problem being that it has taken so long. It has left 

quite a wide window there where we are increasing opportunities. 

You know, we are also leaving the program and the integrity of the 

program at risk. And I understand you are trying to find the right 

balance to not push people away from trying to get that certification and participate and bid, while, you know, at the same time, 

trying to find ways to make sure that the program is not being 

abused is very important. 

SBD026 with DISTILLER

10 

My gut instinct would be that this—some of these problems that 

we have talked about, whether it be oversight of third-party certifiers, oversight of program participants, or use of the WOSB program, under ineligible NAICS codes, in many ways, had to do with 

staffing shortages, with funding shortages, with a lack of technology and the resources needed to upgrade them, and things of 

that nature. So I appreciate that you are saying that you had to 

take time to look and see what those resources were. I would have 

encouraged SBA to try and move more quickly on that. 

And with that, I would just open it up to you to maybe lay out, 

in your opinion, having done that review, what are the staffing 

needs? What are the technology upgrade needs, or challenges that 

you face? And what additional funding do you need to successfully 

move forward with the intent of the law passed by Congress in 

2015, under the NDAA, and what resources do you need to do it, 

as best as possible? 

Mr. WONG. Thank you for the opportunity, and I am going to 

probably disappoint you. I don’t know. We have to—we have to 

generally look, what we try to do—it isn’t a flippant answer. We 

have come up with the blueprint of how we want to do this in general. In general, what I tried to do is to satisfy—is to comply with 

the law, with the amount of people that we have, and within the 

budget that we have, okay? The utopian scenario would be that we 

have perfect—we have perfect intakes of all qualified small businesses, and that we can give everyone an annual review, just as 

rigorously each time every year. With the existing staffing levels 

that we have, we cannot. 

So we are doing additional things. We are doing risk-based analysis. We are trying, again, to do as much quality as we can. We 

are not making a sacrifice to quality. Okay? That may happen. We 

can be criticized on the amount that we are doing and the vigilance 

that we are doing, but I can guarantee that we are trying to do everything we can without asking for help. We will use the blueprint 

which we have, the original one. So we are getting staffing levels 

and we are getting what I think are more responsible requests for 

budget together. 

To put it a different way, I think that the law, based on how it 

looked, it assumed we would just simply set up another silo. So in 

our office, as an example—we have roughly 50 people within our 

office—we utilize up to—with the entire process for 8(a), we probably use close to—more than 100, including people in the field, just 

to administer a program for 5,000 active applicants, okay? That is 

the one that is the best, where we have a rigorous intake process, 

and then we have a rigorous annual recertification—or excuse 

me—it is a continuing eligibility. 

We are faced with, if it was only setting up a silo, again, for the 

WOSB program, based on the volume, and based on the number of 

common elements that are common in terms of eligibility for 

WOSB and for the 8(a) program, we would have to increase the 

staff, and we would—by three times, okay? I was quickly apprised 

by our CFO, no. So I think that the easy thing would have said, 

Well, what can we do? Well, I am not like normal people. I figured 

we will find a way, or we will make one. And that is why I am so 

SBD026 with DISTILLER

11 

grateful for the team that we have, because they are willing to accept that vision, I said, we can’t do nothing. 

You know, the American public needs our certifications. Put a 

different way, if we don’t hold the public trust, they will take the 

programs away. What good are they? And, so, we need to make 

sure, again, maybe as a lawyer, but we need to make sure, just like 

with 8(a), we want to turn all of our programs in with that same 

standard. 

But we are trying to do everything that you are asking us to do. 

Most of the things you are asking us to do, as an example, are already in the 8(a) program. The challenge, again, is to move basically for something that is anywhere from six to 10 times larger 

than what we are doing with the people we have, and that is what 

the blueprint is helping us to do. We are going—effectively, instead 

of horizontal silos, we have turned it into a processing shop, so that 

the people that we have, and the analysts that we have, and the 

different levels of analyst that we have, can process all applications. And they can do it today with HUBZone and 8(a), but then 

as we take on WOSB or—and if we take on Service-Disabled Veterans, we should be okay. 

At that point, though, we don’t have a number, and we don’t 

have staffing. But initially, I remember that when we had originally asked, in the previous hearing, for how we would look at all 

of the processing, it was a very, very large—— 

Chairman GOLDEN. I will stop you there, sir. Knowing that we 

got a few other members that are going to want to ask some questions, and not knowing what their timeline is, I am going to go 

ahead and turn it right over to the Ranking Member, Mr. Stauber. 

Thank you. 

Mr. STAUBER. I thank you, Mr. Chair. 

Mr. Shear, Mr. Wong, thanks for your testimony. You both have 

a lot of experience. There is no doubt about it. 

So, Mr. Wong, you have only been in this position for a couple 

years. Couple of questions. The GAO report indicates the new certification process will be in place by January 1, of 2020. Did you 

just say 2021? 

Mr. WONG. Yes, sir. 

Mr. STAUBER. Okay. I want you to look from the women-owned 

businesses across this country. This is the frustrating thing that 

they are seeing. Because all it takes, Mr. Wong, is one or two 

fraudulent businesses to take the legitimacy out of a woman-owned 

business for contracts, et cetera. It is just purely unacceptable. And 

I am not blaming you. I like when your boss says, ‘‘make it happen.’’ And I think you have articulated kind of how you are going 

to get there. But 5 years later, after Congress asked you to put this 

forward, this is a problem. And I am glad you are in your position 

right now, to be able to say, ‘‘we are going to do something.’’ But 

to me, it is unacceptable. From northern Minnesota, this is simply 

unacceptable, the timeline, that when Congress enacts that legislation, we ask that the small business folks, take it and bring it 

across the country. 

As we always talk in this committee, Mr. Wong, that small businesses are the engine of our economy, we need this quicker. Because I don’t want any businesses owned—legitimately owned by 

SBD026 with DISTILLER

12 

women, to go out of business because of inaction by you or anybody 

else in your office. 

So I am disappointed that it is—you gave the answer 2021. I believe it is the truthful answer, but I want you to know that the 

women-owned business across this country are not going to be 

happy about that. And to me, it is unacceptable. I am not putting 

blame on you. 

The second thing is, has the Small Business conducted a cost 

analysis of the 2015 NDAA SB women-owned, small business certification program, and if so, what did the agency find? 

Mr. WONG. Okay. So to your second point first, this is—we will 

just get the bad news out of the way. In operating a business—it 

is what I know how to do—we have got to be able to, first, understand how to define success, and then how to measure it, right? 

And so that is why this blueprint has been so important. We have 

had to basically take—based on the volume that we are getting— 

and I want to make this clear, it is not an excuse, it is an explanation—we can’t use the mechanisms that we—we can’t use the 

processes that we have been doing before. 

Mr. STAUBER. And so to that, are you going to explain the 

changes? 

Mr. WONG. Yes. 

Mr. STAUBER. Go ahead. 

Mr. WONG. So we have kind of had to, you know, at least on 

the blueprint, we have to tear down what we have done before. We 

have to break down those silos. We have to take people—for example, you have common elements. In 8(a), you have roughly nine elements of eligibility; WOSB has eight of those same elements. So, 

in my opinion, if you look at ownership and control as two of the 

elements which are critical for, are you the person that you say you 

are, and are you qualified? We need to get the same answer. We 

need to get it quickly from the same analyst. But we have an analyst sitting over here that doesn’t talk to an analyst over here. 

But so what I think in general—and then we have people that, 

the process we would do is, they do it from start to finish. There 

are different grade levels, different abilities. Well, some people are 

good at handling, you know, I am a fat guy, so I will just use this 

example. I am really good at eating dessert, okay? But if you gave 

me a full meal, I will take 10 hours because I can’t get through the 

vegetables. All right? If you break these teams up into what they 

are good at, and if you make it common as possible, and you can 

set up a system, so that they can look and see what they have to 

do for the analysis, it goes much better. None of that was here. 

So I had to—you know, with our team, we had to come up with 

that, okay? So, God bless Barb Carson. She is the one that is shepherding through this blueprint. The blueprint will be here while I 

am here and in the future for all of our SBA employees. We have 

people there that have devoted their careers to this, more than 20 

years each for this. That is how long they been there with a broken 

system. We are trying to rebuild this system in a new way that is 

more efficient and help them so that we can get this volume. 

So to your point, we are doing the cost analysis and the staffing 

analysis. I would love another opportunity to come back and make 

an ask, and I would love to have your support. 

SBD026 with DISTILLER

13 

Mr. STAUBER. Mr. Wong, that brings me to my second question. 

Does the SBA know what staff resource levels are necessary to 

fully operate this program? 

Mr. WONG. We are getting there. 

Mr. STAUBER. Okay. 

Mr. WONG. And to the point, just so that you know, with the 

current level we have, we are basically trying to increase their 

workload by six times, okay, with a thank you very much, I appreciate you, okay? We are going to try and do as much as we can. 

We can’t do all of it, but we will get some of it done, ever mindful 

of the responsibilities we have to the women business owners, to 

the minority business owners, to the historically underutilized 

business owners, and the public trust, okay? It is a slow process, 

and I am sorry to say, but it is my best estimate. I would rather 

have you flay me in public, because I am strong enough, I can take 

it. I think the system will work. 

Mr. STAUBER. Thank you, Mr. Wong. 

Mr. Chair, I yield back. 

Chairman GOLDEN. Thank you, Mr. Stauber. 

I would now go ahead and recognize Mr. Marc Veasey for 5 minutes. 

Mr. VEASEY. I thank you, Mr. Chairman. 

I wanted to ask about women and the loans that they receive. 

I know that, obviously, that that is a big deal with SBA, women 

being able to receive loans and have access to capital. When you 

ask women entrepreneurs one of the reasons why they can’t expand 

their business, it is access to capital, with lots of smaller, minorityowned businesses. I believe that women received about—women 

make up about 30 percent of small businesses in the country, but 

received about 17 percent of the SBA-backed conventional loans. 

What are you all trying to do to help that number out a little bit? 

And I believe out of the total dollars that were given out, that 

women-owned businesses only received about 4.4 percent of those 

with SBA conventional loans, and I was just curious what you all 

were doing to address that issue? 

Mr. WONG. Thank you for that question, sir. The loan policies 

and programs—I can give you an anecdotal answer. The loan policies and programs are handled by OCA, Mr. Manger. But I can tell 

you that the way that we would help women to get loans is by getting more contracts for them, and more opportunities, okay? 

So, what I told the committee previously, and I will reiterate 

here, with my team’s efforts while we are doing all of these things 

together, over the last 2 years, I am very proud to say that through 

their efforts, we have grown small business opportunities by 22 

percent. By any measure of a market, I think that is a great job. 

Mr. VEASEY. Twenty-two percent for women? 

Mr. WONG. No, 22 percent overall. So, historically, before I came 

to office, historically, the government had spent about $99.9 billion 

with small business, I believe in 2013 or 2014. In 2017, we raised 

that historical number to $105 billion, and last year, 2018, we 

raised it again to $121 billion. 

So there are more opportunities for small businesses, and, particularly, for women-owned small businesses, but if—generally, 

how I would run a business is that if you can get these contracts 

SBD026 with DISTILLER

14 

you are more creditworthy, and then you have more access to 

loans. 

Mr. VEASEY. Do you have any way to break down exactly what 

percentage that you just pointed out, of those moneys were received 

by women? 

Mr. WONG. I could ask. I don’t carry—we don’t calculate that in 

our office, but I can certainly get that information. 

Mr. VEASEY. And in areas where you all have had success in 

working with women businesses, like with the MicroLoan Program 

that the SBA runs, I believe that women-owned businesses received 

about 57.4 percent, according to one study that I saw, of the successful MicroLoan Program that you guys run. Have you looked at 

ways how you could expand those sorts of programs where women 

have—women-owned businesses have shown to be very successful? 

Mr. WONG. In general, that is a great idea. We haven’t looked 

at it that specifically, but I can tell you that we have looked at— 

we have looked at loans, we have looked at counseling, and we 

have looked at contracting. And I think that we need to do—we are 

doing a better job of cross-pollinating our areas together, because 

I think that SBA as a whole, if you look at us as a community, you 

know, in theory, you get counseling, you go into business, get contracts, and then you use loans to continue to grow, okay? 

Mr. VEASEY. I would ask in, you know, the last minute that I 

have if, you know, when you come back, or if you could get back 

to the committee at a future date, with something in writing on the 

feasibility of being able to expand those programs where women 

are already doing well, I think that would be really great. I think 

that would be good data for the committee to see. I know I would 

like to see it. 

Mr. WONG. Okay. 

Mr. VEASEY. Thank you. 

Mr. Chairman, I yield back. 

Chairman GOLDEN. Thank you very much. I wanted to go 

ahead and shift gears a little bit in a second round of questions. 

Mr. Shear, could you just talk a little bit, from your perspective 

and the work that you did, reviewing this program at the request 

of this committee. What are some of the difficulties that you think 

have led to the delay in moving forward with these new requirements of SBA? 

Mr. SHEAR. You are asking an excellent question, and I am 

going to do my best to answer, but some of it is a mystery to me 

and our team members. We were told, now almost 2 years ago, that 

SBA was about 1 or 2 months away from having a proposed rule. 

And we couldn’t see how much progress had been made within the 

agency on that. We also knew that the person who was the director 

of Government Contracting and Business Development had taken 

actions, such as the review of the—the one-time review of the 

third-party certifiers, and certainly stated the intent to make that 

an ongoing process, and to try to address our recommendations. 

So in a sense, when we were looking—like, in 2017, we saw a situation where the agency was moving forward. Then—so the idea 

that a month or two might have been too ambitious, but then we 

were told it is going to take the agency longer to do that and there 

is a new director of the program. And when we were told it is going 

SBD026 with DISTILLER

15 

to take longer, we asked for simple things like, Do you have a 

project plan? Do you have a project plan with timelines? 

Because the steps in rulemaking are pretty straightforward. We 

did a report 2 years ago on this office and the rulemaking process 

and the steps that go into it and how much time it takes. So why 

couldn’t the agency give us timelines? So, I don’t know what was 

going on behind the scenes and weather there were any disagreements within the agency, so I can’t speak to that. 

Now, I first saw the proposed rule in draft form last Wednesday 

and read through it, as did members of my team. In looking at it, 

I am not going to comment directly on the proposed rule, because 

the public-comment process is a very important one, and we don’t 

interfere with that. But in reading it, I am still at a loss to try to 

figure out why this proposed rule took so long to complete. And 

part of it is the failure of SBA just to say to us, What steps are 

you going through to complete this rule? That is like bread-andbutter type questions we always ask, especially when timelines are 

involved. So the agency really hasn’t been responsive to us. And so 

it is a mystery. 

Chairman GOLDEN. Thank you for that. 

I am going to go ahead and recognize Mr. Stauber. 

Mr. STAUBER. I thank you, Mr. Chair. 

Mr. Shear, you just reiterated the frustration in what greater 

America has in some of the inadequacy of our government. 

Mr. Wong, the SBA operates programs that are authorized—unauthorized by Congress. Given the lack of funding and resources 

you have referenced, can the SBA go back and try to reallocate 

some of the resources which are going to unauthorized programs, 

to congressionally mandated programs, like WOSB? 

Mr. WONG. At least as regards WOSB, we went to our CFO, and 

the answer was that they could not provide the level of funding 

that at the time, when we had asked them about setting up another silo, they said Absolutely not, we don’t have that funding. 

Whether it can be reallocated, I don’t know. I leave that up to the 

CFO. He, generally, had been somebody that if we needed help and 

he could do it—I don’t know what he does, but, you know, I don’t 

know. But I know that we asked, and I know that the answer was 

no. 

Mr. STAUBER. I yield back. 

Chairman GOLDEN. So, just listening to all this, Mr. Wong, I 

just want to, you know, state, and maybe ask—and I think we can 

follow up with some of this in writing—I would just make note that 

you pointed out in your testimony, in some of your responses to the 

questions, it sounds to me that there are concerns about new requirements, without additional resources and funding. And, you 

know, I think that you are a mission-oriented person. You want to 

get the job done, you want to do it right, you want to do it the very 

best that you can. 

Congress told SBA to go ahead and do something, and you were 

trying to do it within existing resources without asking for more of 

them, which I understand. And I think Mr. Stauber was spot on 

when he talked about the concerns about the damage that can be 

done when something like this takes too long, to the integrity of 

the program, and the impact it can have on the women-owned 

SBD026 with DISTILLER

16 

small businesses who should be competing, and should be winning 

these opportunities to contract with the government. I would just 

point out that, from my perspective, at some point, there is a responsibility for SBA to provide, back to Congress, whatever issues 

there are that are holding them back from moving forward with 

implementation in a timely manner. 

You know, it seems you are describing an interaction internally 

within SBA where people are saying no. Certainly, it is dependent 

upon us to ask these questions to give you the opportunity to come 

back to and tell us what you need, and that is what we are doing 

right now. 

So, I would ask that we get something back in writing, detailing 

exactly what is the cost in moving forward with the self-certification, with the certification, you know, process that is required of 

third-party certifiers? What resources do you need in order to move 

forward and do so, you know, appropriately? 

So, you know, we will follow up with something in writing and 

ask for that back, but, really, I think that is, you know, the politics 

of what something costs in taxpayer dollars, I think, belongs rightfully up here among these members and in Congress, to talk about 

whether or not we should be spending more to move forward with 

something like this. And so, you know, I appreciate the feedback. 

Mr. STAUBER. Thank you, Mr. Chair. Just wanted to say thank 

you to you both. Mr. Wong, it is not a great seat to sit in today, 

you know, but with your experience, and I really appreciate your 

honesty, and that is the feedback we need. But please know that 

the concerns for women-owned small business is a priority for us, 

and please, as Chairman Golden talked about, please come back 

with those written statements on how we are going to go forward 

in a manner that is extremely timely, and your—you know, I have 

faith in your experience that you will come back and break down 

those silos and make it work. So I thank you to you both. 

I yield back. 

Chairman GOLDEN. I think I would add to that, too, Mr. Wong, 

if we could—and I think we may have already requested this, but 

just in case, as well, we would request in writing a timeline for implementation of the program, how you intend to complete this work 

by January of 2021. I think we noted originally in the committee 

information that it was January of 2020. I don’t know if that is, 

you know, incorrect information. It slid a year. That is fine, but 

let’s see the timeline on paper so we can continue to do the oversight that is necessary. And we want to work with you to make this 

work. 

With that, I would just go ahead with a closing statement. The 

Women-Owned Small Business program aims to expand contracting opportunities for women, but as we have heard today, untimely implementation of reforms, coupled, at times, with nonexistent oversight, threatens to defeat congressional intent. Women 

entrepreneurs and the business they own have been, and will continue to be, a driving force in our economy. 

Competing in the Federal marketplace is an integral part of the 

role that they play. And as we seek for ways to improve this program, we look forward to working with SBA to ensure that these 

and future reforms are implemented. 

SBD026 with DISTILLER

17 

I would ask unanimous consent that members have 5 legislative 

days to submit statements and supporting materials for the record. 

Without objection, so ordered. And if there is no further business 

to come before the committee, we are adjourned. Thank you. 

[Whereupon, at 11:02 p.m., the Subcommittee was adjourned.] 

SBD026 with DISTILLER

18 

A P P E N D I X 

SBD026 with DISTILLER


Insert offset folio 18 here 36318.001

For Release on Delivery 

Expected at 10 a.m. ET 

Thursday, May 16, 2019 

GA0-19-563T 

United States Government Accountability Office 

Testimony 

Before the Subcommittee on 

Contracting and Infrastructure, 

Committee on Small Business, House of 

Representatives 

WOMEN-OWNED SMALL 

BUSINESS PROGRAM 

Actions Needed To 

Address Continued 

Oversight Issues 

Statement of William B. Shear, Director, Financial 

Markets and Community Investment 
19 

SBD026 with DISTILLER


Insert offset folio 19 here 36318.002

WOMEN-OWNED SMALL BUSINESS PROGRAM 

Actions Needed to Address Continued Oversight 

Issues 

What GAO Found 

The Small Business Administration (SBA) has implemented one of the three 

changes to the Women~Owned Sma!i Business (WOSB) program authonzed in 

the National Defense Authorization Act of 2015 (2015 NDAA). In September 

2015 SBA published a final rule to implement sole~source authority (to award 

contracts without competition). effective October 2015. As of early May 2019, 

SBA had not eliminated the option for program participants to self~certify that 

they are eligible to participate, as required by the 2015 NDAA. SBA officials 

stated that the agency intended to address the third change made by the 2015 

NOAA (meaning implement a new certification process for the WOSB program). 

SBA has not addressed WOSB program oversight deficiencies and 

recommendations in GAO's 2014 report (GA0-15-54) For example, GAO 

recommended that SBA establish procedures to assess the performance of four 

third-party certifiers-private entities approved by SBA to certify the eligibility of 

WOSB firms. While SBA generally agreed with GAO's recommendations and 

conducted a compliance review of the certifiers in 2016. it has no plans to 

regularly monitor their performance. By not improving its oversight, SBA is 

limiting its ability to ensure third~party certifiers are following program 

requirements. Further, the implementation of sole-source authority 1n light of 

these continued oversight deficiencies can increase program risk GAO 

maintains that its recommendations aimed at improving oversight should be 

addressed. In addition, GAO's March 2019 (GA0-19-168) report found that about 

3.5 percent of contracts using a WOSB set-aside were awarded for ineligible 

goods or services from April 2011 through June 2018. At that time. SBA was not 

reviewing contracting data that could identify which agencies may need targeted 

training. GAO recommended that SBA review such data to help address 

identified issues In early May 2019, SBA said it had initiated such efforts 

While federal contract obligations to all women-owned small businesses and 

WOSB program set-asides have increased since fiscal year 2012. WOSB 

program set-asides remain a small percentage (see figure) 

Obligations for the Women-Owned Small Business Program and to All Women-Owned Small 

Businesses in Similar Industries, Fiscal Years 2012-20r1±-7-._.,_---------, 

States Government Accountability Office 
20 

SBD026 with DISTILLER


Insert offset folio 20 here 36318.003

Chairman Golden, Ranking Member Stauber, and Members of the 

Subcommittee: 

I am pleased to be here today to discuss our recent work on the WomanOwned Small Business Program (WOSB program). Congress authorized 

the WOSB program in 2000, allowing contracting officers to set aside 

procurements to women-owned small businesses in industries in which 

they are substantially underrepresented. On October 7, 2010, the Small 

Business Administration (SBA) issued a final rule to implement the WOSB 

program, and the program began operating in 2011. To be eligible to 

participate in the WOSB program, firms have the option to self-certify or 

be certified by a third-party certifier. However, the 2015 National Defense 

Authorization Act (2015 NOAA) changed the WOSB program by (1) 

authorizing SBA to implement sole-source authority, (2) eliminating the 

option for firms to self-certify as being eligible for the program, and (3) 

allowing SBA to implement a new certification process. 

Today I will discuss (1) the extent to which SBA has implemented 

changes to the WOSB program made by the 2015 NOAA; (2) the ex1ent 

to which SBA has implemented changes to address previously identified 

oversight deficiencies, including those we identified in October 2014: and 

(3) changes in WOSB program use since 2011, including since the 2015 

implementation of sole-source authority. 1 My statement is based on our 

March 2019 report. 2 For that report, we reviewed relevant laws, 

regulations, and program documents: analyzed federal contracting data 

from April 2011 through June 2018; and interviewed SBA officials, 

officials from contracting agencies selected to obtain a range of 

experience with the WOSB program, and three of the four private thirdparty certifiers. 

The work on which this statement is based was performed in accordance 

with generally accepted government auditing standards. Those standards 

require that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence obtained 

1

GAO, Women~Owned Small Business Program: Certifier Oversight and Additionaf 

Efig1bility Controls Are Needed, GA0-15-54 (Washington, D.C.: Oct 8, 2014). 

2GAO, Women-Owned Small Business Program: Actions Needed to Address Ongoing 

Oversight Issues. GA0-19-168 (Washington, D.C.: Mar. 14. 2019) 

Page 1 GA0-19-563T Women-Owned Small Business Program 
21 

SBD026 with DISTILLER


Insert offset folio 21 here 36318.004

Background 

provides a reasonable basis for our findings and conclusions based on 

our audit objectives. 

Federal agencies conduct a variety of procurements that are reserved for 

small business participation through small business set-asides. These 

set-asides can be for small businesses in general, or they can be specific 

to small businesses that meet additional eligibility requirements in the 

Service-Disabled Veteran-Owned Small Business, Historically 

Underutilized Business Zone (HUBZone), 8(a) Business Development 

(8(a)), and WOSB programs. The WOSB program enables federal 

contracting officers to identify and establish a sheltered market, or setaside, for competition among women-owned small businesses (WOSB) 

and economically disadvantaged women-owned small businesses 

(EDWOSB) in certain industries. 3 WOSBs can receive set-asides in 

industries in which SBA has determined that women-owned small 

businesses are substantially underrepresented. To determine these 

industries, SBA is required to conduct a study to determine which North 

American Industry Classification System (NAICS) codes are eligible 

under the program and to report on such studies every 5 years. 

Additionally, businesses must be at least 51 percent owned and 

controlled by one or more women who are U.S. citizens to participate in 

the WOSB program. The owner must provide documents demonstrating 

that the business meets program requirements, including a document in 

which the owner attests to the business's status as a WOSB or 

EDWOSB. According to SBA, as of early October 2018, there were 

13,224 WOSBs and 4,488 EDWOSBs registered in SBA's online 

certification database. SBA's Office of Government Contracting 

administers the WOSB program by, among other things, promulgating 

regulations and conducting eligibility examinations of businesses that 

receive contracts under a WOSB or EDWOSB set-aside. According to 

SBA, as of October 2018, there were two full-time staff within the Office of 

Government Contracting whose primary responsibility was the WOSB 

program. 

3

Throughout this statement, we use the abbreviation "WOSB" to refer specifically to 

women-owned smaH businesses that have been certified as eligible for the WOSB 

program. Economically disadvantaged is a determination made if a woman can 

demonstrate that her ability to compete in the free enterprise system is impaired due to 

diminished capita! and credit opportunities as compared w1th others in the same or similar 

business 

Page 2 GA0-19-563T Women-Owned Small Business Program 
22 

SBD026 with DISTILLER


Insert offset folio 22 here 36318.005

Initially, the program's statutory authority allowed WOSBs to be selfcertified by the business owner or certified by an approved third-party 

national certifying entity as eligible for the program. Self-certification is 

free, but some third-party certification options require businesses to pay a 

fee. Each certification process requires businesses to provide signed 

representations attesting to their WOSB or EDWOSB eligibility. 

Businesses must provide documents supporting their status before 

submitting an offer to perform the requirements of a WOSB set-aside 

contract. In August 2016, SBA launched certify.sba.gov, which is an 

online portal that allows firms participating in the program to upload 

required documents and track their submission and also enables 

contracting officers to review firms' eligibility documentation. 4 According 

to the Federal Acquisition Regulation, contracting officers are required to 

verify that all required documentation is present in the online portal when 

selecting a business for an award. In addition, businesses must register 

and attest to being a WOSB in the System for Award Management, the 

primary database of vendors doing business with the federal government. 

In 2011, SBA approved four organizations to act as third-party certifiers. 

According to SBA data, these four third-party certifiers completed a total 

of about 3,400 certifications in fiscal year 2017. 5 

In 2014 we reviewed the WOSB program and found a number of 

deficiencies in SBA's oversight of the four SBA-approved third-party 

certifiers and in SBA's eligibility examination processes, and we made 

related recommendations for SBA. 6 In addition, in 2015 and 2018 the 

SBA Office of Inspector General (OIG) reviewed the WOSB program and 

also found oversight deficiencies, including evidence of WOSB contracts 

set aside for ineligible firms. In both reports, the SBA OIG also made 

4

According to SBA, the agency plans to move other certifications, such as those of the 

S{a) and HUBZone programs, into the new system and allow documents uploaded for one 

program to be reused for another. 

5

To become an SBA~approved third-party certifier, interested organizations submitted an 

application to SBA that contained information on the organization's structure and staff, 

pol1cies and procedures for certification, and attestations that they wi!! adhere to program 

requirements 

6GA0-15-54 We made two recommendations to improve SBA's oversight of the WOSB 

program. As of early May 2019, these recommendations remained open. 

Page 3 GA0·19·563T Women-Owned Small Business Program 
23 

SBD026 with DISTILLER


Insert offset folio 23 here 36318.006

SBA Has 

Implemented One of 

the Three Changes 

Made by the 2015 

NOAA 

recommendations for SBA. 7 Further, in July 2015, we issued GAO's fraud 

risk framework, which provides a comprehensive set of key components 

and leading practices that serve as a guide for agency managers to use 

when developing efforts to combat fraud in a strategic, risk-based way. 8 

As of early May 2019, SBA had implemented one of the three changes 

that the 2015 NOAA made to the WOSB program-sole-source authority. 

The two other changes-authorizing SBA to implement its own 

certification process for WOSBs and requiring SBA to eliminate the 

WOSB self-certification option-had not been implemented. 9 The 2015 

NOAA did not require a specific time frame for SBA to update its 

regulations. SBA officials have stated that the agency will not eliminate 

self-certification until the new certification process for the WOSB program 

is in place, which they expect to be completed by January 1, 2020. 

In September 2015, SBA published a final rule to implement sole-source 

authority for the WOSB program (effective October 2015). 10 Among other 

things, the rule authorized contracting officers to award a contract to a 

WOSB or EOWOSB without competition, provided that the contracting 

officer's market research cannot identify two or more WOSBs or 

EOWOSBs in eligible industries that can perform the requirements of the 

contract at a fair and reasonable price. In the final rule, SBA explained 

that it promulgated the sole-source rule before the WOSB certification 

requirements for two reasons. First, the sole-source rule could be 

accomplished by simply incorporating the statutory language into the 

regulations, whereas the WOSB certification requirements would instead 

of Inspector Genera!, Improvements Needed in SBA 's Management of the 

Women Owned Smaff Business Federal Contracting Program, SBA O!G Report 15-10 

(Washington, D.C.: May 14, 2015) and SBA's Women-Owned Small Business Contracting 

Program, SBA OIG Report 18-18 (Washington, D.C.: June 20, 2018) 

8

GAO, A Framework for Managing Fraud Risks in Federal Programs, GA0-15-593SP 

(Washington, DC. July 2015). 

9

The 2015 NOAA expanded the WOSB certification process to include the SBA 

Administrator, in addition to the previously approved methods of a federal agency. a state 

government, or a national certifying ent1ty approved by SBA 

10See Women~Owned Small Business Federal Contract Program, 80 Fed. Reg. 55019 

(Sept. 14, 2015). The value of a WOSB sole-source contract, including options, cannot 

exceed $6.5 million for manufacturing contracts and $4 million for a!! other contracts. A 

related interim rule updating the Federal Acquisition Regulation was issued in December 

2015 and was followed by a final rule in September 2016. 

Page4 GA0-19-563T Women-Owned Small Business Program 
24 

SBD026 with DISTILLER


Insert offset folio 24 here 36318.007

require a prolonged rulemaking process. Second, SBA said that 

addressing all three regulatory changes at the same time would delay the 

implementation of sole-source authority. 

As of early May 2019, SBA had not published a proposed rule for public 

comment to establish a new certification process for the WOSB program. 

Previously, in October 2017, an SBA official stated that SBA was about 

1-2 months away from publishing a proposed rule. However, in June 

2018, SBA officials stated that a cost analysis would be necessary before 

the draft rule could be sent to the Office of Management and Budget for 

review. In response to the SBA OIG recommendation that SBA implement 

the new certification process, SBA stated that it would implement a new 

certification process by January 1, 2020. 11 Further, in June 2018, SBA 

officials told us that they were evaluating the potential costs of a new 

certification program as part of their development of the new certification 

rule. 12 On May 3, 2019, SBA officials explained that they expected to 

publish the proposed rule within a few days. 

In December 2015, SBA published an advance notice of proposed 

rulemaking to solicit public comments to assist the agency with drafting a 

proposed rule to implement a new WOSB certification program. 13 In the 

notice, SBA stated that it intends to address the 2015 NDAA changes, 

including eliminating the self-certification option, through drafting 

regulations to implement a new certification process. The advance notice 

requested comments on various topics, such as how well the current 

certification processes were working, which of the certification options 

11SBA O!G Report 18-18 

12Executive Order 12866 and Office of Management and Budget Circular A-4 require that 

certain agencies-including SBA-genera!ly assess the potential costs and benefits of 

actions, including proposed rules that are deemed to be a "significant regulatory action." A 

"significant regulatory action" 1s defined by the order as one that is likely to result in a rule 

that may (1) have an annual effect on the economy of $100 million or more, or adversely 

affect in a material way the economy or a sector of the economy. among other things 

(generally referred to as "economically significant" regulations); (2) create a serious 

mconsistency or otherwise interfere with another agency's taken or planned actions; (3) 

materially alter the budgetary impact of entitlements, grants, user fees, or loan programs 

or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues 

arising from legal mandates, the President's priorities, or the principles set forth in the 

executive order See Exec. Order No. 12866 § 6(a)(3)(C), 3 C.F.R. § 12866 (1994). 

~omen-Owned Small Business and Economica!!y Disadvantaged Women-Owned Small 

Business-Certification, 80 Fed. Reg. 78984 (Advance notice of proposed rutemaking, 

Dec. 18, 2015) 

Page 5 GA0-19-563T Women-Owned Small Business Program 
25 

SBD026 with DISTILLER


Insert offset folio 25 here 36318.008

SBA Has Not Fully 

Addressed 

Deficiencies in 

Oversight and 

Program 

Implementation 

were feasible and should be pursued, whether there should be a grace 

period for self-certified WOSB firms to complete the new certification 

process, and what documentation should be required. 

Three third-party certifiers submitted comments in response to the 

advance notice of proposed rulemaking, and none supported the option of 

SBA acting as a WOSB certifier. One third-party certifier commented that 

such an arrangement is a conflict of interest given that SBA is also 

responsible for oversight of the WOSB program, and two certifiers 

commented that SBA lacked the required resources. The three third-party 

certifiers also asserted in their comments that no other federal agency 

should be allowed to become an authorized WOSB certifier, with one 

commenting that federal agencies should instead focus on providing 

contracting opportunities for women-owned businesses. All three certifiers 

also proposed ways to improve the current system of third-party 

certification-for example, by strengthening oversight of certifiers or 

expanding their number. The three certifiers also suggested that SBA 

move to a process that better leverages existing programs with 

certification requirements similar to those of the WOSB program, such as 

the 8(a) program. In the advance notice, SBA asked for comments on 

alternative certification options, such as SBA acting as a certifier or 

limiting WOSB program certifications to the 8(a) program and otherwise 

relying on state or third-party certifiers. 14 

SBA has not fully addressed deficiencies we identified in our October 

2014 report, and these recommendations remain open. 15 First, we 

reported that SBA did not have formal policies for reviewing the 

performance of its four approved third-party certifiers, including their 

compliance with their agreements with SBA Further, we found that SBA 

had not developed formal policies and procedures for, among other 

things, reviewing the monthly reports that certifiers submit to SBA 16 As a 

result, we recommended that SBA establish comprehensive procedures 

14WOSB program regulations currently a!lowWOSB certification through the 8(a) 

program; however, SBA officials said that this method of certification currently represents 

a small percentage of all WOSB program certifications 

15GA0-15-54 

16Per their written agreements, the third-party certifiers are required to submit monthly 

reports to SBA describing WOSB program performance information. 

Page 6 GA0-19-563T Women-Owned Small Business Program 
26 

SBD026 with DISTILLER


Insert offset folio 26 here 36318.009

to monitor and assess the performance of the third-party certifiers in 

accordance with their agreements with SBA and program regulations. 

In response to our October 2014 recommendation, in 2016 SBA 

conducted compliance reviews of the four SBA-approved third-party 

certifiers. The compliance reviews included an assessment of the thirdparty certifiers' internal certification procedures and processes, an 

examination of a sample of applications from businesses that the 

certifiers deemed eligible and ineligible for certification, and an interview 

with management staff. SBA officials said that SBA's review team did not 

identify significant deficiencies in any of the four certifiers' processes and 

found that all were generally complying with their agreements. However, 

one compliance review report described "grave concerns" that a thirdparty certifier had arbitrarily established eligibility requirements that did 

not align with WOSB program regulations and used them to decline firms' 

applications. 17 SBA noted in the report that if the third-party certifier failed 

to correct this practice, SBA could terminate the agreement. As directed 

by SBA, the third-party certifier submitted a letter to SBA outlining actions 

it had taken to address this issue, among others. 

In January 2017, SBA's Office of Government Contracting updated its 

written Standard Operating Procedures (SOP) to include policies and 

procedures for the WOSB program, in part to address our October 2014 

recommendation. The 2017 SOP discusses what a third-party-certifier 

compliance review entails, how often the reviews are to be conducted, 

and how findings are to be reported. The 2017 SOP notes that SBA may 

initiate a compliance review "at any time and as frequently as the agency 

determines is necessary." In March 2019, SBA provided an updated SOP, 

which includes more detailed information on third-party compliance 

reviews, such as how SBA program analysts should prepare for the 

review. However, the updated SOP does not provide specific time frames 

for how frequently the compliance reviews are to be conducted. 

In addition, in April2018, SBA finalized a WOSB Program Desk Guide 

that discusses how staff should prepare for a compliance review of a 

17Specifically, SBA found that the third-party certifier denied finns solely on the grounds 

that the woman owner was not the highest compensated officer, which SBA's report states 

was outside the parameters of eligibi!lty for the WOSB program. According to the report, 

SBA provided guidance to the third-party certifier stating that it should not deny firms 

based on compensation issues alone and that the third-party certifier should take into 

account the totality of the circumstances, including whether decisions concerning 

compensation make business sense 

Page 7 GA0~19v563T Women~Owned Small Business Program 
27 

SBD026 with DISTILLER


Insert offset folio 27 here 36318.010

third-party certifier, review certification documents, and prepare a final 

report. In March 2019, SBA provided GAO with an updated WOSB 

Program Desk Guide that contains information comparable to that in the 

2018 version. Both Desk Guides do not describe specific activities 

designed to oversee third-party certifiers on an ongoing basis. 

Per written agreements with SBA, third-party certifiers are required to 

submit monthly reports that include 

the number of WOSB and EDWOSB applications received, approved, 

and denied; 

identifying information for each certified business, such as the 

business name; 

concerns about fraud, waste, and abuse; and 

a description of any changes to the procedures the organizations 

used to certify businesses as WOSBs or EDWOSBs. 

In our October 2014 report, we noted that SBA had not followed up on 

issues raised in the monthly reports and had not developed written 

procedures for reviewing them." At that time, SBA officials said that they 

were unaware of the issues identified in the certifiers' reports and that the 

agency was developing procedures for reviewing the monthly reports but 

could not estimate a completion date. In interviews for our March 2019 

report, SBA officials stated that SBA still does not use the third-party 

certifiers' monthly reports to regularly monitor the program. Specifically, 

SBA does not review the reports to identify any trends in certification 

deficiencies that could inform program oversight. Officials said the reports 

generally do not contain information that SBA considers helpful for 

overseeing the WOSB program, but staff sometimes use the reports to 

obtain firms' contact information. SBA's updated 2019 SOP includes 

information on reviews of third-party certifier monthly reports, but it does 

not contain information on how staff would analyze the reports or how 

these reports would inform SBA's oversight of third-party certifiers and 

related compliance activities, such as eligibility examinations. On May 3, 

2019, SBA officials stated that, earlier in the week, they had initiated 

monthly meetings with the third-party certifiers. SBA officials explained 

that they intended to continue holding these monthly meetings to discuss 

18GA0-15-54 

Page 8 GA0-19-563T Women-Owned Small Business Program 
28 

SBD026 with DISTILLER


Insert offset folio 28 here 36318.011

best practices and potential issues related to the approval and 

disapproval of firms and to improve collaboration. 

Although SBA has taken steps to enhance its written policies and 

procedures for oversight of third-party certifiers, it does not have plans to 

conduct further compliance reviews of the certifiers and does not intend to 

review certifiers' monthly reports on a regular basis in a way that would 

inform its oversight activities. SBA officials said that third-party certifier 

oversight procedures would be updated, if necessary, after certification 

options have been clarified in the final WOSB certification rule. However, 

ongoing oversight activities, such as regular compliance reviews, could 

help SBA better understand the steps certifiers have taken in response to 

previous compliance review findings and whether those steps have been 

effective. In addition, leading fraud risk management practices include 

identifying specific tools, methods, and sources for gathering information 

about fraud risks, including data on trends from monitoring and detection 

activities, as well as involving relevant stakeholders in the risk 

assessment process. 19 Without procedures to regularly monitor and 

oversee third-party certifiers, SBA cannot provide reasonable assurance 

that certifiers are complying with program requirements and cannot 

improve its efforts to identify ineligible firms or potential fraud. Further, it is 

unclear when SBA's final rule will be implemented. As a result, we 

maintain that our previous recommendation should be addressed-that 

is, that the Administrator of SBA should establish and implement 

comprehensive procedures to monitor and assess the performance of 

certifiers in accordance with the requirements of the third-party certifier 

agreement and program regulations. 

SBA also has not fully addressed deficiencies we identified in our October 

2014 report related to eligibility examinations. 20 We found that SBA 

lacked formalized guidance for its eligibility examination processes and 

that the examinations identified high rates of potentially ineligible 

businesses. As a result, we recommended that SBA enhance its 

examination of businesses that register for the WOSB program to ensure 

that only eligible businesses obtain WOSB set-asides. Specifically, we 

suggested that SBA should take actions such as (1) completing the 

development of procedures to conduct annual eligibility examinations and 

implementing such procedures; (2) analyzing examination results and 

20GA0-15-54. 

Page 9 GA0~19·563T Women~Owned Small Business Program 
29 

SBD026 with DISTILLER


Insert offset folio 29 here 36318.012

individual businesses found to be ineligible to better understand the 

cause of the high rate of ineligibility in annual reviews and determine what 

actions are needed to address the causes, and (3) implementing ongoing 

reviews of a sample of all businesses that have represented their 

eligibility to participate in the program. 

SBA has taken some steps to implement our recommendation, such as 

including written policies and procedures for WOSB program eligibility 

examinations in an SOP and a Desk Guide. However, SBA does not 

collect reliable information on the results of its annual eligibility 

examinations. According to SBA officials, SBA has conducted eligibility 

examinations of a sample of businesses that received WOSB program 

set-aside contracts each year since fiscal year 2012. However, SBA 

officials told us that the results of annual eligibility examinations-such as 

the number of businesses found eligible or ineligible-are generally not 

documented. As a result, we obtained conflicting data from SBA on the 

number of examinations completed and the percentage of businesses 

found to be ineligible in fiscal years 2012 through 2018. For example, 

based on previous information provided by SBA, we reported in October 

2014 that in fiscal year 2012, 113 eligibility examinations were conducted 

and 42 percent of businesses were found to be ineligible for the WOSB 

program. However, during our more recent review, we received 

information from SBA indicating that 78 eligibility examinations were 

conducted and 37 percent of businesses were found ineligible in fiscal 

year 2012. In addition, SBA continues to have no mechanism to look 

across examinations for common eligibility issues to inform the WOSB 

program. As we noted in 2014, by not analyzing examination results 

broadly, the agency is missing opportunities to obtain meaningful insights 

into the program, such as the reasons many businesses are deemed 

ineligible. 

Further, SBA still conducts eligibility examinations only of firms that have 

already received a WOSB award. In our October 2014 report, we 

concluded that this sampling practice restricts SBA's ability to identify 

potentially ineligible businesses prior to a contract award. 21 SBA officials 

said that while some aspects of the sample characteristics have changed 

since 2012, the samples still generally consist only of firms that have 

been awarded a WOSB set-aside. Restricting the samples in this way 

limits SBA's ability to better understand the eligibility of businesses before 

21GA0-15-54. 

Page 10 GA0·19·563T Women-Owned Small Business Program 
30 

SBD026 with DISTILLER


Insert offset folio 30 here 36318.013

they apply for and are awarded contracts, as well as its ability to detect 

and prevent potential fraud. 

We recognize that SBA has made some effort to address our previous 

recommendation by documenting procedures for conducting annual 

eligibility examinations of WOSB firms. However, leading fraud risk 

management practices state that federal program managers should 

design control activities that focus on fraud prevention over detection and 

response, to the extent possible. 22 Without maintaining reliable 

information on the results of eligibility examinations, developing 

procedures for analyzing results, and expanding the sample of 

businesses to be examined to include those that did not receive 

contracts, SBA limits the value of its eligibility examinations and its ability 

to reduce ineligibility among businesses registered to participate in the 

WOSB program. These deficiencies also limit SBA's ability to identify 

potential fraud risks and develop any additional control activities needed 

to address these risks. As a result, the program may continue to be 

exposed to the risk of ineligible businesses receiving set-aside contracts. 

In addition, in light of these continued deficiencies, the implementation of 

sole-source authority without addressing the other changes made by the 

2015 NOAA could increase program risk. For these reasons, we maintain 

that our previous recommendation that SBA enhance its WOSB eligibility 

examination procedures should be addressed. 

SBA has also not addressed previously identified issues with WOSB setasides awarded under ineligible industry codes. In 2015 and 2018, the 

SBA OIG reported instances in which WOSB set-asides were awarded 

using NAICS codes that were not eligible under the WOSB program, and 

our analysis indicates that this problem persists. 23 Specifically, our 

analysis of data from the Federal Procurement Data System-Next 

Generation (FPDS-NG) on all obligations to WOSB program set-asides 

from the third quarter of fiscal year 2011 through the third quarter of fiscal 

year 2018 found the following: 

3.5 percent (or about $76 million) of WOSB program obligations were 

awarded under NAICS codes that were never eligible for the WOSB 

program; 

22GA0-15-593SP 

23SBA OIG Report 15-10 and SBA OIG Report 18-18. 

Page 11 GA0·19·563T Women-Owned Small Business Program 
31 

SBD026 with DISTILLER


Insert offset folio 31 here 36318.014

10.5 percent (or about $232 million) ofWOSB program obligations 

made under an EDWOSB NAICS code went to women-owned 

businesses that were not eligible to receive awards in EDWOSBeligible industries; and 

17 of the 4 7 federal agencies that obligated dollars to WOSB program 

set-asides during the period used inaccurate NAICS codes in at least 

5 percent of their WOSB set-asides (representing about $25 million). 

According to SBA officials we spoke with, WOSB program set-asides may 

be awarded under ineligible NAICS codes because of human error when 

contracting officers are inputting data in FPDS-NG or because a small 

business contract was misclassified as a WOSB program set-aside. 

Rather than review FPDS-NG data that are inputted after the contract is 

awarded, SBA officials said that they have discussed options for working 

with the General Services Administration to add controls defining eligible 

NAICS codes for WOSB program set-aside opportunities on 

FedBizOpps.gov-the website that contracting officers use to post 

announcements about available federal contracting opportunities. 

However, SBA officials said that the feasibility of this option was still being 

discussed and that the issue was not a high priority. Additionally, as of 

November 2018, the WOSB program did not have targeted outreach or 

training that focused on specific agencies' use of NAICS codes, and SBA 

officials did not identify any targeted outreach or training provided to 

specific agencies to improve understanding of WOSB NAICS code 

requirements (or other issues related to the WOSB program). On May 6, 

2019, an SBA official provided information that SBA has initiated a review 

to determine federal agencies' use of ineligible NAICS codes and that 

SBA plans to share the findings with agencies and also provide training to 

procurement center representatives. 24 

Congress authorized SBA to develop a contract set-aside program 

specifically for WOSBs and EDWOSBs to address the 

underrepresentation of such businesses in specific industries. In addition, 

federal standards for internal control state that management should 

design control activities to achieve objectives and respond to risks, and 

that management should establish and operate monitoring activities to 

representative is an SBA staff member assigned to federal 

agencies or contract administration offices whose responsibilities include conducting 

periodic reviews of comphance with small business policies, 

Page 12 GA0·19·563T Women..Qwned Small Business Program 
32 

SBD026 with DISTILLER


Insert offset folio 32 here 36318.015

Federal Contracts to 

WOSB Set-Asides 

Remain Relatively 

Small 

monitor and evaluate the Because SBA does not review 

whether contracts are being awarded under the appropriate NAICS 

codes, it cannot provide reasonable assurance that WOSB program 

requirements are being met or identify agencies that may require targeted 

outreach or additional training on eligible NAICS codes. As a result, 

WOSB contracts may continue to be awarded to groups other than those 

intended, which can undermine the goals of and confidence in the 

program. 

While federal contract obligations to all women-owned small businesses 

and WOSB program set-asides have increased since fiscal year 2012, 

WOSB program set-asides remain a small percentage. Specifically, 

federal dollars obligated for contracts to all women-owned small 

businesses increased from $18.2 billion in fiscal year 2012 to $21 A billion 

in fiscal year 2017. 26 Contracts awarded to all women-owned small 

businesses within WOSB-program-eligible industries also increased 

during this period-from about $15 billion to $18.8 billion, as shown in 

figure 1. However, obligations under the WOSB program represented 

only a small share of this increase. In fiscal year 2012, WOSB program 

contract obligations were 0.5 percent of contract obligations to all womenowned small businesses for WOSB-program-eligible goods or services 

(about $73.5 million), and in fiscal year 2017 this percentage had grown 

to 3.8 percent (about $713.3 million) (see fig. 1 ). 

25GAO, Standards for Internal Control in the Federal Government, GA0~14~704G 

(Washington, D.C .. September 2014) 

26These figures include contracts for any type of good or service awarded under the 

WOSB program, under other federal programs, or through full and open competition. 

Page 13 GA0-19-563T Women-Owned Small Business Program 
33 

SBD026 with DISTILLER


Insert offset folio 33 here 36318.016

Figure 1: Obligations for the Women-Owned Small Business Program and to All Women~Owned Small Businesses in Similar 

Industries, Fiscal Years 2012-2017 

Dollars "1 b:liiO'lS\ 

20 

Fts;;:alyear 

In summary, the WOSB program aims to enhance federal contracting 

opportunities for women-owned small businesses. However, as of early 

May 2019. SBA had not fully implemented comprehensive procedures to 

monitor the performance of the WOSB program's third-party certifiers and 

had not taken steps to provide reasonable assurance that only eligible 

businesses obtain WOSB set-aside contracts, as recommended in our 

2014 report." Without ongoing monitoring and reviews of third-party 

certifier reports, SBA cannot ensure that certifiers are fulfilling their 

requirements. and it is missing opportunities to gain information that could 

help improve the program's processes. Further. limitations in SBA's 

procedures for conducting and analyzing eligibility examinations inhibit its 

ability to better understand the eligibility of businesses before they apply 

27 GA0-15-54 

Page 14 GA0-19-563T Women-Owned Small Business Program 
34 

SBD026 with DISTILLER


Insert offset folio 34 here 36318.017

for and potentially receive contracts, which exposes the program to 

unnecessary risk of fraud. Also, since SBA does not expect to finish 

implementing the changes in the 2015 NDAA until January 1, 2020, these 

continued oversight deficiencies increase program risk. As a result, we 

maintain that our previous recommendations should be addressed. 

In addition, SBA has not addressed deficiencies related to WOSB 

program set-asides being awarded under ineligible industry codes. 

Although SBA has updated its training and outreach materials for the 

WOSB program to address NAICS code requirements, it has not 

developed a process for periodically reviewing FPDS-NG data, and has 

yet to provide targeted outreach or training to agencies that may be using 

ineligible codes. As a result, SBA is not aware of the extent to which 

individual agencies are following program requirements and which 

agencies may require targeted outreach or additional training. Reviewing 

FPDS-NG data would allow SBA to identify those agencies (and 

contracting offices within them) that could benefit from such training. 

Without taking these additional steps, SBA cannot provide reasonable 

assurance that WOSB program requirements are being met. 

As such, we made one recommendation in our March 2019 report to 

SBA. We recommended that SBA develop a process for periodically 

reviewing FPDS-NG data to determine the extent to which agencies are 

awarding WOSB program set-asides under ineligible NAICS codes, and 

take steps to address any issues identified, such as providing targeted 

outreach or training to agencies making awards under ineligible codes. As 

of May 2019, this recommendation remains open. 

Chairman Golden, Ranking Member Stauber, and Members of the 

Subcommittee, this completes my prepared statement. I would be 

pleased to respond to any questions that you may have at this time. 

Page 15 GA0·19·563T Women·Owned Small Business Program 
35 

SBD026 with DISTILLER


Insert offset folio 35 here 36318.018

GAO Contact and 

Acknowledgments 

(103491) 

If you or your staff have any questions about this testimony, please 

contact William Shear, Director, Financial Markets and Community 

Investment at (202) 512-8678 or shearw@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this statement. GAO staff who made key contributions to 

this testimony are Andrew Pauline (Assistant Director), Tarek 

Mahmassani (Analyst in Charge), and Jennifer Schwartz. 

Other staff who made key contributions to the report cited in the testimony 

were Allison Abrams, Pamela Davidson, Jonathan Harmatz, Tiffani 

Humble, Julia Kennon, Rebecca Shea, Jena Sinkfield, Tyler Spunaugle, 

and Tatiana Winger. 

Page 16 GA0-19-563T Women-Owned Small Business Program 
36 

SBD026 with DISTILLER


Insert offset folio 36 here 36318.019
37 

SBD026 with DISTILLER


Insert offset folio 37 here 36318.020

GAO's Mission 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Phone 

Connect with GAO 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

Strategic Planning and 

External Liaison 

The Government Accountabillty Office, the audit, evaluation, and investigative 

arm of Congress, exists to support Congress in meeting its constitutional 

responsibilities and to help improve the performance and accountability of the 

federal government for the American people. GAO examines the use of public 

funds; evaluates federal programs and policies; and provides analyses, 

recommendations, and other assistance to help Congress make informed 

oversight, policy, and funding decisions. GAO's commitment to good government 

is reflected in its core values of accountability, integrity, and reliability_ 

The fastest and easiest way to obtain copies of GAO documents at no cost is 

through GAO's website (https://www.gao.gov). Each weekday afternoon, GAO 

posts on its website newly released reports, testimony, and correspondence, To 

have GAO e-mail you a list of newly posted products, go to https://www.gao.gov 

and select "E-mail Updates." 

The price of each GAO publication reflects GAO's actual cost of production and 

distribution and depends on the number of pages in the publication and whether 

the publication is printed in color or black and white. Pricing and ordering 

information is posted on GAO's website, https:l/www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, MasterCard, 

Visa, check, or money order. Call for additional information. 

Connect with GAO on Facebook, Flickr, Twitter, and YouTube. 

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts. 

Visit GAO on the web at https://www.gao.gov. 

Contact FraudNet: 

Website: https:/Jwww.gao.gov/fraudnet/fraudnet.htm 

Automated answering system: (800) 424-5454 or (202) 512-7700 

Orice Williams Brown, Managing Director, WilliamsO@gao.gov, (202) 512-4400, 

U.S. Government Accountability Office, 441 G Street NW, Room 7125, 

Washington, DC 20548 

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548 

James-Christian Blackwood, Managing Director. spel@gao.gov, (202) 512-4707 

U.S. Government Accountability Office, 441 G Street NW, Room 7814, 

Washington, DC 20548 

... 

.... ~ 

Please Print on Recycled Paper. 
38 

SBD026 with DISTILLER


Insert offset folio 38 here 36318.021

Statement ofRobb Wong 

Associate Administrator 

Office of Government Contracting and Business Development 

U.S. Small Business Administration 

before the 

House Committee on Small Business 

Subcommittee on Contracting and Infrastructure 

Hearing on Oversight of the SBA's Women Owned Small Business 

Federal Contract Program 

May 16,2019 
39 

SBD026 with DISTILLER


Insert offset folio 39 here 36318.022

Statement of Robb Wong 

Associate Administrator 

U.S. Small Business Administration 

Thank you. Chairman Golden. Ranking Member Stauber. and members of the 

subcommittee for inviting me to speak with you. In my testimony today. I would like to outline 

the role of the Office of Government Contracting and Business Development (GCBD); share our 

progress in implementing certification for the Women Owned Small Business (WOSB) program; 

comment on the GAO reviev,:; and identify the steps we are taking to move forward. 

I serve as Associate Administrator for GCBD. We are the office that works with all other 

federal agencies to ensure that their buying strategies and practices provide maximum practicable 

opportunity to small businesses. The federal government spends nearly $500 billion a year on 

goods and services through contracting. The Small Business Act establishes a government-wide 

goal at not less than 23% of prime contract awards go to small businesses. I am happy to report 

that agencies have achieved record highs over the past few years. exceeding the 23% goal. 

Additionally. it should be noted that the government increased the number of dollars awarded to 

small businesses. In 20!4. the government awarded a record $99 billion. In 2017. we reached a 

new high of$105 billion. and we expect to greatly exceed that in 2018. This has meant more 

contracts. meaning more revenue, for small businesses and more jobs. 

In addition to the government-wide small business goal of23%. there arc four socioeconomic contracting goals- 5% for small disadvantaged and women owned small businesses; 

3% for service-disabled veteran-owned small businesses; and 3% for small businesses located in 

Historically Underutilized business zones. In order to help achieve these goals. there are various 

tools contracting otlicers can usc to help achieve these goals. including set-asides which allow 

businesses in these programs to only compete amongst similarly situated entities. 

Currently. two of SBA "s small business contracting programs require SBA to certify the 

businesses size and status -the 8(a) Business Development Program and the Historically 

Underutilized Business Zone (HlJBZone) Program. Small businesses in the Service-disabled 

Veteran-owned (SDVOSB) and the Women-owned small business (WOSB) Program are able to 

selt:certify their size and status. The SBA certification involves record and document reviews of 

the companies and then periodic eligibility checks. As you know. the 2015 National Defense 

Authorization Act changed the requirement for WOSBs in the WOSB program to be SBA 

certified. 

When I arrived two years ago, I realized that the certitication program still needed to be 

implemented. Administrator McMahon made it a priority for me. We got to work right a\vay on 

dratling the rule- which is now out for public comment. Currently, \.ve receive 2,000 8(a) 

applications a year and have approximately 5.000 !inns in the portfolio. SBA has 53 staff to 

manage this workload. The HUBZone program receives about 1500 applications per year. with a 

portfolio of approximately 5000 !inns. SBA has a staff of 17 to manage this workload. In 

addition to the statfllisted above. SBA has 140 Business Opportunity Specialists in our District 

Offices- they perform critical oversight functions like site visits and eligibility reviews for the 

S(a) and HUB Zone programs. The number ofse!f:certitied WOSB firms is larger than both 8(a) 

2 
40 

Æ 

SBD026 with DISTILLER


Insert offset folio 40 here 36318.023