10030 Federal Register / Vol. 75, No. 42 / Thursday, March 4, 2010 / Proposed Rules 

1 In 1988, the Women’s Business Ownership Act, 

Public Law 100–588 (Oct. 25, 1988), ‘‘was enacted 

to assist women in starting, managing and growing 

small businesses.’’ Ibid. The National Plan of Action 

reported that ‘‘while this program has assisted 

thousands of women in obtaining business 

financing and information, it has had less success’’ 

at increasing the percentage of the total value of all 

prime contract and subcontract awards going to 

WOSBs or increasing the WOSB share in the 

economy because WOSBs have not experienced a 

proportional increase in their share of Federal 

contracting dollars. Subsequently, in 1994, section 

7106 of the Federal Acquisition Streamlining Act 

(FASA), Public Law 103–355, ‘‘amended the Small 

Business Act by establishing a target that was aimed 

at increasing opportunities for women to compete 

for Federal contracts.’’ Id. ‘‘FASA, among other 

things, established a government-wide goal for 

participation by WOSBs in procurement contracts 

of not less than 5 percent of the total value of all 

prime contract and subcontract awards for each 

fiscal year.’’ Ibid. That goal has not been reached to 

date. 

2This underrepresentation is mirrored by 

disparities that women-owned firms face in the 

marketplace more generally. See, e.g., Opportunities 

and Challenges for Women Entrepreneurs on the 

20th Anniversary of the Women’s Business 

Ownership Act: Roundtable Before the S. Comm. on 

Small Business and Entrepreneurship, 110th Cong. 

3 (2008) (available at http://www.access.gpo.gov/ 

congress/Senate/Senate17ch110.html); Expanding 

Opportunities for Women Entrepreneurs: The 

Future of Women’s Small Business Programs: 

Hearing Before the S. Comm. on Small Business and 

Entrepreneurship, 110th Cong. 2 (2007) (statement 

of the Hon. John F. Kerry, Chairman and Sen. from 

SMALL BUSINESS ADMINISTRATION 

13 CFR Parts 121, 127, and 134 

RIN 3245–AG06 

Women-Owned Small Business 

Federal Contract Program 

AGENCY: Small Business Administration. 

ACTION: Notice of proposed rulemaking; 

withdrawal of proposed rule. 

SUMMARY: The U.S. Small Business 

Administration (SBA) proposes to 

amend its regulations governing small 

business contracting procedures. This 

Proposed Rule would amend part 127, 

that was promulgated in a Final Rule on 

October 1, 2008, and entitled ‘‘The 

Women-Owned Small Business Federal 

Contract Assistance Procedures,’’ RIN 

3245–AF40. This Proposed Rule would 

implement procedures authorized by 

the Small Business Act (Act) (Pub. L. 

85–536, as amended) to help ensure a 

level playing field on which WomenOwned Small Businesses (WOSBs) can 

compete for Federal contracting 

opportunities. SBA proposes changes to 

part 127 that include eliminating the 

requirement for an agency-by-agency 

determination of discrimination, 

adopting both ‘‘numbers’’ and ‘‘dollars’’ 

measures of underrepresentation, and 

using the Fiscal Year 2006 Central 

Contractor Registration (CCR) database 

as the data source for determining 

eligible industries under the WOSB 

Program. This Proposed Rule thus 

identifies the eligible industries under 

the Program as those industries in 

which WOSBs are underrepresented or 

substantially underrepresented using 

either the numbers or the dollars 

approach. This Proposed Rule seeks to 

retain, for the most part, parts 121 and 

134 of the Final Rule published on 

October 1, 2008, titled ‘‘The WomenOwned Small Business Federal Contract 

Assistance Procedures,’’ RIN 3245– 

AF40; these portions of the rule govern 

various implementation procedures of 

the Program, as more fully discussed 

below. 

In addition, SBA is withdrawing its 

proposed rule entitled ‘‘The WomenOwned Small Business Federal Contract 

Assistance Procedures,’’ which was 

published on October 1, 2008, in the 

Federal Register together with a request 

for comments on two data sets used to 

determine the eligible industries under 

the WOSB Program. 

DATES:

Date of Withdrawal: The proposed 

rule published on October 1, 2008, in 

the Federal Register at 73 FR 57014 is 

withdrawn as of March 4, 2010. 

Comment Date: Submit comments on 

or before May 3, 2010. 

ADDRESSES: You may submit comments, 

identified by 3245–AG06, by any of the 

following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail, Hand Delivery/Courier: Dean 

Koppel, Assistant Director, Office of 

Policy and Research, Office of 

Government Contracting, U.S. Small 

Business Administration, 409 Third 

Street, SW., Washington, DC 20416. 

All comments will be posted on 

http://www.regulations.gov. If you wish 

to submit confidential business 

information (CBI) as defined in the User 

Notice at http://www.regulations.gov, 

please submit the comments to Dean 

Koppel and highlight the information 

that you consider to be CBI and explain 

why you believe this information 

should be held confidential. SBA will 

make a final determination as to 

whether the comments will be 

published or not. 

FOR FURTHER INFORMATION CONTACT: 

Dean Koppel, Assistant Director, Office 

of Policy and Research, Office of 

Government Contracting, U.S. Small 

Business Administration, 409 Third 

Street, SW., Washington, DC 20416. 

SUPPLEMENTARY INFORMATION:

I. Background 

On December 21, 2000, Congress 

enacted the Small Business 

Reauthorization Act of 2000, Public Law 

106–554. Section 811 of that Act 

addressed the difficulties womenowned businesses have endured in 

competing for Federal procurement 

contracts by adding a new section 8(m), 

15 U.S.C. 637(m), authorizing Federal 

contracting officers to restrict 

competition to eligible Women-Owned 

Small Businesses (WOSBs) for Federal 

contracts in certain industries. The law 

responds to decades of sex 

discrimination that have inhibited the 

ability of women to form firms and then 

to compete equally for contracts. By 

providing small, women-owned 

businesses an opportunity to gain a 

critical foothold in the Federal 

procurement market, the statute helps 

WOSBs overcome the economic barriers 

they have faced and helps ensure that 

the Federal government does not 

perpetuate the effects of economic sex 

discrimination. 

In enacting this statute, Congress 

acted against a backdrop of 

discrimination against women that has 

been examined in Congressional 

hearings over many years and which 

persists to this day, as well as a history 

of largely unsuccessful Federal attempts 

to remedy that discrimination and 

provide a level playing field for WOSBs 

to compete for Federal contracts. 

Women-owned firms have been 

persistently underrepresented in 

Federal procurement contracting. For 

example, in 1979, when Executive 

Order 12138 

charged Federal agencies with responsibility 

for providing procurement assistance to 

women-owned businesses, WOSBs received 

only 0.2% of all Federal procurements. 

LaLa Wu and Kate Collier, The National 

Plan of Action: Then and Now, Bella 

Abzug Leadership Institute, Nov. 2007 

(hereinafter referred to as National Plan 

of Action), publicly available at http:// 

www.abzuginstitute.org/

NationalPlanofAction_ThenandNowFinal.pdf.1 In the nine succeeding years 

(through 1989), the percentage of WOSB 

Federal procurements grew to 1 percent. 

See id. In later years, 

[a]lthough the growth rate in the number of 

women-owned small businesses (WOSBs) 

was almost twice that of all firms between 

1997 and 2002, WOSBs [did] not experience[] 

a proportional increase in their share of 

Federal contracting dollars. 

See id. 

Evidence presented to Congress 

shows that women-owned firms 

continue to be significantly 

underrepresented in Federal 

contracting.2 In 2002, for example, there 


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Massachusetts) (stating that ‘‘women owned small 

businesses still continue to have markedly lower 

revenue and fewer employees than firms, even 

comparable ones, owned by men’’) (available at 

http://sbc.senate.gov/hearings/20070920.cfm); 

Women in Business: Leveling the Playing Field: 

Roundtable Before the S. Comm. on Small Business 

and Entrepreneurship, 110th Cong. 8 (2008) 

(available at http://sbc.senate.gov/hearings/ 

20080319.cfm). 3See also Small Business Administration, FY 

2008 Official Goaling Report; Small Business 

Administration (available at http://www.sba.gov/ 

aboutsba/sbaprograms/goals/index.html (last 

visited February 12, 2010). 

4See, e.g., Women in Business: Leveling the 

Playing Field: Roundtable Before the S. Comm. on 

Small Business and Entrepreneurship, 110th Cong. 

8 (2008) (discussing challenges facing women 

business owners) (available at http://sbc.senate.gov/ 

hearings/20080319.cfm); The Department of 

Transportation’s Disadvantaged Business 

Enterprises Program: Hearing Before the H. Comm. 

on Transp. and Infrastructure, 111th Cong. 299 

(2009) (statement of Joann Payne, President, 

Women First National Legislative Committee) 

(describing sex discrimination in business lending) 

(available at http://transportation.house.gov/ 

hearings/hearingdetail.aspx?NewsID=859); 

Opportunities and Challenges for Women 

Entrepreneurs: Roundtable Before the S. Comm. on 

Small Business and Entrepreneurship, 110th Cong. 

25 (2008) (detailing, among other things, sex 

discrimination in lending, and women’s exclusion 

from informal business networks that are a crucial 

source of business opportunities) (available at 

http://sbc.senate.gov/hearings/20080909.cfm); 

National Economic Research Associates, Inc., Race, 

Sex and Business Enterprise: Evidence from 

Memphis, Tennessee 100 (2008) (explaining that 

discrimination in the labor force reduces the future 

availability of women-owned businesses by limiting 

women’s ability to obtain the kinds of employment 

experiences that are most likely to lead to 

entrepreneurial opportunities) (The Minority 

Business Development Agency: Enhancing the 

Prospects for Success: Hearing Before the H. 

Subcomm. on Commerce, Trade, and Consumer 

Protection of the H. Comm. on Energy and 

Commerce, 111th Cong. (2009) available at http:// 

energycommerce.house.gov/

index.php?option=com_content&view=

article&id=1772:the-minority-businessdevelopment-agency-enhancing-the-prospects-forsuccess&catid=129:subcommittee-on-commercetrade-and-consumer-protection&Itemid=70). 

5Paragraph (3) as enacted permits SBA to waive 

the ‘‘economically disadvantaged’’ requirement for 

industries in which SBA has determined that 

WOSBs are substantially underrepresented. 

However, at the time that the WOSB bill was 

reported out of the House Committee on Small 

Business, then-paragraph (3) (eventually enacted as 

paragraph (4)) required the Administrator to 

conduct a study to identify industries in which 

WOSBs are underrepresented with respect to 

Federal procurement contracting. Thus, the House 

Committee viewed paragraph (2)(C) as requiring 

that contracts eligible for the 8(m) program be 

contracts ‘‘for the procurement of goods and 

services in an industry identified by the 

Administrator of the Small Business Administration 

as one in which small business concerns owned 

and controlled by women are historically 

underrepresented.’’ H.R. Rep. No. 106–879, at 4 

(2000). There is nothing in the legislative history 

that indicates that Congress intended a different 

result. 

In accord with the legislative history, and to give 

effect to each provision of the statute, SBA has 

concluded that paragraph (2)(C)’s reference to 

paragraph (3) is better understood as a reference to 

paragraph (4). Paragraph (2)(C) authorizes restricted 

competition with respect to industries ‘‘identified’’ 

by SBA pursuant to the referenced paragraph. 

Paragraph (4) uses the term ‘‘identify,’’ calling for 

SBA to conduct a study to ‘‘identify’’ industries in 

which WOSBs are underrepresented with respect to 

Federal procurement contracting. Paragraph (3), in 

contrast, does not use the term ‘‘identify.’’ 

Understanding the reference to paragraph (3) as 

a reference to paragraph (4) also preserves the 

independent effect of each paragraph in section 

8(m), including paragraphs (2)(A) and (3). If, by 

contrast, paragraph (2)(C) were applied literally, it 

would generate several anomalies. For example, it 

would undercut paragraph (2)(A)’s requirement of 

economic disadvantage (the first condition 

discussed above), because restricted competition 

would apply only to industries for which SBA had 

waived the economic disadvantage requirement. 

Further, a literal reading of paragraph 2(C) would 

turn paragraph (3), which is clearly phrased as a 

waiver provision, into an affirmative condition for 

restricted competition, authorizing restricted 

competition only in industries in which WOSBs are 

‘‘substantially underrepresented.’’ In addition, the 

literal application of paragraph (2)(C) would 

undercut paragraph (4), which requires SBA to 

conduct a study to identify industries in which 

WOSBs are ‘‘underrepresented’’ with respect to 

Federal procurement contracting. If restricted 

competition were permitted only in industries in 

which SBA had determined WOSBs to be 

‘‘substantially underrepresented,’’ there would be no 

need for SBA to conduct a study to determine 

underrepresentation (as opposed to substantial 

underrepresentation). 

were 6.5 million women-owned firms in 

the United States, which accounted for 

28.2 percent of all non-farm businesses 

in the United States. See SBA Office of 

Advocacy, Women in Business: A 

Demographic Review of Women’s 

Business Ownership, 2007 (available at 

http://www.sba.gov/advo/research/ 

rs280tot.pdf). Despite this presence, 

however, the share of women-owned 

small business prime contract awards 

(in dollar terms) was 2.9 percent in FY 

2002 and 3.39 percent in FY 2008. See 

Federal Procurement Data System/Next 

Generation (available at http:// 

www.fpds.gov/fpdsng_cms/).3

Substantial academic literature and 

evidence presented to Congress 

demonstrates that women face 

discrimination both in the ability to 

form and grow their businesses and in 

the treatment they receive in contracting 

markets.4

The following sections explain the 

operation of the Program. 

II. Section 8(m): The WOSB Program 

Legislation 

Congress established the WOSB 

Program as a tool to enable contracting 

officers to identify and establish a 

sheltered market for competition among 

WOSBs for the provision of goods and 

services to the Federal Government. 

H.R. Rep. No. 106–879, at 2 (2000) 

(publicly available at http:// 

thomas.loc.gov/cgi-bin/cpquery/ 

T?&report=hr879&dbname=106&). 

Consistent with these goals, section 

8(m) of the Act authorizes contracting 

officers to restrict competition for ‘‘any 

contract for the procurement of goods or 

services by the Federal Government’’ to 

WOSBs under certain enumerated 

circumstances. 15 U.S.C. 637(m)(2). To 

be deemed a WOSB for purposes of 

section 8(m), a firm must be a ‘‘small 

business concern owned and controlled 

by women.’’ As defined in section 3(n) 

of the Act, this means that at least 51 

percent of the concern must be owned 

by one or more women, and that the 

management and daily business 

operations of the concern must be 

controlled by one or more women. 15 

U.S.C. 632(n). 

Section 8(m) establishes six criteria 

that must be satisfied in order for a 

contracting officer to reserve an 

acquisition for WOSBs: 

• First, each eligible concern must be 

not less than 51 percent owned by one 

or more women who are ‘‘economically 

disadvantaged.’’ However, SBA may 

waive this requirement of economic 

disadvantage if it determines that the 

concern is in an industry in which 

WOSBs are ‘‘substantially 

underrepresented.’’ 

• Second, the contracting officer must 

have a reasonable expectation that two 

or more WOSBs will submit offers for 

the contract. 

• Third, the anticipated award price 

of the contract must not exceed $5 

million in the case of manufacturing 

contracts and $3 million in the case of 

other contracts. 

• Fourth, in the estimation of the 

contracting officer, the contract must be 

able to be awarded at a fair and 

reasonable price. 

• Fifth, each competing concern must 

be duly certified by a Federal agency, a 

State government, or an SBA-approved 

entity as a WOSB, or must certify to the 

contracting officer and provide adequate 

documentation that it is a WOSB. The 

statute imposes penalties for a concern’s 

misrepresentation of its status as a 

WOSB. 

• Sixth, paragraph (2)(C) of the Act 

provides that the contract for which 

competition is restricted must be for the 

procurement of goods or services with 

respect to an industry identified by SBA 

‘‘pursuant to paragraph (3).’’ However, 

the reference to paragraph (3) of the Act 

appears to be a drafting error that 

resulted from a floor amendment, and 

the intent of the provision appears to be 

to identify eligible contracts as those 

concerning an industry identified 

pursuant to paragraph (4).5 Thus, 

accounting for the apparent drafting 

error, the sixth condition for the 

restriction of Federal procurement 

contracts to WOSBs is that the contract 

be for the procurement of goods or 


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6This is a fairly conservative method of 

determining availability and may underestimate the 

availability of WOSBs because discrimination may 

limit the revenues of WOSBs that nonetheless are 

ready, willing, and able to perform work on Federal 

contracts. 

services with respect to an industry 

identified by SBA pursuant to the study 

mandated by paragraph (4) as one in 

which WOSBs are underrepresented 

with respect to Federal procurement 

contracting. 

Based on its understanding of the 

meaning and intent of section 8(m) read 

as a whole, SBA interprets the statute to 

authorize restricted competition for 

industries in which it has determined 

WOSBs to be underrepresented or 

substantially underrepresented in 

Federal procurements, provided the 

other conditions of section 8(m) are met. 

This Proposed Rule is drafted 

accordingly. 

III. The RAND Report 

Shortly after section 8(m) was 

enacted, and pursuant to the 

requirement of paragraph (4) of the law, 

SBA, using its own internal resources, 

conducted a study to identify the 

industries in which WOSBs are 

underrepresented with respect to 

Federal procurement contracting. SBA 

initially completed its study in 

September 2001, and contracted with 

the National Academy of Sciences 

(NAS) to review the study before 

publication. In March of 2005, the 

National Research Council, which 

functions under the auspices of the NAS 

and other National Academies, issued 

an independent evaluation concluding 

that SBA’s study was flawed and 

offering various recommendations for a 

revised study. In response to this 

evaluation, SBA issued a solicitation in 

October 2005 seeking a contractor to 

perform a revised study in accordance 

with the NAS recommendations. In 

February 2006, SBA awarded a contract 

to the Kauffman-RAND Institute for 

Entrepreneurship Public Policy (RAND) 

to complete a revised study of the 

underrepresentation of WOSBs in 

Federal prime contracts by industry 

code. The resulting study—the RAND 

Report—was published in April 2007 

and is available to the public at 

http://www.RAND.org/pubs/ 

technical_reports/TR442. 

As the RAND Report explains more 

fully, RAND measured WOSB 

representation in each industry code 

through a ‘‘disparity ratio,’’ which is a 

measure comparing the utilization of 

WOSBs in Federal contracting in a 

particular code to their availability for 

such contracts. The disparity ratio itself 

is defined as utilization divided by 

availability. Utilization and availability, 

in turn, are themselves ratios. The 

disparity ratio is therefore a ratio of 

ratios. This disparity ratio provides an 

estimate of the extent to which WOSBs 

that are available for Federal contracts 

in specific industries are actually being 

utilized to perform such contracts. 

Consistent with the NAS’s 

recommendation, RAND measured 

utilization and availability in two ways: 

in terms of dollars and numbers. When 

using dollars as the measure, RAND 

calculated utilization as the ratio of 

Federal contract dollars awarded to 

WOSBs in a given industry code to total 

Federal contract dollars awarded in that 

industry code. It calculated availability 

as the ratio of the gross receipts 

(revenues) of WOSBs in a particular 

industry code to the gross receipts 

(revenues) of all firms in that code.6

When using numbers as the measure, 

RAND calculated utilization as the ratio 

of the number of Federal contracts 

awarded to WOSBs in a particular 

industry code to the number of Federal 

contracts awarded overall in that code, 

and availability as the ratio of the 

number of WOSBs in a particular 

industry code to the total number of 

firms in that code. 

According to the RAND Report, if the 

disparity ratio in an industry code is 

equal to 1.0 when measuring in terms of 

dollars, that indicates that WOSBs have 

been awarded contract dollars in the 

same proportion as their economic 

representation in the industry; that is, 

they are awarded contracting dollars in 

proportion to their share of total 

business in that industry, and are 

therefore neither over- nor underrepresented. Similarly, if the disparity 

ratio in an industry code is equal to 1.0 

when measuring in terms of numbers, 

this indicates that WOSBs are awarded 

contracts (of whatever dollar value) in 

the same proportion as their numerical 

representation in the industry. A ratio of 

less than 1.0 (lower utilization than 

availability) suggests some degree of 

underrepresentation with respect to that 

particular means of measuring disparity 

(dollars or numbers); a ratio of greater 

than 1.0 (greater utilization than 

availability) suggests some measure of 

overrepresentation with respect to a 

given metric. Following the NAS 

report’s recommendations, RAND 

classified an industry as 

‘‘underrepresented’’ if its disparity ratio 

was between 0.5 and 0.8 using either the 

numbers or dollars approach, and 

‘‘substantially underrepresented’’ if its 

ratio was less than 0.5. It is important 

to note that RAND states 

disparity ratios are not in and of themselves 

measures of discrimination, although they 

have been used in numerous court cases to 

infer discrimination. Nonetheless they are a 

starting point, a way to identify whether 

there are any differences in outcomes 

between different types of firms. 

(RAND Report at 30; see also discussion at 

4 and 5). 

RAND calculated these ratios using a 

variety of different data sets. For the 

utilization component of the disparity 

ratio, RAND used the data from the FY 

2005 Federal Procurement Data System/ 

Next Generation (FPDS/NG) 

procurement database. This was the 

only data source identified by RAND 

with respect to the utilization 

component of the disparity ratio. 

However, RAND did adjust the FPDS to 

account for possible miscoding of 

business size. Specifically, RAND 

linked the FPDS data to 2004 Dun and 

Bradstreet (D&B) data using the Data 

Universal Numbering System (DUNS) to 

identify the parent companies of local 

establishments, and then used the 

DUNS to assess whether a firm was 

small. However, because the data file 

was also prone to error, RAND 

presented results both with and without 

the DUNS cross-reference. 

For the availability component of the 

disparity ratio, RAND used two different 

databases: The 2002 Survey of Business 

Owners (SBO) from the five-year 

Economic Census, and the FY 2006 

Central Contractor Registration (CCR) 

registration database. Using the SBO 

database, RAND presented results only 

at the two-digit industry code level, a 

comparatively generalized level of 

industry disaggregation. Using the CCR, 

in contrast, RAND presented results at 

the two-, three-, and four-digit industry 

code levels. RAND also presented full 

sample results and trimmed sample 

results (eliminating the top and bottom 

0.5 percent of the data) for each 

disparity ratio. RAND did this in order 

to examine the sensitivity of the 

disparity ratio to extreme values, such 

as very large contracts or negative dollar 

amounts resulting from contract actions 

based on multi-year contracts or 

modifications to such contracts to 

earlier contracts. 

Using these different data sources and 

various adjustments, the RAND Report 

identified twenty-eight different 

possible approaches to determining the 

degree of underrepresentation of 

WOSBs in Federal procurement 

contracting. The parameters and results 

of each approach are summarized in the 

RAND Report at Table 4.6. 

IV. Regulatory History 

On June 15, 2006, SBA published in 

the Federal Register, at 71 FR 34550, a 

Proposed Rule (RIN 3245–AE65), with 


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request for comments, that proposed to 

amend its regulations in accordance 

with section 8(m). The Proposed Rule 

contained the infrastructure rules 

necessary for the WOSB Program 

implementation, but did not identify the 

eligible industries for the WOSB 

Program because the RAND Report had 

not been published at the time of the 

issuance of that Proposed Rule. The 

RAND Report was subsequently 

published on April 27, 2007. Based on 

SBA’s evaluation of the public and 

inter-agency comments received on the 

June 15, 2006 Proposed Rule, as well as 

discussions with the U.S. Department of 

Justice (DOJ) and the Office of Federal 

Procurement Policy (OFPP), and further 

examination of section 8(m), it was 

determined that the June 15, 2006 

Proposed Rule required significant 

changes that warranted further public 

comment and consideration. In 

addition, SBA had the results of the 

RAND study. 

Therefore, on December 27, 2007, 

SBA published a new Proposed Rule, 

titled Women-Owned Small Business 

Federal Contract Assistance Procedures, 

RIN 3245–AF40, at 72 FR 73285, that 

consolidated the infrastructure rules 

necessary for the WOSB Program 

implementation with the RAND study 

findings, which were used to determine 

the industries in which WOSBs would 

be eligible for Federal contracting under 

the WOSB Program. 

In determining the eligible industries, 

the December 2007 Proposed Rule 

employed the full-sample 4-digit NAICS 

code dollars approach (using the dollar 

value of contract awards and the 

receipts of businesses) to identify the 

eligible industries under the WOSB 

Program. This approach identified four 

industries in which WOSBs were either 

underrepresented or substantially 

underrepresented. The comment period 

for the December 2007 Proposed Rule 

closed on March 31, 2008. SBA received 

approximately 1,720 comments on the 

proposed rule. Of the 1,720 comments 

received, 1,689 requested withdrawal of 

the Proposed Rule and/or stated 

opposition to some portion of the 

Proposed Rule. Subsequently, on 

October 1, 2008, SBA published a Final 

Rule in the Federal Register at 73 FR 

56940, RIN 3245–AF40. This Final Rule 

implemented the infrastructure 

regulations for the WOSB Program, but 

did not identify the eligible industries 

for the WOSB Program. 

The reason for the approach was that 

after identifying eligible industries 

under the program in December 2007, 

SBA discovered certain limitations in 

the data RAND used. Therefore, SBA 

published a Proposed Rule; Request for 

Comment on October 1, 2008, at 73 FR 

57014, which provided for a 30-day 

public comment period and requested 

comments on two data sets that SBA 

could use to determine the eligible 

industries for the WOSB Program. SBA 

elected to publish the October 1, 2008, 

Proposed Rule, rather than a Final Rule, 

on the identification of the eligible 

industries to engage in a further review 

and examination of the RAND study and 

potential measures of disparity. As a 

result of this further examination, SBA 

stated in the Proposed Rule; Request for 

Comments that it had identified a 

limitation inherent in the CCR data set 

when the dollars approach was used. 

Specifically, SBA explained that 

vendors input information into CCR 

relating to the firm’s revenues and 

NAICS codes, which are a method for 

classifying business establishments. 

Vendors must supply at least one 

NAICS code for registration into CCR to 

be complete, but can supply more than 

one. Vendors do not input the 

business’s revenues for each NAICS 

code listed or for each NAICS code in 

which it does business; rather, vendors 

input total revenues for the firm. Thus, 

CCR does not provide information 

concerning the revenue of a firm in each 

of the NAICS codes, or industries, it sets 

forth in its CCR registration. Therefore, 

when RAND computed the disparity 

ratio using the CCR dollars approach to 

determine underrepresentation, each 

firm’s total revenue was counted in 

every NAICS code associated with the 

firm. 

Upon discovering the CCR data set 

limitation, SBA contacted the United 

States Census Bureau (Census Bureau) 

to determine the availability of an 

alternative data set. The Census Bureau 

provided SBA with a data set for the 

availability component of the disparity 

ratio that consists of data from the 2002 

Survey of Business Owners (SBO) 

collected through the 5-year Economic 

Census for firms with employees 

(hereinafter referred to as ‘‘Census SBO 

data’’). Although this data set was not 

used in the RAND report results, it was 

mentioned in the RAND report as 

restricted data which would be available 

to SBA at a more disaggregated NAICS 

code level than the public SBO data. 

The Census Bureau report and 

associated data are available at http:// 

www.sba.gov/idc/groups/public/ 

documents/sba_homepage/ 

census_bureau.pdf. 

In its October 1, 2008 Proposed Rule; 

Request for Comment, SBA sought input 

from the public on this CCR data 

limitation as well as the Census SBO 

data set alternative. SBA received 38 

comments on that Proposed Rule. The 

majority of these comments generally 

opposed the use of the Census SBO data 

because the disaggregated data set was 

not available publicly without 

undergoing a screening process due to 

statutory restrictions to protect the 

confidentiality of the data. No 

comments addressed the substantive 

findings of the Census data or 

challenged its accuracy. 

SBA has reviewed the October 1, 2008 

Final Rule and the Proposed Rule, as 

well as the public comments, and 

determined that changes to both rules 

are necessary. After careful review of 

the comments, SBA has decided to 

withdraw the October 1, 2008 Proposed 

Rule for the reasons identified in the 

currently proposed rule. Consequently, 

SBA has set forth below a new Proposed 

Rule for the WOSB Program which 

includes both the infrastructure 

regulations and the identification of the 

eligible industries. SBA has set forth the 

entire Proposed Rule below, rather than 

only the portions of part 127 that SBA 

has decided to amend, in order to afford 

the public an opportunity to comment 

on all aspects of the program. SBA has 

determined that setting forth the entire 

infrastructure and industries in a 

Proposed Rule will best serve the 

public’s ability to address any concerns 

or opinions regarding this WOSB 

Program. For ease of reference, 

following is a discussion of the 

substantive changes that the rule 

proposes to make to the Final Rule and 

Proposed Rule published on October 1, 

2008 at 73 FR 56940 and 73 FR 57014, 

respectively. 

V. Identification of the Eligible 

Industries 

1. Choice of Data sets 

As stated earlier, the RAND Report, 

using various combinations of data 

sources and methods, identified twentyeight possible approaches to measuring 

the underrepresentation and substantial 

underrepresentation of WOSBs in 

Federal procurement contracting. 

Twenty of these approaches compare FY 

2006 CCR registration data to FY 2005 

FPDS/NG procurement data, while eight 

of the approaches compare the 2002 

SBO data from the five-year Economic 

Census to FYs 2002/2003 FPDS/NG 

procurement data. 

SBA proposes not to use the eight 

approaches that rely on a comparison of 

the 2002 SBO data to FYs 2002/2003 

FPDS/NG procurement data for the 

following reasons: 

• The SBO data set generally 

considers all firms in the economy, and 

not simply the number of firms that are 

ready, willing, and able to perform 


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Federal contracts. In contrast, because 

firms are generally required to register 

on the CCR database prior to bidding on 

a Federal contract, a firm’s presence in 

the CCR reflects its willingness to bid on 

a Federal contract. However, it is 

possible that a firm’s inability to bid on 

Federal contracts, and therefore its 

reluctance to register on the CCR could 

itself result from gender discrimination. 

• The SBO does not distinguish 

between WOSBs and women-owned 

businesses in general, large and small. 

The CCR, in contrast, contains selfreported information on whether a 

business is small. And the procedures 

authorized by section 8(m) are 

specifically targeted towards only small 

businesses owned by women. 

• The SBO is generally not available 

for two years after the survey is 

completed. CCR data, in contrast, are 

updated continuously and made 

available immediately. It is not clear, 

however, the degree to which data 

regarding business ownership and size 

economic size change from year to year, 

and therefore not clear how much 

weight this distinction should carry. 

In addition, the SBO data in the 

RAND Report do not disaggregate 

industry groupings beyond the two-digit 

NAICS level. In the NAS 2005 report 

examining SBA’s 2002 internal study, 

NAS criticized SBA’s use of the twodigit Major Group Standard Industrial 

Classification (SIC) industry codes as 

inadequate. The two-digit Major Group 

SIC designation corresponds to the 

current three-digit Subsector NAICS 

designation. Thus, while NAS criticized 

SBA’s use of two-digit SIC information, 

the SBO two-digit NAICS data is even 

less precise than the two-digit SIC data. 

Both the CCR and the FPDS/NG, in 

contrast, provide the capability to use 

four-digit NAICS classifications. 

SBA solicits comment on its decision, 

in light of the foregoing considerations, 

not to use any of RAND’s approaches 

that utilize the SBO data and to focus 

instead on only those approaches that 

use the CCR data. A further discussion 

on the appropriateness of the use of the 

CCR data is set forth below. 

Because the NAS criticized SBA’s use 

of the two-digit SIC code and 

recommended that SBA use industry 

detail as disaggregated as the data will 

support, SBA also proposes to eliminate 

the sixteen approaches that used CCR 

and FPDS/NG FY 2005 procurement 

data at the two and three-digit NAICS 

code level. 

Of the remaining four approaches, 

two are based on full sample results, 

while the other two are based on 

trimmed sample results (eliminating the 

top and bottom 0.5 percent of the data). 

The RAND Report found little benefit to 

trimming the sample, and placed more 

weight on the full sample results. Based 

on RAND’s finding, SBA proposes to 

eliminate the two approaches based on 

the trimmed-sample results. 

This leaves two possible approaches, 

both of which use 2004 CCR and 2005 

FPDS/NG procurement data at the fourdigit NAICS code level. 

2. Numbers and Dollars Approaches 

After careful analysis of the comments 

on SBA’s 2007 and 2008 Proposed Rules 

and reconsidering the data and analysis 

in the RAND Report, SBA has 

determined that both of the remaining 

approaches, using numbers and dollars, 

are viable and appropriate means of 

identifying industries in which WOSBs 

are underrepresented or substantially 

underrepresented for purposes of 

section 8(m). Both approaches represent 

legitimate and complementary 

interpretations of the statutory term 

‘‘underrepresentation.’’ SBA likewise 

believes that applying the section 8(m) 

program in these industries would 

reduce the effects of the discrimination 

affecting women-owned small 

businesses, consistent with Congress’s 

goals, and that both numbers and 

dollars approaches are substantially 

related to the purpose of the Program. 

As a result, as is explained in more 

detail below, the Proposed Rule would 

amend the definitions of 

underrepresentation and substantial 

underrepresentation and identify the 

eligible industries under this Program as 

those industries in which WOSBs are 

underrepresented or substantially 

underrepresented using either the 

numbers or the dollars approach. SBA 

recognizes that this approach may 

enable competition restricted to WOSBs 

in industries where using only one or 

the other of the disparity measurement 

methodologies in the RAND study might 

not show underrepresentation of 

WOSBs in that industry. SBA therefore 

seeks comment on this proposed 

approach. 

Section 8(m) instructs SBA to 

conduct a study to identify industries in 

which small business concerns owned and 

controlled by women are underrepresented 

with respect to Federal procurement 

contracting. 

15 U.S.C. 637(m)(4). The statute does 

not specify how underrepresentation 

should be identified, or state that only 

a single disparity measure can be used 

to identify underrepresentation. SBA 

must therefore determine the 

appropriate methods for identifying 

WOSB underrepresentation, recognizing 

that it is not bound to any one disparity 

measure to achieve that goal. As 

discussed above, the dollars approach 

compares the proportion of the dollar 

value of contracts in a particular NAICS 

code awarded to WOSBs with the 

proportion of gross receipts (revenues) 

in that NAICS code earned by WOSBs. 

The numbers approach compares the 

proportion of contracts (calculated in 

terms of number of contracts) awarded 

to WOSBs in a particular NAICS code 

with the number of WOSBs in that 

particular NAICS code. 

After reviewing comments and 

conducting further analysis, SBA 

concludes that both approaches provide 

sound and complementary analytical 

bases for determining the industries in 

which WOSBs are underrepresented 

and substantially underrepresented. 

Specifically, underrepresentation can 

occur when WOSBs are not being 

awarded Federal contracting dollars in 

proportion to their economic 

representation (measured by their gross 

receipts) in an industry. This might 

occur if, for example, WOSBs were 

awarded contracts in numbers 

proportional to their numerical 

representation in an industry, but 

received much less in Federal 

contracting dollars than their nonWOSB counterparts. But 

underrepresentation can also occur 

where there is disparity in the number 

of contracts being awarded to WOSBs, 

even if there is no measured disparity in 

contract dollars, due to a handful of 

WOSBs winning large-dollar contracts. 

Indeed, as the RAND Report results 

show, during FY 2005, the top WOSB 

firm was awarded $673 million dollars 

in contracts, or 6 percent of the value of 

all Federal prime contracts awarded to 

WOSBs ($10.5 billion dollars). In 

addition, the top 10 WOSBs garnered 

$1.6 billion, or 15 percent of Federal 

prime contracts going to WOSBs, and 

the top 25 WOSBs were awarded $2.1 

billion, or 20 percent of Federal prime 

contracts going to WOSBs. Accordingly, 

the number of contracts, regardless of 

size, is a valid alternative measure of 

whether WOSBs have been offered 

equality of opportunity. 

It is true that the statutory goal for 

WOSB participation in government 

contracting is expressed in terms of 

dollars. However, upon further analysis, 

SBA does not believe that this fact 

counsels against use of a numbers 

approach for purposes of identifying the 

industries in which the WOSB Program 

should operate. The 5 percent 

participation goal—which appears in a 

different section of the statute from 

section 8(m)—is a measure of the total 

volume of Government-awarded prime 

contracts and subcontracts that, ideally, 

will be awarded to WOSBs each year. 


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7This feature of the CCR database has no effect 

on disparity ratios calculated according to the 

numbers method, since that method does not make 

reference to firms’ gross receipts. 

8For instance, although size may be relevant to 

the ability to perform certain work, RAND found 

that small firms successfully competed for Federal 

contracts, and that it was not possible to identify 

a natural break point in contract size beyond which 

small businesses generally could not compete. 

The goal includes both contracts 

awarded under the section 8(m) 

program and contracts awarded in 

industries deemed ineligible for that 

program. Section 8(m)’s 

‘‘underrepresent[ation]’’ requirement, in 

contrast, concerns the identification of 

industries in which the statutorily 

prescribed contracting assistance to 

WOSBs should be permitted. There is 

no basis in the statutory language for 

determining that ‘‘underrepresentation’’ 

for purposes of authorizing specific 

contracting assistance to WOSBs must 

be measured by the same metric as the 

total volume of Federal contracts 

awarded to WOSBs for purposes of an 

overall participation goal. As discussed 

above, the numbers approach identifies 

a valid and important meaning of 

‘‘underrepresentation’’ that may exist 

even in situations where the dollars 

approach does not identify 

underrepresentation. 

SBA recognizes that these different 

means of measuring and evaluating 

underrepresentation are tools to identify 

those industries in which competition 

restricted to WOSBs will be authorized. 

Where different analytical 

methodologies yield different outcomes 

on the issue of WOSB 

underrepresentation in a particular 

industry, SBA must identify a 

reasonable means for evaluating, 

reconciling and applying these 

methodologies in order to serve the 

statutory goal of improving WOSBs 

equal access to Federal contracting in 

those industries where WOSBs are 

underrepresented. SBA therefore seeks 

comment on its proposed approaches to 

identifying underrepresentation. 

3. Appropriateness of Using the CCR 

Database 

Comments on the prior Proposed 

Rules raised concerns about the RAND 

study’s use of revenue data from the 

CCR database, concerns SBA noted in 

its withdrawn 2008 Final Rule. One 

concern centered on the way vendors, 

i.e., businesses registering for Federal 

contracts, input data into the CCR. As 

described above, the CCR database 

reflects each firm’s total revenue in 

every NAICS code associated with the 

firm, rather than the amount of revenue 

associated with the particular NAICS 

code at issue. SBA noted in its 2007 

Proposed Rule that this feature of the 

CCR data might result in overstating 

firms’ revenues in some or all NAICS 

codes. 

At least one commenter, in response 

to a prior version of the rule, asserted 

that the CCR data only takes into 

consideration current Federal 

contractors, whereas the SBO data could 

include all WOSB that are ready, willing 

and able to perform Federal work. A 

further potential viewpoint is that when 

using the SBO data set, the RAND Study 

found underrepresentation in a smaller 

number of industries, which could 

imply that women-owned firms were 

‘‘over-represented’’ in numerous other 

industries in terms of the dollars of 

Federal procurement relative to their 

size in the economy. Consequently, it 

might be asserted that using the CCR 

data will allow set-asides in industries 

where other credible data (SBO data) 

show women-owned small businesses 

are not underrepresented in terms of 

Federal procurement. 

Based on further analysis, SBA has 

concluded that the CCR data set is the 

best available data to use to determine 

the availability component of the 

disparity rations. First, the fact that the 

CCR database reflects each firm’s total 

revenue in every NAICS code associated 

with the firm, rather than the amount of 

revenue associated with the particular 

NAICS code at issue, does not render 

unreliable the disparity ratios calculated 

using the dollars component of the CCR 

database.7 As previously discussed, the 

dollars-based disparity ratios are 

themselves based on a comparison 

between two different ratios: the value 

of the government contracts awarded to 

WOSBs in a particular industry 

compared to the value of all government 

contracts awarded in that industry, on 

the one hand; and the gross receipts (in 

the economy at large) of WOSBs 

registered in the CCR database for that 

industry compared to the gross receipts 

for all businesses registered for that 

industry, on the other. The numerator of 

this ratio—the value of government 

contracts awarded to WOSBs and to 

industries in general within a given 

industry code—is not calculated using 

the CCR database. 

In addition, with respect to the 

denominator, SBA believes that it is 

reasonable to assume that WOSBs and 

non-WOSBs register in the CCR 

database and identify industries for 

which they are available in a similar 

manner. Thus, if a WOSB in a particular 

kind of business registers in (and 

effectively overstates its revenues in) 

three NAICS codes, a non-WOSB in the 

same kind of business is likely to 

register in (and overstate its revenues in) 

the same three NAICS codes. And 

because the denominator of the dollarsbased disparity ratio is calculated based 

on a comparison between gross receipts 

earned by WOSBs and non-WOSBs, 

rather than the absolute values of those 

receipts, the potential over-reporting of 

revenue in each NAICS code does not 

raise serious concerns about the 

reliability of the dollars analysis of the 

RAND study. 

SBA has also concluded the CCR 

database appropriately captures those 

firms ready, willing and able to compete 

for Federal contracts. The firms in the 

CCR database have indicated by 

registering to submit an offer on Federal 

prime contracts that they are ‘‘willing’’ 

to perform work on such contracts and 

have self-identified as firms that are 

ready and able to perform such work. 

RAND’s review of the data identified no 

additional means of determining which 

firms are ready and able to work on 

these contracts.8 However, RAND 

ensured that the firms each had at least 

one employee as a ‘‘proxy for ‘able.’ ’’ 

RAND Study at 30. Further, because the 

SBO data generally considers all firms 

in the economy, it is possible that it may 

actually overestimate the number of 

firms that are ready, willing and able to 

perform Federal contracts, thus 

potentially overestimating 

underrepresentation. 

Although the CCR data account for a 

firm’s willingness to submit an offer and 

receive a Federal contract without also 

expressly accounting for firm 

qualifications or abilities, SBA believes 

that the CCR data is nevertheless an 

appropriate measure of firm availability. 

Although some contracting assistance 

programs may rely on actual bidder lists 

as the utilized measure of ready, 

willing, and able firms, see, e.g., Eng’g 

Contractors Ass’n of S. Fla., Inc. v. 

Metro. Dade County, 122 F.3d 895, 912 

(11th Cir. 1997), some programs do not, 

and courts have upheld such programs 

against challenges. See Concrete Works 

of Colorado, Inc. v. City and County of 

Denver, 321 F.3d 950, 983 (10th Cir. 

2003) (rejecting argument that 

underutilization must be measured by 

examining ‘‘only those firms actually 

bidding on City construction projects’’). 

In Concrete Works, the court noted that 

even those firms that did submit bids 

might be unqualified, so that the city 

would always have to make some 

assumption about qualifications, and 

further observed that bidder lists might 

not capture all firms that are qualified. 

Id. The court concluded that disparity 

studies may make assumptions about 

qualifications ‘‘as long as the same 


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assumptions can be made for all firms.’’ 

Id.; cf. Adarand Constructors, Inc. v. 

Slater, 228 F.3d 1147, 1173 (2000) 

(noting that there was no evidence in 

the record that ‘‘those minority 

subcontractors who have been utilized 

have performed inadequately or 

otherwise demonstrated a lack of 

necessary qualifications’’). The court 

also noted that a firm’s ability to 

perform contracts is not static: firms can 

generally perform services by hiring 

additional employees or using 

subcontractors. Concrete Works, 321 

F.3d at 981. Of course, to the extent that 

the age and size of a firm may 

themselves be effectively limited by 

barriers tied to historical discrimination, 

using these factors to assess capacity 

and availability may in some instances 

extend the effects of past discrimination 

into this statistical assessment. 

For the reasons stated above, this 

Proposed Rule proposes to evaluate 

underrepresentation and substantial 

underrepresentation by using the CCR 

database and applying both the numbers 

and dollars approaches to identify 

eligible industries. Using this 

methodology, the RAND study found 

one hundred and nine (109) year-2002 

NAICS codes in which WOSBs were 

either underrepresented or substantially 

underrepresented. 

Because SBA has received comments 

on this issue in the past, and there is a 

more detailed data set available (SBO 

data), it is interested in hearing from the 

public about this proposal to utilize the 

CCR data set, and specifically requests 

comments on whether the WOSB 

Program should operate, or whether its 

operation should require special 

justification, in sectors where womenowned businesses appear not be 

underrepresented based on other data. 

4. The Eligible Industry Codes 

NAICS codes are revised every five 

years (in the years ending in ’2’ and ’7’). 

RAND used the 2002 NAICS codes in its 

study. All but three of the 109 2002 

NAICS codes identified by RAND 

correspond with the current 2007 

NAICS codes. The three 2002 NAICS 

codes which do not correspond are: 

5161—Internet Publishing and 

Broadcasting; 5173— 

Telecommunications Resellers; and 

5181—Internet Service Providers and 

Web Search Portals. However, these 

three 2002 NAICS codes were made part 

of other NAICS codes in 2007 that were 

also designated by RAND as 

substantially underrepresented—2002 

NAICS code 5161 is now part of 2007 

NAICS code 5191; 2002 NAICS code 

5173 is now a part of 2007 NAICS code 

5179; and 2002 NAICS code 5181 is 

now split between 2007 NAICS codes 

5171 and 5179. Because the RAND 

study found NAICS codes 5191, 5179 

and 5171 also to be substantially 

underrepresented, the change in NAICS 

code affects only the designation of 

industries to the extent that there are 

106 2007 NAICS codes instead of 109 

2002 NAICS codes but does not affect 

the types of WOSBs eligible under the 

WOSB Program. 

However, the WOSB Program will not 

operate in three of the 106 2007 NAICS 

codes in sector 92 (2002 and 2007) 

because those NAICS codes do not 

apply to the private sector. These 

NAICS codes are: 9211—Executive, 

Legislative, and other General 

Government Support; 9231— 

Administration of Human Resource 

Programs; and 9281—National Security 

and International Affairs. Firms in these 

NAICS codes are: 

Federal, state, and local government 

agencies which administer and oversee 

government programs and activities that are 

not performed by private establishments, 

see 13 CFR 121.201 n. 19, and contracts 

are not classified with this NAICS code. 

See 13 CFR 121.402(b). 

In addition, twenty of the 106 NAICS 

codes in sectors 42, 44, and 45 (2002 

and 2007) are not available for 

contracting assistance under the 

Program. These industries codes are: 

4231—Motor Vehicle and Motor Vehicle 

Parts and Supplies Merchant 

Wholesalers; 4232—Furniture and 

Home Furnishing Merchant 

Wholesalers; 4233—Lumber and Other 

Construction Materials Merchant 

Wholesalers; 4234—Professional and 

Commercial Equipment and Supplies 

Merchant Wholesalers; 4236—Electrical 

and Electronic Goods Merchant 

Wholesalers; 4239—Miscellaneous 

Durable Goods Merchant Wholesalers; 

4241—Paper and Paper Product 

Merchant Wholesalers; 4243—Apparel, 

Piece Goods, and Notions Merchant 

Wholesalers; 4246—Chemical and 

Allied Products Merchant Wholesalers; 

4248—Beer, Wine, and Distilled 

Alcoholic Beverage Merchant 

Wholesalers; 4249—Miscellaneous 

Nondurable Goods Merchant 

Wholesalers; 4412—Other Motor 

Vehicle Dealers; 4421—Furniture 

Stores; 4422—Home Furnishings Stores; 

4431—Electronics and Appliance 

Stores; 4461—Health and Personal Care 

Stores; 4511—Sporting Goods, Hobby, 

and Musical Instrument Stores; 4532— 

Office Supplies, Stationery, and Gift 

Stores; 4541—Electronic Shopping and 

Mail-Order Houses; and 4543—Direct 

Selling Establishments. 

These twenty NAICS codes fall under 

the 2-digit NAICS code sectors 42, 44 

and 45, which cover wholesalers and 

retailers. Contracts are not classified 

with these NAICS codes. See 13 CFR 

121.402(b). SBA regulations specifically 

state that sectors 42, 44 and 45 are ‘‘not 

applicable to Government procurement 

of supplies.’’ 13 CFR 121.201. These 

NAICS codes are not available for setasides because contracting officers must 

classify any contract for the 

procurement of supplies under the 

applicable manufacturing NAICS code 

(and then the nonmanufacturer rule 

would apply to any offerors that are 

nonmanufacturers of the supply). 13 

CFR 121.402. 

As a result of the above, this Proposed 

Rule treats eighty-three NAICS codes as 

eligible for Federal contracting under 

the WOSB Program. There are forty-five 

NAICS codes in which WOSBs are 

underrepresented and thirty-eight 

NAICS codes in which WOSBs are 

substantially underrepresented. 

The forty-five NAICS codes in which 

WOSBs are underrepresented are: 

2213—Water, Sewage and Other 

systems; 2361—Residential Building 

Construction; 2371—Utility System 

Construction; 2381—Foundation, 

Structure, and Building Exterior 

Contractors; 2382—Building Equipment 

Contractors; 2383—Building Finishing 

Contractors; 2389—Other Specialty 

Trade Contractors; 3149—Other Textile 

Product Mills; 3159—Apparel 

Accessories and Other Apparel 

Manufacturing; 3219—Other Wood 

Product Manufacturing; 3222— 

Converted Paper Product 

Manufacturing; 3321; Forging and 

Stamping; 3323—Architectural and 

Structural Metals Manufacturing; 

3324—Boiler, Tank, and Shipping 

Container Manufacturing; 3333— 

Commercial and Service Industry 

Machinery Manufacturing; 3342— 

Communications Equipment 

Manufacturing; 3345—Navigational, 

Measuring, Electromedical, and Control 

Instruments Manufacturing; 3346— 

Manufacturing and Reproducing 

Magnetic and Optical Media; 3353— 

Electrical Equipment Manufacturing; 

3359—Other Electrical Equipment and 

Component Manufacturing; 3369— 

Other Transportation Equipment 

Manufacturing; 4842—Specialized 

Freight Trucking; 4881—Support 

Activities for Air Transportation; 4884— 

Support Activities for Road 

Transportation; 4885—Freight 

Transportation Arrangement; 5121— 

Motion Picture and Video Industries; 

5311—Lessors of Real Estate; 5413— 

Architectural, Engineering, and Related 

Services; 5414—Specialized Design 


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Services; 5415—Computer Systems 

Design and Related Services; 5416— 

Management, Scientific, and Technical 

Consulting Services; 5419—Other 

Professional, Scientific, and Technical 

Services; 5611—Office Administrative 

Services; 5612—Facilities Support 

Services; 5614—Business Support 

Services; 5616—Investigation and 

Security Services; 5617—Services to 

Buildings and Dwellings; 6116—Other 

Schools and Instruction; 6214— 

Outpatient Care Centers; 6219—Other 

Ambulatory Health Care Services; 

7115—Independent Artists, Writers, and 

Performers; 7223—Special Food 

Services; 8111—Automotive Repair and 

Maintenance; 8113—Commercial and 

Industrial Machinery and Equipment 

(except Automotive and Electronic) 

Repair and Maintenance; and 8114— 

Personal and Household Goods Repair 

and Maintenance. 

The thirty-eight NAICS codes in 

which WOSBs are substantially 

underrepresented are: 2372—Land 

Subdivision; 3152—Cut and Sew 

Apparel Manufacturing; 3231—Printing 

and Related Support Activities; 3259— 

Other Chemical Product and 

Preparation Manufacturing; 3328— 

Coating, Engraving, Heat Treating, and 

Allied Activities; 3329—Other 

Fabricated Metal Product 

Manufacturing; 3371—Household and 

Institutional Furniture and Kitchen 

Cabinet Manufacturing; 3372—Office 

Furniture (including Fixtures) 

Manufacturing; 3391—Medical 

Equipment and Supplies 

Manufacturing; 4841—General Freight 

Trucking; 4889—Other Support 

Activities for Transportation; 4931— 

Warehousing and Storage; 5111— 

Newspaper, Periodical, Book, and 

Directory Publishers; 5112—Software 

Publishers; 5171—Wired 

Telecommunications Carriers; 5172— 

Wireless Telecommunications Carriers 

(except Satellite); 5179—Other 

Telecommunications; 5182—Data 

Processing, Hosting, and Related 

Services; 5191—Other Information 

Services; 5312—Offices of Real Estate 

Agents and Brokers; 5324—Commercial 

and Industrial Machinery and 

Equipment Rental and Leasing; 5411— 

Legal Services; 5412—Accounting, Tax 

Preparation, Bookkeeping, and Payroll 

Services; 5417—Scientific Research and 

Development Services; 5418— 

Advertising, Public Relations, and 

Related Services; 5615—Travel 

Arrangement and Reservation Services; 

5619—Other Support Services; 5621— 

Waste Collection; 5622—Waste 

Treatment and Disposal; 6114— 

Business Schools and Computer and 

Management Training; 6115—Technical 

and Trade Schools; 6117—Educational 

Support Services; 6242—Community 

Food and Housing, and Emergency and 

Other Relief Services; 6243—Vocational 

Rehabilitation Services; 7211—Traveler 

Accommodation; 8112—Electronic and 

Precision Equipment Repair and 

Maintenance; 8129—Other Personal 

Services; and 8139—Business, 

Professional, Labor, Political, and 

Similar Organizations. 

VI. Economic Disadvantage 

SBA proposes to clarify current 

§ 127.203 concerning economically 

disadvantaged women-owned small 

businesses (EDWOSBs) to address 

certain interpretations and policies that 

have been followed informally by SBA 

with respect to the 8(a) Business 

Development (BD) Program and that 

SBA believes would apply to the WOSB 

Program as well. This includes certain 

interpretations and policies SBA 

recently set forth in a rule proposing to 

amend the 8(a) BD regulations. See 74 

FR 55694 (Oct. 28, 2009). For example, 

this Proposed Rule specifically states 

that SBA does not take community 

property laws into account when 

determining economic disadvantage if 

the woman has no ownership interest. 

This means that property that is legally 

in the name of the husband would be 

considered wholly the husband’s, 

whether or not the couple lived in a 

community property state. Since 

community property laws are usually 

applied when a couple separates, and 

since spouses in community property 

states generally have the freedom to 

keep their property separate while they 

are married, SBA proposes to treat 

property owned solely by one spouse as 

that spouse’s property for economic 

disadvantage determinations. However, 

if both spouses own the property, SBA 

would attribute a half interest in such 

property to the woman claiming 

economic disadvantage, unless there is 

evidence to show that the interest in 

such property is greater or lesser. 

This policy also results in equal 

treatment for applicants in community 

and non-community property states. In 

addition, and along the same lines, SBA 

proposes to provide that it may consider 

a spouse’s financial situation in 

determining an individual’s access to 

capital and credit. 

SBA has also proposed exempting 

funds in Individual Retirement 

Accounts (IRAs) and other official 

retirement accounts from the calculation 

of net worth, provided that the funds 

cannot currently be withdrawn from the 

account prior to retirement age without 

a significant penalty. While such funds 

can be useful to an applicant seeking 

credit, SBA believes that retirement 

accounts are not assets to be currently 

enjoyed; rather, they are held for 

purposes of ensuring future income 

when an individual is no longer 

working. SBA believes it is unfair to 

count those assets as current assets. The 

basis for this proposal stems from SBA’s 

experience with the 8(a) BD Program, 

where it has found that including IRAs 

and other retirement accounts in the 

calculation of an individual’s net worth 

does not serve to disqualify wealthy 

individuals. Instead, such an exclusion 

has worked to make middle and lower 

income individuals ineligible to the 

extent they have invested prudently in 

accounts to ensure income at a time in 

their lives when they are no longer 

working. 

SBA is cognizant of the potential for 

abuse of this proposed provision, with 

individuals attempting to hide current 

assets in funds labeled ‘‘retirement 

accounts.’’ SBA does not believe such 

attempts to remove certain assets from 

an individual’s economic disadvantage 

determination would be appropriate. 

Therefore, this Proposed Rule states that 

in order for funds not to be counted in 

an economic disadvantage 

determination, the funds cannot be 

currently withdrawn from the account 

without a significant penalty. A 

significant penalty would be one equal 

or similar to the additional income tax 

on early distributions under section 

72(t) of the Internal Revenue Code. In 

order for SBA to determine whether 

funds invested in a specific account 

labeled a ‘‘retirement account’’ may be 

excluded from a woman’s net worth 

calculation, the woman must provide to 

SBA information about the terms and 

conditions of the account. SBA is 

interested in hearing from the public 

about this proposal, and specifically 

requests comments on how best to 

exclude legitimate retirement accounts 

without affording others a mechanism to 

circumvent the economic disadvantage 

criterion. 

SBA has also proposed exempting 

income from a corporation taxed under 

Subchapter S of Chapter 1 of the 

Internal Revenue Code (S corporation) 

from the calculation of both income and 

net worth to the extent such income is 

reinvested in the firm or used to pay 

taxes arising from the normal course of 

operations of an S corporation. 

Although the income of an S 

corporation flows through and is taxed 

to individual shareholders in 

accordance with their interest in the S 

corporation for Federal tax purposes, 

SBA will take such income into account 

for economic disadvantage purposes 


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10038 Federal Register / Vol. 75, No. 42 / Thursday, March 4, 2010 / Proposed Rules 

only if it is not reinvested in the 

business or used to pay the taxes. This 

proposal would result in equal 

treatment of corporate income for 

corporations taxed under Subchapter C 

of Chapter 1 of the Internal Revenue 

Code (C corporations) and S 

corporations. In cases where that 

income is reinvested in the firm or used 

to pay taxes arising from the normal 

course of operations of the S corporation 

and not retained by the woman, SBA 

believes it should be treated the same as 

C corporation income for purposes of 

determining economic disadvantage. In 

order to be excluded, the owner of the 

S corporation would be required to 

clearly demonstrate that the S 

corporation distribution was used to pay 

taxes or was reinvested back into the S 

corporation within 12 months of the 

distribution of income. Conversely, the 

woman owner of an S corporation could 

not subtract S corporation losses from 

the income paid by the S corporation to 

her or from her total income from 

whatever source. S corporation losses, 

like C corporation losses, are losses 

incurred by the company, not by the 

individual, and based upon the legal 

structure of the corporation and the 

protections afforded the principals 

through this structure, the individual is 

not personally liable for the debts 

representing any of those liabilities. 

Thus, it is inappropriate to consider 

these personal losses and women 

should not be able to use them to reduce 

their personal incomes for purposes of 

the economic disadvantage. 

SBA also proposes to provide that it 

would presume that a woman is not 

economically disadvantaged if her 

yearly income averaged over the past 

two years exceeds $200,000. SBA 

considered incorporating into the 

regulation the present policy for the 8(a) 

BD Program that a woman is not 

economically disadvantaged if her 

adjusted gross income exceeds that for 

the top two percent of all wage earners 

according to IRS statistics. Under that 

approach for the 8(a) BD Program, SBA 

compares the income of the individual 

claiming disadvantage to the most 

currently available, final IRS income tax 

statistics. In some cases, SBA may be 

comparing IRS statistics relating to one 

tax year to an individual’s income from 

a succeeding tax year because final IRS 

statistics are not available for that 

succeeding tax year. 

Although that policy has been upheld 

by SBA’s Office of Hearings and 

Appeals (OHA) and the Federal courts 

(see SRS Technologies v. United States, 

894 F. Supp. 8 (D.D.C. 1995); Matter of 

Pride Technologies, Inc., SBA No. 557 

(1996) SBA No. MSB–557) for the 8(a) 

BD Program, SBA believes that a straight 

line numerical figure is more 

understandable, easier to implement, 

and avoids any appearance of unfair 

treatment when statistics for one tax 

year are compared to an income level 

for another tax year. Therefore, SBA is 

proposing for the WOSB Program an 

income level of $200,000 because that 

figure closely approximates the income 

level corresponding to the top two 

percent of all wage earners, which has 

been upheld as a reasonable indicator of 

a lack of economic disadvantage. 

Although a $200,000 income may seem 

unduly high as a benchmark, we note 

that this amount is being used only to 

presume, without more information, 

that the woman is not economically 

disadvantaged. SBA may consider 

incomes lower than $200,000 as 

indicative of lack of economic 

disadvantage. However, it would not 

presume lack of economic disadvantage 

in that case. It may also consider income 

in connection with other factors when 

determining a woman’s access to 

capital. SBA specifically requests 

comments on both the straight line 

approach proposed and the current 

comparison of income levels to the IRS 

statistics. 

This proposed regulation would 

permit applicants to rebut the 

presumption of lack of economic 

disadvantage upon a showing that the 

income is not indicative of lack of 

economic disadvantage. For example, 

the presumption could be rebutted by a 

showing that the income was unusual 

(inheritance) and is unlikely to occur 

again. The presumption could also be 

rebutted, for example, by showing that 

the earnings were winnings that are 

offset by related losses as in the case of 

winnings and losses from gambling 

resulting in a net gain far less than the 

actual gambling income received. SBA 

may still consider any unusual earnings 

or windfalls as part of its review of total 

assets. Thus, although an inheritance of 

$5 million, for example, may be unusual 

income and excluded from SBA’s 

determination of economic disadvantage 

based on income, it would not be 

excluded from SBA’s determination of 

economic disadvantage based on total 

assets. In such a case, a $5 million 

inheritance would render the woman 

not economically disadvantaged based 

on total assets. 

This rule also proposes to establish an 

objective standard by which a woman 

may not qualify as economically 

disadvantaged based on her total assets. 

With respect to the 8(a) BD Program, 

SBA’s findings that an individual was 

not economically disadvantaged with 

total asset levels of $4.1 million and 

$4.6 million have been upheld as 

reasonable. See Matter of Pride 

Technologies, SBA No. 557 (1996), and 

SRS Technologies v. U.S., 843 F. Supp. 

740 (D.D.C. 1994). Alternatively, and 

again with respect to the 8(a) BD 

Program, SBA’s finding that an 

individual was not economically 

disadvantaged with total assets of $1.26 

million was overturned. See Matter of 

Tower Communications, SBA No. 587 

(1997). This rule proposes to eliminate 

any confusion as to what level of total 

assets qualifies as economic 

disadvantage for EDWOSB purposes as 

has occurred in the 8(a) BD Program. 

Under this Proposed Rule, a woman 

generally would not be considered 

economically disadvantaged if the fair 

market value of all her assets exceeds $3 

million. While this Proposed Rule 

would exclude retirement accounts from 

a woman’s net worth in determining 

economic disadvantage, it would not 

exclude such amounts from her total 

assets in determining economic 

disadvantage on that basis. 

VII. Certification 

The Act sets forth the certification 

criteria for the WOSB Program. 

Specifically, the Act states that a WOSB 

or EDWOSB must: (1) Be certified by a 

Federal agency, a State government, or 

a national certifying entity approved by 

the Administrator, as a small business 

concern owned and controlled by 

women; or, (2) certify to the contracting 

officer that it is a small business 

concern owned and controlled by 

women and provide adequate 

documentation, in accordance with 

standards established by SBA, to 

support such certification. 

The legislative history for this 

statutory provision explains that 

certification by a Federal agency, State 

government or national certifying entity 

should be acceptable if it tracks the 

statutory and regulatory definition of 

WOSB and EDWOSB. H.R. Rep. No. 

106–879, at 4 (2000). Consequently, to 

identify approved third-party certifiers, 

SBA will review those entities that 

certify WOSBs and designate those with 

certification criteria meeting the 

requirements of this program at a later 

date. 

In addition, the legislative history 

explains that 

the Committee expects the contracting 

officers will accept self-certification so long 

as the documentation provided along with 

the response to the solicitation enables the 

contracting officer to determine that 

the WOSB or EDWOSB meets the 

requirements of the program. Id. As a 

result of the statutory provision, and the 


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supporting legislative history, SBA has 

proposed a rule that will require WOSBs 

and EDWOSBs to first certify their 

status in the Online Representations and 

Certifications Application (ORCA) at 

https://orca.bpn.gov, and then provide 

the contracting officer with certain 

documents verifying their status. 

SBA believes that the statute and 

supporting legislative history permit 

several means for providing the 

requisite documents to the contracting 

officer. Therefore, SBA is proposing to 

establish a repository (WOSB Program 

Repository) for the documents where 

WOSBs and EDWOSBs that certify in 

ORCA would submit the documents. 

The documents would be stored in a 

secure, web-based environment that 

would be accessible to WOSB and 

EDWOSB applicants, contracting 

community and SBA. 

This idea is analogous to a system 

already utilized in the government. CCR 

is a web-enabled government-wide 

application that collects, validates, stores, 

and disseminates business information about 

the Federal government’s trading partners in 

support of the contract award, grants, and the 

electronic payment processes. 

See Federal Agency Registration FAQs, 

publicly available at https:// 

www.bpn.gov/FAR/docs/FAQ.pdf. 

Although CCR is used to electronically 

share secure and encrypted data with 

the Federal agencies’ finance offices to 

facilitate paperless payments through 

electronic funds transfer, and does not 

necessarily serve as a repository for 

documents, the concept would be 

similar. 

WOSBs and EDWOSBs that certify in 

ORCA would be required to submit 

documents verifying their status to the 

repository at the time of initial selfcertification in ORCA and then every 

year thereafter, and in addition if there 

is a change in such information that 

would necessitate the submission of 

supplemental or new information. The 

contracting officer would be able to 

access the documents prior to contract 

award to review the submitted 

documents. This proposal would mean 

that WOSBs and EDWOSBs would not 

have to submit documents each time 

they receive a WOSB or EDWOSB 

contract. 

SBA also proposes that WOSBs or 

EDWOSBs will submit certain 

documents at the time of self 

certification in ORCA and then must 

submit additional documents in the 

event of a protest or program 

examination. SBA intends for those 

additional documents to be placed into 

the document repository, as well. 

With respect to the specific 

documents that must be submitted at 

the time of initial certification (and 

updated anytime after) the Proposed 

Regulation sets forth several documents 

that will assist in verifying ownership 

and control. For those WOSBs and 

EDWOSBs that have not received an 

approved third-party certification, SBA 

reviewed the requirements and 

standards established for a similar 

program, the 8(a) BD Program, in 

determining which documents must be 

provided. In the 8(a) BD Program, the 

applicant must complete a standard 

form and provide SBA with appropriate 

documents to support and verify the 

statements made in the application. 

Using the 8(a) BD Program application 

process as a guide, and in accordance 

with the proposed eligibility criteria for 

the WOSB Program, SBA has proposed 

that a WOSB or EDWOSB, which has 

not received a third-party certification 

from an approved certifier, provide the 

following documents to the repository: 

• WOSBs or EDWOSBs that are 

corporations would need to submit their 

articles of incorporation, stock 

certificates (both sides), stock ledger, 

shareholders’ agreements, by-laws and 

amendments. 

• WOSBs or EDWOSBs that are LLCs 

must submit their articles of 

organization (also referred to as the 

certificate of organization or articles of 

formation) and any amendments and 

operating agreement with any 

amendments. 

• WOSBs or EDWOSBs that are 

partnerships must submit an original 

and amended partnership agreement. 

In addition, all WOSBs and 

EDWOSBs must submit evidence of 

gender and U.S. citizenship for women 

(women) owners(s), such as a copy of a 

birth certificate, naturalization papers or 

passport. EDWOSBs would also need to 

submit a Form 413, Personal Financial 

Statement, for at least each woman 

claiming economic disadvantage. 

Further, all EDWOSBs or WOSBs must 

also provide a copy of the joint venture 

agreement, if applicable. 

SBA anticipates that the repository 

will also house copies of the third party 

certifications. With respect to those 

WOSBs or EDWOSBs that have received 

an approved third-party certification, 

this Proposed Rule requires that the 

WOSB or EDWOSB must provide a copy 

of the certification to the repository at 

the time of certification in ORCA. If the 

WOSB or EDWOSB has a third-party 

certification as a DOT Disadvantaged 

Business Enterprise (DBE), it must 

submit a copy of the DBE certification 

at the time of certification in ORCA 

showing that it received such 

certification because it is owned and 

controlled by women. In addition, the 

WOSB or EDWOSB must provide a 

statement identifying the woman or 

women upon whom eligibility was 

based and documents, such as birth 

certificates or passports, evidencing that 

the woman or women are citizens of the 

United States as defined by 13 CFR 

127.102. 

SBA believes that it is not necessary 

for these concerns to submit any other 

documents to verify eligibility, at that 

time, since such documents have 

already been submitted to and reviewed 

by a third party. 

SBA intends that the WOSB Program 

Repository preclude modification or 

retrieval of any document submitted; 

however, documents can be 

supplemented in a separate submission. 

This would allow the system to be a 

historical site for each change in 

documentation. This historical data may 

be useful in determining whether, over 

a period of time, the data is consistent 

rather than contradictory. 

Until SBA is able to establish a 

repository, or if the system is otherwise 

unavailable, then SBA is proposing that 

the WOSB or EDWOSBs submit the 

documents directly to the contracting 

officer prior to each WOSB or EDWOSB 

award. The contracting officer must 

retain these documents in the contract 

file so that SBA may later review the file 

for purposes of a status protest or 

eligibility examination. However, the 

WOSB or EDWOSB will also be required 

to post the documents to the WOSB 

Program Repository within thirty (30) 

days of the repository becoming 

available. 

The Proposed Rule also explains the 

consequences for failure to provide the 

required documents and the contracting 

officer’s duties in those situations. If the 

apparent successful WOSB or EDWOSB 

fails to provide any of the required 

documents, the contracting officer 

cannot make a WOSB or EDWOSB 

award to that concern and must file a 

protest with SBA. In addition, if the 

contracting officer believes that the 

apparent successful offeror does not 

meet the requirements of the program, 

the contracting officer must file a protest 

with SBA concerning the status of the 

concern. 

In addition to the documents, SBA 

proposes that the WOSB or EDWOSB 

represent that it meets all of the 

eligibility of the program. Therefore, 

SBA is proposing that the WOSB 

represent the information in Table 1, 

Proposed WOSB Representations in 

ORCA, to ORCA. 


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10040 Federal Register / Vol. 75, No. 42 / Thursday, March 4, 2010 / Proposed Rules 

Proposed WOSB Representations in 

ORCA 

(i) It is certified as a WOSB by a 

certifying entity approved by SBA, the 

certifying entity has not issued a 

decision currently in effect finding that 

the concern does not qualify as a WOSB, 

and there have been no changes in its 

circumstances affecting its eligibility 

since its certification. 

b Yes b No b N/A 

(ii) It is certified as a as a U.S. 

Department of Transportation (DOT) 

Disadvantaged Business Enterprise 

(DBE) because it is owned and 

controlled by one or more women who 

are citizens of the United States, as 

defined in 13 CFR § 127.102. 

b Yes b No b N/A 

(iii) It is certified by the U.S. Small 

Business Administration as an 8(a) BD 

Program Participant due to the owner(s) 

status as an economically disadvantaged 

woman (or women). 

b Yes b No b N/A 

(iv) If a corporation, the stock ledger 

and stock certificates evidence that at 

least 51 percent of each class of voting 

stock outstanding and 51 percent of the 

aggregate of all stock outstanding is 

unconditionally and directly owned by 

one or more women. In determining 

unconditional ownership of the 

concern, any unexercised stock options 

or similar agreements held by a woman 

will be disregarded. However, any 

unexercised stock option or other 

agreement, including the right to 

convert non-voting stock or debentures 

into voting stock, held by any other 

individual or entity will be treated as 

having been exercised. 

b Yes b No b N/A 

(v) If a partnership, the partnership 

agreement evidences that at least 51 

percent of each class of partnership 

interest is unconditionally and directly 

owned by one or more women. 

b Yes b No b N/A 

(vi) If a limited liability company, the 

articles of organization and any 

amendments, and operating agreement 

and amendments, evidence that at least 

51 percent of each class of member 

interest is unconditionally and directly 

owned by one or more women. 

b Yes b No b N/A 

(vii) The birth certificates, 

naturalization papers, or passports for 

owners who are women show that the 

company is at least 51% owned and 

controlled by women who are U.S. 

citizens. 

b Yes b No 

(viii) The ownership by women is not 

subject to any conditions, executory 

agreements, voting trusts, or other 

arrangements that cause or potentially 

cause ownership benefits to go to 

another. 

b Yes b No 

(ix) The 51 percent ownership by 

women is not through another business 

entity (including employee stock 

ownership plan) that is, in turn, owned 

and controlled by one or more women. 

b Yes b No 

(x) The 51 percent ownership by 

women is held through a trust, the trust 

is revocable, and the woman is the 

grantor, a trustee, and the sole current 

beneficiary of the trust. 

b Yes b No b N/A 

(xi) The management and daily 

business operations of the concern are 

controlled by one or more women. 

Control means that both the long-term 

decision making and the day-to-day 

management and administration of the 

business operations are conducted by 

one or more women. 

b Yes b No 

(xii) A woman holds the highest 

officer position in the concern and her 

resume evidences that she has the 

managerial experience of the extent and 

complexity needed to run the concern. 

b Yes b No 

(xiii) The woman manager does not 

have the technical expertise or possess 

the required license for the business but 

has ultimate managerial and supervisory 

control over those who possess the 

required licenses or technical expertise. 

b Yes b No b N/A 

(xiv) The woman who holds the 

highest officer position of the concern 

manages it on a full-time basis and 

devotes full-time to the business 

concern during the normal working 

hours of business concerns in the same 

or similar line of business. 

b Yes b No 

(xv) The woman who holds the 

highest officer position does not engage 

in outside employment that prevents 

her from devoting sufficient time and 

attention to the daily affairs of the 

concern to control its management and 

daily business operations. 

b Yes b No 

(xvi) If a corporation, the articles of 

incorporation and any amendments, 

articles of conversion, by-laws and 

amendments, shareholder meeting 

minutes showing director elections, 

shareholder meeting minutes showing 

officer elections, organizational meeting 

minutes, all issued stock certificates, 

stock ledger, buy-sell agreements, stock 

transfer agreements, voting agreements, 

and documents relating to stock options, 

including the right to convert nonvoting stock or debentures into voting 

stock evidence that one or more women 

control the Board of Directors of the 

concern. Women are considered to 

control the Board of Directors when 

either: (1) one or more women own at 

least 51 percent of all voting stock of the 

concern, are on the Board of Directors 

and have the percentage of voting stock 

necessary to overcome any super 

majority voting requirements; or (2) 

women comprise the majority of voting 

directors through actual numbers or, 

where permitted by state law, through 

weighted voting. 

b Yes b No b N/A 

(xvii) If a partnership, the partnership 

agreement evidences that one or more 

women serve as general partners, with 

control over all partnership decisions. 

b Yes b No b N/A 

(xviii) If a limited liability company, 

the articles of organization and any 

amendments, and operating agreement 

and amendments evidence that one or 

more women serve as management 

members, with control over all 

decisions of the limited liability 

company. 

b Yes b No b N/A 

(xix) No males or other entity exercise 

actual control or have the power to 

control the concern. 

b Yes b No 

(xx) SBA, in connection with an 

examination or protest, has not issued a 

decision currently in effect finding that 

this company does not qualify as a 

WOSB. 

b Yes b No 

(xxi) All required documents 

verifying eligibility for a WOSB 

requirement have been submitted to the 

WOSB Program Repository, including 

any supplemental documents if there 

have been changes since the last 

representation. 

b Yes b No 

In addition, the EDWOSB must 

represent the information in Table 2, 

Proposed EDWOSB Representations in 

ORCA, to ORCA. 


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Proposed EDWOSB Representations in 

ORCA 

(i) It is certified as an EDWOSB by a 

certifying entity approved by SBA, the 

certifying entity has not issued a 

decision currently in effect finding that 

the concern does not qualify as a 

EDWOSB, and there have been no 

changes in its circumstances affecting 

its eligibility since its certification. 

b Yes b No b N/A 

(ii) It is certified as a as a U.S. 

Department of Transportation (DOT) 

Disadvantaged Business Enterprise 

(DBE) because it is owned and 

controlled by one or more women who 

are citizens of the United States, as 

defined in 13 CFR § 127.102. 

b Yes b No b N/A 

(iii) It is certified by the U.S. Small 

Business Administration as an 8(a) BD 

Program Participant due to the owner(s) 

status as an economically disadvantaged 

woman (or women). 

b Yes b No b N/A 

(iv) If a corporation, the stock ledger 

and stock certificates evidence that at 

least 51 percent of each class of voting 

stock outstanding and 51 percent of the 

aggregate of all stock outstanding is 

unconditionally and directly owned by 

one or more women who are 

economically disadvantaged. In 

determining unconditional ownership 

of the concern, any unexercised stock 

options or similar agreements held by 

an economically disadvantaged woman 

will be disregarded. However, any 

unexercised stock option or other 

agreement, including the right to 

convert non-voting stock or debentures 

into voting stock, held by any other 

individual or entity will be treated as 

having been exercised. 

b Yes b No b N/A 

(v) If a partnership, the partnership 

agreement evidences that at least 51 

percent of each class of partnership 

interest is unconditionally and directly 

owned by one or more economically 

disadvantaged women. 

b Yes b No b N/A 

(vi) If a limited liability company, the 

articles of organization and any 

amendments, and operating agreement 

and amendments, evidence that at least 

51 percent of each class of member 

interest is unconditionally and directly 

owned by one or more economically 

disadvantaged women. 

b Yes b No b N/A 

(vii) The birth certificates, 

naturalization papers, or passports show 

that the company is at least 51% owned 

and controlled by economically 

disadvantaged women who are U.S. 

citizens. 

b Yes b No 

(viii) The ownership by economically 

disadvantaged women is not subject to 

any conditions, executory agreements, 

voting trusts, or other arrangements that 

cause or potentially cause ownership 

benefits to go to another. 

b Yes b No 

(ix) The 51 percent ownership by 

economically disadvantaged women is 

not through another business entity 

(including employee stock ownership 

plan) that is, in turn, owned and 

controlled by one or more economically 

disadvantaged women. 

b Yes b No 

(x) The 51 percent ownership by 

economically disadvantaged women is 

held through a trust, the trust is 

revocable, and the economically 

disadvantaged woman is the grantor, a 

trustee, and the sole current beneficiary 

of the trust. 

b Yes b No b N/A 

(xi) The management and daily 

business operations of the concern are 

controlled by one or more economically 

disadvantaged women. Control means 

that both the long-term decision making 

and the day-to-day management and 

administration of the business 

operations are conducted by one or 

more economically disadvantaged 

women. 

b Yes b No 

(xii) An economically disadvantaged 

woman holds the highest officer 

position in the concern and her resume 

evidences that she has the managerial 

experience of the extent and complexity 

needed to run the concern. 

b Yes b No 

(xiii) The economically disadvantaged 

woman manager does not have the 

technical expertise or possess the 

required license for the business but has 

ultimate managerial and supervisory 

control over those who possess the 

required licenses or technical expertise. 

b Yes b No b N/A 

(xiv) The economically disadvantaged 

woman who holds the highest officer 

position of the concern manages it on a 

full-time basis and devotes full-time to 

the business concern during the normal 

working hours of business concerns in 

the same or similar line of business. 

b Yes b No 

(xv) The economically disadvantaged 

woman who holds the highest officer 

position does not engage in outside 

employment that prevents her from 

devoting sufficient time and attention to 

the daily affairs of the concern to 

control its management and daily 

business operations. 

b Yes b No 

(xvi) If a corporation, the articles of 

incorporation and any amendments, 

articles of conversion, by-laws and 

amendments, shareholder meeting 

minutes showing director elections, 

shareholder meeting minutes showing 

officer elections, organizational meeting 

minutes, all issued stock certificates, 

stock ledger, buy-sell agreements, stock 

transfer agreements, voting agreements, 

and documents relating to stock options, 

including the right to convert nonvoting stock or debentures into voting 

stock evidence that one or more 

economically disadvantaged women 

control the Board of Directors of the 

concern. Economically disadvantaged 

women are considered to control the 

Board of Directors when either: (1) one 

or more economically disadvantaged 

women own at least 51 percent of all 

voting stock of the concern, are on the 

Board of Directors and have the 

percentage of voting stock necessary to 

overcome any super majority voting 

requirements; or (2) economically 

disadvantaged women comprise the 

majority of voting directors through 

actual numbers or, where permitted by 

state law, through weighted voting. 

b Yes b No b N/A 

(xvii) If a partnership, the partnership 

agreement evidences that one or more 

economically disadvantaged women 

serve as general partners, with control 

over all partnership decisions. 

b Yes b No b N/A 

(xviii) If a limited liability company, 

the articles of organization and any 

amendments, and operating agreement 

and amendments evidence that one or 

more economically disadvantaged 

women serve as management members, 

with control over all decisions of the 

limited liability company. 

b Yes b No b N/A 

(xix) No males or other entity exercise 

actual control or have the power to 

control the concern. 

b Yes b No 

(xx) The economically disadvantaged 

woman or women upon whom 

eligibility is based can demonstrate that 

their ability to compete in the free 


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10042 Federal Register / Vol. 75, No. 42 / Thursday, March 4, 2010 / Proposed Rules 

enterprise system has been impaired 

due to diminished capital and credit 

opportunities as compared to others in 

the same or similar line of business (not 

considering community property laws 

when determining economic 

disadvantage when the woman has no 

ownership interest in the property). 

b Yes b No 

(xxi) The economically disadvantaged 

woman upon whom eligibility is based 

has read the SBA’s regulations defining 

economic disadvantage and can 

demonstrate that her personal net worth 

is less than $750,000, excluding her 

ownership interest in the concern and 

her equity interest in her primary 

personal residence. 

b Yes b No 

(xxii) The personal financial 

condition of the woman claiming 

economic disadvantage, including her 

personal income for the past two years 

(including bonuses, and the value of 

company stock given in lieu of cash), 

her personal net worth and the fair 

market value of all of her assets, 

whether encumbered or not, evidences 

that she is economically disadvantaged. 

b Yes b No 

(xxiii) The adjusted gross income of 

the woman claiming economic 

disadvantage averaged over the two 

years preceding the certification does 

not exceed $200,000. 

b Yes b No 

(xxiv) The adjusted gross income of 

the woman claiming economic 

disadvantage averaged over the two 

years preceding the certification exceeds 

$200,000; however, the woman can 

show that this income level was 

unusual and not likely to occur in the 

future, that losses commensurate with 

and directly related to the earnings were 

suffered, or that the income is not 

indicative of lack of economic 

disadvantage. 

b Yes b No b N/A 

(xxv) The fair market value of all the 

assets (including her primary residence 

and the value of the business concern 

but excluding funds invested in an 

Individual Retirement Account or other 

official retirement account that are 

unavailable until retirement age without 

a significant penalty) of the woman 

claiming economic disadvantage does 

not exceed $3 million. 

b Yes b No 

(xxvi) The woman claiming economic 

disadvantage has not transferred any 

assets within two years of the date of the 

certification. 

b Yes b No 

(xxvii) The woman claiming 

economic disadvantage has transferred 

assets within two years of the date of the 

certification. However, the transferred 

assets were: (1) to or on behalf of an 

immediate family member for that 

individual’s education, medical 

expenses, or some other form of 

essential support; or (2) to an immediate 

family member in recognition of a 

special occasion, such as a birthday, 

graduation, anniversary, or retirement. 

b Yes b No b N/A 

(xxviii) SBA, in connection with an 

examination or protest, has not issued a 

decision currently in effect finding that 

this company does not qualify as a 

EDWOSB. 

b Yes b No 

(xxix) All required documents 

verifying eligibility for the EDWOSB 

requirement have been submitted to the 

WOSB Program Repository, including 

any supplemental documents if there 

have been changes since the last 

representation. 

b Yes b No 

SBA is specifically requesting 

comments on all of these approaches to 

certification, or other alternatives that 

would meet the statutory requirements 

and ensure that only eligible small 

businesses receive WOSB or EDWOSB 

contracts. 

VIII. Eligibility Examinations 

SBA also proposes amending current 

§ 127.400 concerning eligibility 

examinations. The rule currently states 

that SBA will conduct an examination 

to determine eligibility at the time of the 

examination. However, the Act states 

that the Administrator shall establish 

procedures for verification of the 

accuracy of any certifications and those 

procedures may provide for program 

examinations, including random 

examinations. 15 U.S.C. 637(m)(5). It is 

clear that the examinations are to serve 

as a mechanism against fraud, waste and 

abuse in the program. Thus, SBA 

believes that the purpose of such 

examinations is broader, and that 

examinations should be used to verify 

eligibility at any time, including when 

an EDWOSB or WOSB certifies it is 

such a concern in ORCA, CCR, or at the 

time of offer or award of a contract. 

Therefore, SBA has amended this rule to 

explain that eligibility examinations 

will be used to verify eligibility at those 

times, as well. 

In addition, this Proposed Rule states 

that SBA will conduct such 

examinations, as a way to combat fraud 

and abuse of the program. Further, as 

permitted by statute, SBA may adopt 

one or more various approaches from 

time to time and as appropriate by the 

circumstances when determining which 

WOSBs or EDWOSBs to examine. This 

may include the utilization of robust 

random sampling, as well as higher 

levels of random examinations of 

WOSBS or EDWOSBs that have received 

the most contracts or most contract 

dollars during any applicable period. 

Further, SBA may decide to conduct 

examinations when it has received 

credible information that certain 

WOSBS or EDWOSBs do not meet the 

eligibility criteria of the WOSB Program. 

As part of these examinations, the 

WOSB or EDWOSB must submit 

documents to verify its eligibility. 

Specifically, this Proposed Rule requires 

WOSBs and EDWOSBs to submit 

documents to verify eligibility, 

including those submitted under 

proposed § 127.300(c), as well as copies 

of proposals or bids submitted in 

response to an EDWOSB or WOSB 

solicitation. In addition, EDWOSBs will 

be required to submit the two most 

recent personal income tax returns 

(including all schedules and W–2 forms) 

for the women claiming economic 

disadvantage and their spouses and SBA 

Form 4506–T, Request for Tax 

Transcript Form. In some cases, SBA 

may be able to obtain those documents 

from the third-party certifier or the 

contracting officer’s contract file. 

However, because the examination 

may look at eligibility at the time of 

certification in ORCA, this Proposed 

Rule requires that WOSBs or EDWOSBs 

retain documents demonstrating 

satisfaction of the eligibility 

requirements for six (6) years from date 

of self-certification. SBA believes that 

WOSBs and EDWOSBs already retain 

this information in the ordinary course 

of business and that it does not impose 

a burden on these businesses. 

IX. Agency-by-Agency Determination 

This Proposed Rule seeks to strike 

from the 2008 Final Rule the 

requirement at § 127.501 for an agencyby-agency determination of 

discrimination. Specifically, in response 

to SBA’s June 15, 2006 Proposed Rule, 

commenters voiced concerns over the 

requirement in proposed § 127.501(b) 

that the procuring agency conduct its 

own additional analysis of its 

procurement history and make a 

determination whether the agency itself 

had discriminated against WOSBs in the 

relevant industry. The comments state 


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that this requirement would frustrate 

Congressional intent by applying an 

erroneous and overly restrictive 

standard of constitutional scrutiny. The 

comments also state that the disparity 

study analysis conducted by RAND is 

sufficient to satisfy the intermediate 

scrutiny standard that applies to the 

WOSB Program and that the agency 

determination of discrimination 

requirement exceeds what would be 

required even under the strict scrutiny 

standard applicable to classifications 

based on race and national origin. The 

comments further state that the 

requirement would inappropriately 

limit the industries in which WOSBs 

were recognized as underrepresented or 

substantially underrepresented. Lastly, 

the comments state that this 

requirement would substantially burden 

the procuring agencies and that the 

procuring agencies would avoid 

fulfilling the goals of the program to 

avoid self-incrimination and litigation. 

Based on these comments and further 

analysis, SBA agrees that an agency-byagency analysis is not required. 

First, the equal protection 

requirements of the Fifth Amendment 

establish that programs that use gender 

as a factor in distributing benefits to 

individuals must further important 

governmental objectives and employ 

means that are substantially related to 

the achievement of those objectives. See 

United States v. Virginia, 518 U.S. 515, 

533 (1996). 

In applying this standard to the 

WOSB Program, the government has an 

important objective: to redress the 

effects of past discrimination against 

women in contracting and to ensure that 

the effects of that discrimination do not 

serve to limit WOSBs’ opportunities to 

participate in Federal contracting 

opportunities. (See City of Richmond v. 

Croson Co., 488 U.S. at 492, ‘‘It is 

beyond dispute that any public entity, 

state or federal, has a compelling 

interest in assuring that public dollars, 

drawn from the tax contributions of all 

citizens, do not serve to finance the evil 

of private prejudice.’’) 

This objective—to overcome the 

effects of past sex discrimination and to 

ensure that the effects of such 

discrimination are not extended into its 

own procurement activity—is 

sufficiently ‘‘important’’ to sustain the 

WOSB Program. See Califano v. 

Webster, 430 U.S. 313, 318 (1977). More 

specifically, the Court has repeatedly 

upheld as an important government 

objective the reduction of disparities in 

condition or treatment between men 

and women caused by the long history 

of discrimination against women. See 

Califano, 430 U.S. at 317; Miss. Univ. for 

Women v. Hogan, 458 U.S. 718, 728 

(1982); Schlesinger v. Ballard, 419 U.S. 

498 (1975); Kahn v. Shevin, 416 U.S. 

351 (1974). 

Moreover, the benefits provided 

through the WOSB program are not a 

result of ‘‘archaic and overbroad 

generalizations’’ about women, 

Schlesinger, 219 U.S. at 508, or of ‘‘the 

role-typing society has long imposed’’ 

upon women, Stanton v. Stanton, 421 

U.S. 7, 15 (1975). Instead, they are a 

targeted means to redress the 

discrimination to which women have 

long been subjected and which has 

prevented them from competing equally 

for Federal contracts. 

The means chosen by Congress to 

implement the WOSB Program ensure 

that the Program is substantially related 

to its goals. Congress expressly limited 

application of the WOSB Program only 

to industries in which women are 

substantially underrepresented or 

underrepresented in contracting. The 

RAND Report, as is more fully 

explained above, is a detailed analysis 

of WOSBs which identifies the disparity 

ratio of WOSBs in Federal prime 

contracting by 4-digit NAICS code. 

This Proposed Rule is limited to the 

eligible industries identified in the 

RAND study, and SBA in the future may 

conduct new studies or update existing 

studies as appropriate. 

In addition, SBA agrees with 

commenters that an agency-by-agency 

determination is not required for the 

WOSB Program to be substantially 

related to an important government 

objective or to be properly 

implemented. The Supreme Court has 

rejected the contention that government 

may adopt a race-conscious contracting 

program only ‘‘to eradicate the effects of 

its own prior discrimination,’’ and this 

conclusion also applies to genderconscious contracting programs. Croson, 

488 U.S. at 486. Accordingly, this 

Proposed Rule seeks to strike from the 

Final Rule at § 127.501 the requirement 

for an agency-by-agency determination 

of discrimination. 

X. Contract File 

This Proposed Rule requires 

contracting officers to document the 

contract file with results of market 

research and the fact that the NAICS 

code assigned to the contract is for an 

industry that SBA has designated as a 

substantially underrepresented industry 

with respect to WOSBs. SBA is 

considering adding the following 

additional language to § 127.503(e): 

In addition, the contracting officer must 

document the contract file showing that the 

apparent successful offeror’s ORCA 

certifications and associated representations 

were reviewed. 

SBA is requesting comments on this 

proposal. 

XI. Joint Venture Requirements 

SBA has also proposed amendments 

to the current joint venture regulation, 

permitting EDWOSB or WOSB joint 

ventures for EDWOSB or WOSB 

contracts. The rule currently provides 

that the EDWOSB or WOSB must 

perform a significant portion of the 

contract. SBA has proposed clarifying 

this requirement by requiring that not 

less than 51 percent of the net profits 

earned by the joint venture must be 

distributed to the EDWOSB or WOSB. 

SBA also proposes clarifying that the 

joint venture agreement must be in 

writing and set forth the following 

provisions: the purpose of the joint 

venture, that an EDWOSB or WOSB 

must be the managing venturer, that an 

employee of the managing venturer 

must be the project manager responsible 

for the performance of the contract, and 

the responsibilities of the parties with 

regard to contract performance, sources 

of labor, and negotiation of the 

EDWOSB or WOSB contract. 

XII. Request for Comments 

SBA seeks comments on all aspects of 

this Proposed Rule. This includes 

comments relating to the eligible 

industries, and especially the use of the 

CCR data set and SBA’s concerns with 

the use of the SBO data set. This also 

includes comments relating to the 

certification procedures, including the 

certification requirements, 

representations in ORCA, and 

submission of documents to the 

document repository. 

Compliance With Executive Orders 

12866, 12988, 13132, the Paperwork 

Reduction Act (44 U.S.C., Chapter 35) 

and the Regulatory Flexibility Act (5 

U.S.C. 601–612) 

Executive Order 12866 

OMB has determined that this rule is 

a ‘‘significant’’ regulatory action under 

Executive Order 12866. The Regulatory 

Impact Analysis is set forth below. 

Regulatory Impact Analysis 

1. Necessity of Regulation 

This regulatory action implements 

section 8(m) of the Act, which was 

enacted as part of section 811 of the 

Small Business Reauthorization Act of 

2000, Public Law 106–554. Section 8(m) 

authorizes the creation of the 

contracting assistance mechanism 

described in this regulation. Under this 

regulation, contracting officers will be 


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allowed to restrict competition to 

EDWOSBs in industries in which SBA 

has determined that WOSBs are 

underrepresented or substantially 

underrepresented and to WOSBs in 

industries in which SBA has 

determined that WOSBs are 

substantially underrepresented and 

waived the economically disadvantaged 

requirement. This Proposed Rule will 

establish the requirements and 

procedures necessary to administer 

these restricted competitions. 

2. Alternative Approaches to Proposed 

Rule 

In developing this Proposed Rule, 

SBA considered the costs and benefits 

of alternatives for certification of small 

business concerns that claim EDWOSB 

or WOSB status, particularly the 

alternatives provided by section 8(m) of 

the Act. Specifically, section 8(m)(2)(F) 

provides that in order to qualify as a 

WOSB or EDWOSB, a concern must 

either be certified by a Federal agency, 

a State government, or a national 

certifying entity approved by the 

Administrator, or, alternatively, must 

certify to the contracting officer that it 

is a small business concern owned and 

controlled by women and provide 

supporting documents. In light of this 

provision, SBA considered performing 

the certifications by requiring each 

concern to submit a formal application 

to SBA for a determination of its status. 

That approach, however, is not required 

or intended by the statute or legislative 

history. 

In addition, SBA considered utilizing 

third-party certifiers. For the reasons set 

forth in the preamble, SBA has decided 

to propose the use of such third-party 

certifiers. SBA believes that the 

proposed process would be the most 

beneficial and cost-effective approach 

for the small business concerns because 

they will not have to submit formal 

applications to SBA to become eligible 

for restricted competition for WOSB and 

EDWOSB procurements. 

In this Proposed Rule, SBA has 

proposed the use of an ORCA 

certification and document submission 

process, which is similar to the one that 

is used in other existing SBA set-aside 

programs. For example, SBA’s program 

for small businesses permits those 

concerns to self-represent their size 

when submitting offers on Federal 

contracts. The set-aside program for 

small businesses has worked well for 

decades. SBA believes that the 

certification process proposed in this 

rule is credible because it supported by 

robust protest procedures as well as 

eligibility examinations. In addition, the 

business concern must provide 

documents verifying its eligibility. 

SBA did consider another option with 

respect to the submission of documents 

to the contracting officer. As discussed 

in the preamble above, the Act states 

that a WOSB or EDWOSB can certify to 

the contracting officer that it is such an 

entity and must provide supporting 

documents to the contracting officer 

verifying its eligibility. This Proposed 

Rule requires the WOSB or EDWOSB to 

submit certain documents to the 

contracting officer via an electronic 

repository at the time of initial 

certification in ORCA and then every 

year after that. In addition, WOSBs and 

EDWOSBs must also provide updated 

documents anytime there is a change 

that necessitates supplementing the 

original document submission. In the 

alternative, if the repository is not 

available, the WOSB or EDWOSB must 

submit those documents directly to the 

contracting officer prior to the award of 

a WOSB or EDWOSB contract. SBA did 

consider having the EDWOSB or WOSB 

provide all necessary documents to the 

contracting officer at the time of award 

in order to verify eligibility of the 

awardee (e.g., tax returns, resumes). 

However, SBA believes this may be a 

burden on both the small business and 

contracting community and therefore 

did not propose this alternative. SBA is 

still exploring the feasibility of all of 

these approaches and has requested 

comments from the public on all of 

them and any other the public may 

have. 

SBA also considered alternative data 

sets and measures of disparity. SBA 

proposes to use the CCR database and 

both numbers and dollars approaches 

for the reasons set forth in the preamble 

but solicits comments on this approach. 

3. What Are the Potential Benefits and 

Costs of This Regulatory Action? 

This rule directs benefits to 

EDWOSBs and WOSBs at a cost to 

concerns ineligible for the program. In 

addition, this rule may result in new 

administrative costs of managing a 

Federal contracting assistance program. 

However, SBA believes that these costs 

are significantly outweighed by the 

benefits to be gained by reducing the 

inefficiencies caused by discriminatory 

barriers that currently impede WOSBs’ 

full participation in the Federal 

contracting market. 

Any concern about an increase in 

product or service cost is balanced by 

the requirement in the statute and 

Proposed Rule that any contract award 

under the WOSB Program be made at a 

fair and reasonable price. Further, there 

will not be any additional cost 

associated with the length of the 

procurement since the process will not 

be any longer, and could in some 

instances be shorter, than would be the 

case in the absence of the WOSB 

program. Finally, the creation and 

development of WOSBs could well, over 

time, result in enhanced bidding for 

Federal contracts, ultimately resulting 

in lower costs of contracts for the 

Federal government. 

This rule aims to aid EDWOSBs and 

WOSBs by enabling contracting officers 

to restrict competition to EDWOSBs in 

industries in which SBA has 

determined that WOSBs are 

underrepresented and substantially 

underrepresented and to WOSBs in 

industries in which SBA has 

determined that WOSBs are 

substantially underrepresented where 

certain threshold determinations are 

made by an agency. It is difficult to 

estimate the total number of potential 

beneficiaries that will be eligible for 

Federal small business assistance as a 

result of this Proposed Rule. Utilizing 

the RAND FPDS/NG data set for the 

total number of WOSBs (identified by 

Dun and Bradstreet DUNS number) that 

received obligated funds from awards, 

contracts, orders and modifications to 

existing contracts for FY 2005, 

approximately 12,000 WOSBs were 

identified as recipients of Federal 

contracts in the 83 NAICS codes that 

would be eligible under the WOSB 

Program. It is expected that the number 

of awards to EDWOSBs and WOSBs will 

increase within these NAICS codes 

should an agency restrict competition to 

those groups in accordance with the 

procedures in this Proposed Rule. 

To the extent that additional firms 

become active in government programs, 

additional administrative costs to the 

Federal government may arise due to 

additional bidders for Federal small 

business procurement programs, 

additional firms seeking SBA 

guaranteed lending programs, and 

additional firms eligible for enrollment 

in SBA’s Dynamic Small Business 

Search data base. Among businesses in 

this group seeking SBA assistance, there 

will be some additional costs associated 

with compliance and verification 

associated with certification of small 

business status and protests of small 

business status. However, these 

activities are likely to generate minimal 

incremental costs since mechanisms are 

currently in place to handle these 

administrative requirements. 

In addition, as more EDWOSBs and 

WOSBs enter into the Federal arena, 

competition will likely increase, 

lowering the cost of the program and 

ultimately, we hope, eliminating 


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underrepresentation within the 

industries covered by this Proposed 

Rule and the industry’s participation in 

the program. In the long run, small 

business opportunities—and the amount 

of competition in the Federal 

procurement market as a whole—will be 

enhanced by the experience WOSBs 

gain in Federal contracting through 

participation in this Program. While 

WOSBs gain this experience, moreover, 

this Rule ensures that any contract 

award to them will be based on a fair 

and reasonable price to the government. 

Indeed, the current barriers that inhibit 

WOSBs’ ability to compete equally for 

contracts and subcontracts impose upon 

the government increased costs due to 

lessened competition; these costs are 

likely to be reduced as more WOSBs 

become economically successful and 

competition for contracts and 

subcontracts therefore increases. 

This regulatory action promotes the 

government’s objectives. One of SBA’s 

goals is to help individual small 

businesses succeed through fair and 

equitable access to capital and credit, 

government contracts, and management 

and technical assistance. 

Implementation of this Proposed Rule 

ensures that the intended beneficiaries 

have access to small business programs 

designed to assist them. This Proposed 

Rule does not interfere with State, local, 

and tribal governments in the exercise 

of their government functions. In a few 

instances, in fact, State and local 

governments have voluntarily adopted 

SBA’s regulations for their programs; 

those state and local governments that 

do so here will save resources that 

otherwise would be consumed by the 

need to establish their own 

administrative standards and processes. 

This regulatory action will also enable 

the Federal government to avoid 

extending the effects of discrimination 

against women through the 

government’s own contracting 

processes. As explained in Section I, 

Background, of the preamble, the 

Federal government has an obligation to 

ensure that it is not implementing 

contracting procedures that permit the 

effects of sex discrimination to continue 

to impede the ability of WOSBs to 

participate in Federal contracting. As 

stated in Croson, these remedial 

programs not only help businesses 

overcome the effects of discrimination, 

but ensure that the public’s tax dollars 

are not spent in a discriminatory 

manner. This program, by creating a 

sheltered market for a very small 

percentage of Federal contracts, thus 

advances the Federal government’s 

commitment to ensuring equal 

opportunity in its contracting processes. 

Executive Order 12988 

This action meets applicable 

standards set forth in Sections 3(a) and 

3(b)(2) of Executive Order 12988, Civil 

Justice Reform, to minimize litigation, 

eliminate ambiguity, and reduce 

burden. This action does not have 

retroactive or preemptive effect. 

Executive Order 13132 

This rule does not have federalism 

implications as defined in the Executive 

Order. It will not have substantial direct 

effects on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government, as 

specified in Executive Order 13132. 

Paperwork Reduction Act (PRA) 

For purposes of the Paperwork 

Reduction Act, 44 U.S.C. Chapter 35, 

SBA has determined that this Proposed 

Rule imposes new reporting and 

recordkeeping requirements. The 

certification process described in 

Subpart C, §§ 127.300 to 127.302, is an 

information collection. The proposed 

self-certification process requires a 

concern seeking to benefit from Federal 

contracting opportunities designated for 

WOSBs or EDWOSBs to verify its status 

by using the existing electronic 

contracting system (i.e., ORCA). The 

WOSB or EDWOSB will have to 

represent in ORCA that it meets each 

eligibility requirement of the program. 

In addition, the WOSB or EDWOSB will 

be required to submit certain documents 

verifying eligibility at the time of 

certification in ORCA (and every year 

after). SBA proposes that these 

documents be submitted to a document 

repository, or until the repository is 

established, the contracting office upon 

notice of a proposed award. Further, the 

protest and eligibility examination 

procedures will require the submission 

of documents from those parties subject 

to a protest and eligibility examination. 

To reduce the burden on the WOSBs or 

EDWOSBs, the same documents 

submitted at the time of certification 

will be used for the protests and 

eligibility examinations, except that for 

protests and eligibility examinations, 

SBA will also request copies of 

proposals submitted in response to a 

WOSB or EDWOSB solicitation and 

certain other documents and 

information to verify the status of an 

EDWOSB. 

Finally this proposed rule also 

requires the WOSBs or EDWOSBs to 

retain copies of the documents 

submitted for a period of six (6) years. 

SBA believes, however, that any 

additional burden imposed by this 

recordkeeping requirement would be de 

minimus since the firms would 

maintain the information in their 

general course of business. 

SBA has submitted this information 

collection to OMB for review. 

Title and Description of Information 

Collection: Women-Owned Small 

Business Federal Contract Assistance 

Program Purpose: The information 

collected is modeled on two currently 

approved information collections: SBA 

Form 1010, OMB Control 3245–0331, 

SBA’s Application for 8(a) Business 

Development, and SBA Form 413, OMB 

Control 3245–0188, SBA’s Application 

for Personal Financial Statement, which 

are used to collect personal and 

business information on the businesses 

and owners applying to this program. 

The information requested for this 

program includes information verifying 

the WOSB/EDWOSB status of the 

business concern, including tax returns, 

personal statements, and business 

documents. 

OMB Control Number: New 

collection. 

Description of and Estimated Number 

of Respondents: This information will 

be collected from the small business 

concerns that are not already certified 

by an approved third party certifier and 

therefore must self-certify and verify 

their status by submitting certain 

required documents to a document 

repository at the time of ORCA 

certification. This same information 

must also be collected by the third party 

certifier when making its certification 

determination. As noted above, utilizing 

the RAND FPDS data set for the total 

number of WOSBs (identified by Dun 

and Bradstreet DUNS number) that 

received obligated funds from awards, 

contracts, orders and modifications to 

existing contracts for FY 2005, 

approximately 12,000 WOSBs were 

identified as recipients of Federal 

contracts in the 83 NAICS codes that 

would be eligible under the WOSB 

Program. Estimated Number of 

Responses: In FY 2005, there were 

12,000 WOSBs that were identified as 

recipients of Federal contracts in the 83 

NAICS codes that would be eligible 

under the WOSB Program. Thus, SBA 

estimates that there will be 12,000 

responses. In addition, SBA intends to 

conduct eligibility examinations and 

protests and appeals. The total 

estimated number of responses is 

12,200. 

Estimated Response Time: 2 hours. 

Total Estimated Annual Hour Burden: 

24,400 hours. 

Please send comments by the closing 

date for comment for this Proposed Rule 


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to SBA Desk Officer, Office of 

Management and Budget, Office of 

Information and Regulatory Affairs, 725 

17th Street, NW., Washington, DC 20503 

and to Dean Koppel, Assistant Director, 

Office of Government Contracting, U.S. 

Small Business Administration, 409 

Third Street, SW., Washington, DC 

20416. 

Regulatory Flexibility Act 

SBA has determined that this 

Proposed Rule establishing a set-aside 

mechanism for WOSBs may have a 

significant economic impact on a 

substantial number of small entities 

within the meaning of the Regulatory 

Flexibility Act (RFA), 5 U.S.C. 601, et 

seq. Accordingly, SBA has prepared an 

Initial Regulatory Flexibility Analysis 

(IRFA) addressing the impact of this 

Rule in accordance with section 603, 

title 5, of the United States Code. The 

IRFA examines the objectives and legal 

basis for this Proposed Rule; the kind 

and number of small entities that may 

be affected; the projected recordkeeping, 

reporting, and other requirements; 

whether there are any Federal rules that 

may duplicate, overlap, or conflict with 

this Proposed Rule; and whether there 

are any significant alternatives to this 

Proposed Rule. 

1. What Are the Reasons for, and 

Objectives of, This Proposed Rule? 

SBA is establishing procedures 

whereby Federal procuring agencies 

may use restricted competition in 

industries where WOSBs are 

substantially underrepresented, or, in 

some cases, underrepresented in Federal 

procurement and when certain other 

conditions are met. The purpose of this 

Proposed Rule is to create an initial 

framework and infrastructure for 

implementing these new procedures, 

thereby providing a tool for Federal 

agencies to ensure that WOSBs have an 

equal opportunity to participate in 

Federal contracting. The objectives of 

this Proposed Rule are to overcome the 

effects of sex discrimination on 

women’s opportunities to participate 

equally in Federal contracting, to ensure 

a level playing field on which womenowned small businesses have a fair 

opportunity to compete for Federal 

contracts, and to ensure that the WOSB 

Program is substantially related to the 

Congressional goals in accordance with 

applicable law. 

2. What Is the Legal Basis for This 

Proposed Rule? 

SBA is proposing this regulation 

pursuant to section 8(m) of the Small 

Business Act, 15 U.S.C. 637(m), which 

authorizes the creation and 

implementation of a new mechanism for 

Federal contracting with WOSBs. 

3. What Is SBA’s Description and 

Estimate of the Number of Small 

Entities to Which the Rule Will Apply? 

The RFA directs agencies to provide 

a description, and where feasible, an 

estimate of the number of small 

business concerns that may be affected 

by the rule. This Proposed Rule will 

ultimately establish in the FAR a new 

procurement mechanism to benefit 

WOSBs. Therefore, WOSBs that 

compete for Federal contracts are the 

specific group of small business 

concerns most directly affected by this 

rule. The rule may also affect other 

small businesses to the extent that small 

businesses not owned and controlled by 

women may be excluded from 

competing for certain Federal 

contracting opportunities. 

SBA searched CCR’s DSBS and 

determined that there were 

approximately 76,000 WOSBs listed. 

However, it is not likely that all of these 

firms will be affected by this rule 

because not all of these firms likely do 

business in one of the 83 four-digit 

NAICS codes identified as 

underrepresented or substantially 

underrepresented by the Proposed Rule. 

SBA attempted to approximate the 

number of WOSBs in the 83 industries, 

but there is no simple method of 

determining how many firms actually 

participated in these NAICS codes. SBA 

did review the DSBS to determine that, 

as of June 30, 2009, there were 

approximately 230,005 WOSBs 

identified in the 83 industries that will 

be eligible for contract assistance under 

the WOSB Program. However, this 

approach counted a WOSB multiple 

times if it listed itself in more than one 

NAICS code, and therefore likely 

overstates the number of WOSBs that 

will be affected by this rule. Therefore, 

the best estimate of the maximum 

number of currently registered WOSBs 

that could be affected by this rule is 

approximately 76,000. However, there 

may be more WOSBs affected if 

additional firms list themselves in DSBS 

or if SBA approves additional industries 

for set-aside procurements under these 

procedures. However, the number could 

be less because many otherwisequalified EDWOSBs and WOSBs will 

not find it advantageous to participate 

in the WOSB Program, since the 

industries in which they do business are 

not one of the 83 eligible industries. 

This Proposed Rule would affect 

small businesses other than WOSBs that 

are excluded from competition for 

Federal contracts that are included in 

the Program. Non-WOSBs in the 83 

designated industries may be excluded 

from opportunities from which they 

would have otherwise benefited. 

However, the Federal government 

purchases billions of dollars of goods 

and services every year, and SBA 

believes that there are sufficient 

acquisitions available for all small 

businesses. Therefore, the number of 

small businesses that could be excluded 

under the proposed determination of 

eligible industries or future such 

determinations is not known at this 

time. 

Additional contracting opportunities 

identified by Federal agencies as 

candidates for the WOSB program will 

come from new contracting 

requirements and contracts currently 

performed by small and large 

businesses. At this time, SBA cannot 

accurately predict how the existing 

distribution of contracts by business 

type may change by this rule. 

4. What Are the Projected Reporting, 

Recordkeeping, Paperwork Reduction 

Act and Other Compliance 

Requirements? 

WOSBs are not required to be 

certified as such in order to contract 

with the Federal Government; this will 

still be true if this Proposed Rule is 

adopted. For a WOSB to be eligible for 

Federal contracts restricted to WOSBs or 

EDWOSBs, however, it will have to selfcertify its status as a WOSB in ORCA 

and CCR. Any WOSB or EDWOSB that 

is the apparent successful offeror will 

have to provide certain documents to 

the contracting officer, prior to award, to 

verify its eligibility. This procedure is 

required by statute. This requirement 

ensures that participation in certain 

contracting opportunities is restricted to 

qualified WOSBs according to the terms 

of section 8(m) of the Act and the 

criteria in this Proposed Rule. In 

addition, concerns would have to 

submit information to SBA in the 

context of a protest or examination. In 

the case of a protest or examination, 

SBA might request that a particular 

WOSB submit documentation to 

substantiate its claim. WOSBs or 

EDWOSBs are required to retain 

documentation demonstrating 

satisfaction of the eligibility 

requirements for six (6) years from date 

of self-certification in ORCA. SBA 

proposes to require the documents be 

kept for six (6) years from the date of a 

self-certification because the 

government can bring an action under 

31 U.S.C. 3730 for false claims six (6) 

years from the date the false claim is 

made. 31 U.S.C. 3731. 

The proposed document retention 

will require WOSBs and EDWOSBs to 


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have a filing system to retain the 

documents; however, SBA believes this 

information is already retained by a 

WOSB or EDWOSB in the ordinary 

course of business. Therefore this 

Proposed Rule will not likely impose 

any additional burden on WOSBs and 

EDWOSBs. To the extent that WOSBs 

and EDWOSBs typically retain this 

information for less than six (6) years, 

the concern may have to increase the 

capacity of its filing and document 

tracking system. 

In addition, any documents submitted 

to a contracting officer as part of an offer 

are considered source selection 

sensitive under FAR and cannot be 

released prior to award of a contract. 48 

CFR 3.104–3. After award of a contract, 

all information and/or documents 

submitted to a Federal agency, 

including SBA, are protected to the 

fullest extent permitted by law, 

including the Privacy Act and Freedom 

of Information Act, 5 U.S.C. 552. 

The Paperwork Reduction Act 

requirements are addressed further 

below. SBA would welcome any 

comments on the process as described. 

5. What Relevant Federal Rules May 

Duplicate, Overlap, or Conflict With 

This Rule? 

SBA has not identified any relevant 

Federal rules currently in effect that 

duplicate or conflict with this rule. The 

restricted-competition feature of the 

WOSB program will be an addition to 

the existing contracting programs that 

agencies currently administer, such as 

small business set-asides, HUBZone setasides, service-disabled veteran-owned 

small business set-asides, and contracts 

reserved for the 8(a) Business 

Development Program. For any 

particular contract, a contracting officer 

may have a range of set-aside options 

from which to select. Because any 

contract awarded to a WOSB will also 

count towards an agency’s small 

business goal, these procedures may 

lead a contracting officer to select this 

program in lieu of another. 

Therefore, although there may be 

some overlap, the addition of the setaside mechanism for women-owned 

small business should complement 

rather than conflict with the goals of 

existing set-aside programs. 

6. What Significant Alternatives Did 

SBA Consider That Accomplish the 

Stated Objectives and Minimize Any 

Significant Economic Impact on Small 

Entities? 

The RFA requires agencies to identify 

alternatives to the rule in an effort to 

minimize any significant economic 

impact of the rule on small entities. SBA 

has determined that this rule may have 

a significant economic impact on a 

substantial number of small entities. 

This rule will implement the set-aside 

mechanism for WOSBs, as established 

by section 8(m) of the Act. All of the 

provisions of this rule reflect 

requirements under that statute. 

The legislation does provide SBA 

with alternative approaches, however, 

for the certification of WOSBs. 

Specifically, a WOSB may be certified 

by a Federal agency, a State government, 

or a national certifying entity approved 

by the Administrator. SBA has reviewed 

some sources and believes that such 

certification is different depending on 

the location and size of the business and 

that the range for such a certification is 

approximately $200–$1000 for the 

initial certification and every year 

thereafter for recertification. In some 

cases, the costs may be higher. Thus, the 

WOSB may, in the alternative, selfcertify in ORCA and provide adequate 

documentation to the contracting officer 

(via an electronic repository or directly 

to the contracting officer if the 

repository is unavailable) that it is a 

WOSB in accordance with standards 

established by the Administration, with 

minimal costs (to include document 

retention). SBA did consider limiting 

certification to either third party 

certification or self-certification with the 

provision of documents, but SBA 

believes that this Proposed Rule 

provides the most flexibility to WOSBs 

and EDWOSBs in participating in the 

program. SBA estimates that 

implementation of this regulation will 

require no additional proposal costs for 

WOSBs, as compared to submitting 

proposals under any other small 

business set-aside program. Moreover, 

WOSBs currently represent their status 

for purposes of data collection that is 

needed to implement 15 U.S.C. 644(g). 

In addition, although WOSBs or 

EDWOSBs must make available 

documentation to the contracting officer 

at the time of certification in ORCA, the 

documents provided are kept in the 

normal course of business and therefore 

should not require additional proposal 

costs. 

List of Subjects 

13 CFR Part 121 

Government procurement, 

Government property, Grant programs— 

business, Individuals with disabilities, 

Loan programs—business, Small 

businesses. 

13 CFR Part 127 

Government procurement, Reporting 

and recordkeeping requirements, Small 

businesses. 

13 CFR Part 134 

Administrative practice and 

procedure, Claims, Equal access to 

justice, Lawyers, Organization and 

functions (Government agencies). 

Accordingly, for the reasons stated in 

the preamble, SBA withdraws the 

Proposed Rule published on October 1, 

2008 at 73 FR 57014, and proposes to 

amend 13 CFR parts 121, 127 and 134 

as follows: 

PART 121—SMALL BUSINESS SIZE 

REGULATIONS 

1. The authority citation for 13 CFR 

part 121 continues to read as follows: 

Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 

637, 644, and 662(5); and Pub. L. 105–135, 

sec. 401 et seq., 111 Stat. 2592. 

2. Revise § 121.401 to read as follows: 

§ 121.401 What procurement programs are 

subject to size determinations? 

The rules set forth in §§ 121.401 

through 121.413 apply to all Federal 

procurement programs for which status 

as a small business is required or 

advantageous, including the small 

business set-aside program, SBA’s 

Certificate of Competency program, 

SBA’s 8(a) Business Development 

program, SBA’s HUBZone program, the 

Women Owned Small Business (WOSB) 

Federal Contract Assistance Program, 

SBA’s Service-Disabled Veteran-Owned 

Small Business program, the Small 

Business Subcontracting program, and 

the Federal Small Disadvantaged 

Business (SDB) program. 

3. Amend § 121.1001 by revising 

paragraph (a)(9) to read as follows: 

§ 121.1001 Who may initiate a size protest 

or request a formal size determination? 

(a) * * * 

(9) For SBA’s WOSB Federal 

Contracting Assistance Program, the 

following entities may protest: 

(i) Any concern that submits an offer 

for a specific requirement set aside for 

WOSBs or WOSBs owned by one or 

more women who are economically 

disadvantaged (EDWOSB) pursuant to 

part 127 of this chapter; 

(ii) The contracting officer; 

(iii) The SBA Government Contracting 

Area Director; and 

(iv) The Director for Government 

Contracting, or designee. 

* * * * * 

4. Amend § 121.1008(a) by adding a 

sentence after the third sentence to read 

as follows: 


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§ 121.1008 What occurs after SBA receives 

a size protest or request for a formal size 

determination? 

(a) * * * If the protest pertains to a 

requirement set aside for WOSBs or 

EDWOSBs, the Area Director will also 

notify SBA’s Director for Government 

Contracting of the protest. * * * 

5. Revise part 127 to read as follows: 

PART 127—WOMEN-OWNED SMALL 

BUSINESS FEDERAL CONTRACT 

PROGRAM 

Subpart A—General Provisions 

Sec. 

127.100 What is the purpose of this part? 

127.101 What type of assistance is available 

under this part? 

127.102 What are the definitions of the 

terms used in this part? 

Subpart B—Eligibility Requirements To 

Qualify as an EDWOSB or WOSB 

127.200 What are the requirements a 

concern must meet to qualify as an 

EDWOSB or WOSB? 

127.201 What are the requirements for 

ownership of an EDWOSB and WOSB? 

127.202 What are the requirements for 

control of an EDWOSB or WOSB? 

127.203 What are the rules governing the 

requirement that economically 

disadvantaged women must own 

EDWOSBs? 

Subpart C—Certification of EDWOSB or 

WOSB Status 

127.300 How is a concern certified as an 

EDWOSB or WOSB? 

127.301 When may a contracting officer 

accept a concern’s self-certification? 

127.302 What third-party certifications may 

a concern use as evidence of its status as 

a qualified EDWOSB or WOSB? 

127.303 How will SBA select and identify 

approved certifiers? 

127.304 How does a concern obtain 

certification from an approved certifier? 

127.305 May a concern determined not to 

qualify as an EDWOSB or WOSB submit 

a self-certification for a particular 

EDWOSB or WOSB requirement? 

Subpart D—Eligibility Examinations 

127.400 What is an eligibility examination? 

127.401 What is the difference between an 

eligibility examination and an EDWOSB 

or WOSB status protest pursuant to 

subpart F of this part? 

127.402 How will SBA conduct an 

examination? 

127.403 What happens if SBA verifies the 

concern’s eligibility? 

127.404 What happens if SBA is unable to 

verify a concern’s eligibility? 

127.405 What is the process for requesting 

an eligibility examination? 

Subpart E—Federal Contract Assistance 

127.500 In what industries is a contracting 

officer authorized to restrict competition 

under this part? 

127.501 How will SBA determine the 

industries that are eligible for EDWOSB 

or WOSB requirements? 

127.502 How will SBA identify and provide 

notice of the designated industries? 

127.503 When is a contracting officer 

authorized to restrict competition under 

this part? 

127.504 What additional requirements must 

a concern satisfy to submit an offer on 

an EDWOSB or WOSB requirement? 

127.505 May a non-manufacturer submit an 

offer on an EDWOSB or WOSB 

requirement for supplies? 

127.506 May a joint venture submit an offer 

on an EDWOSB or WOSB requirement? 

Subpart F—Protests 

127.600 Who may protest the status of a 

concern as an EDWOSB or WOSB? 

127.601 May a protest challenging the size 

and status of a concern as an EDWOSB 

or WOSB be filed together? 

127.602 What are the grounds for filing an 

EDWOSB or WOSB status protest? 

127.603 What are the requirements for 

filing an EDWOSB or WOSB protest? 

127.604 How will SBA process an EDWOSB 

or WOSB status protest? 

127.605 What are the procedures for 

appealing an EDWOSB or WOSB status 

protest decision? 

Subpart G—Penalties 

127.700 What penalties may be imposed 

under this part? 

Authority: 15 U.S.C. 632, 634(b)(6), 

637(m), and 644. 

Subpart A—General Provisions 

§ 127.100 What is the purpose of this part? 

Section 8(m) of the Small Business 

Act authorizes certain procurement 

mechanisms to ensure that womenowned small businesses (WOSBs) have 

an equal opportunity to participate in 

Federal contracting, and to ensure that 

the WOSB Program is substantially 

related to Congressional goals in 

accordance with applicable law. 

§ 127.101 What type of assistance is 

available under this part? 

This part authorizes contracting 

officers to restrict competition to 

eligible Economically Disadvantaged 

Women-Owned Small Businesses 

(EDWOSBs) for certain Federal contracts 

in industries in which the Small 

Business Administration (SBA) 

determines that Women-Owned Small 

Businesses (WOSBs) are 

underrepresented or substantially 

underrepresented in Federal 

procurement and to eligible WOSBs for 

certain Federal contracts in industries in 

which SBA determines that WOSBs are 

substantially underrepresented in 

Federal procurement and has waived 

the economically disadvantaged 

requirement. 

§ 127.102 What are the definitions of the 

terms used in this part? 

For purposes of this part: 

8(a) Business Development (8(a) BD) 

concern means a concern that SBA has 

certified as an 8(a) BD program 

participant. 

AA/GC&BD means SBA’s Associate 

Administrator for Government 

Contracting and Business Development. 

Central Contractor Registration (CCR) 

means the system that functions as the 

central registration and repository of 

contractor data for the Federal 

government and is a means for 

conducting searches of small business 

contractors. In general, prospective 

Federal contractors must be registered 

in CCR prior to award of a contract or 

purchase agreement, unless the award 

results from a solicitation issued on or 

before May 31, 1998. 

Citizen means a person born or 

naturalized in the United States. 

Resident aliens and holders of 

permanent visas are not considered to 

be citizens. 

Concern means a firm that satisfies 

the requirements in § 121.105 of this 

chapter. 

Contracting officer has the meaning 

given to that term in Section 27(f)(5) of 

the Office of Federal Procurement 

Policy Act (codified at 41 U.S.C. 

423(f)(5)). 

D/GC means SBA’s Director for 

Government Contracting. 

Economically disadvantaged WOSB 

(EDWOSB) means a concern that is 

small pursuant to part 121 of this 

chapter and that is at least 51 percent 

owned and controlled by one or more 

women who are U.S. citizens and who 

are economically disadvantaged in 

accordance with §§ 127.200, 127.201, 

127.202 and 127.203. An EDWOSB 

automatically qualifies as a WOSB. 

EDWOSB requirement means a 

Federal requirement for services or 

supplies for which a contracting officer 

has restricted competition to EDWOSBs. 

Immediate family member means 

father, mother, husband, wife, son, 

daughter, stepchild, brother, sister, 

grandfather, grandmother, grandson, 

granddaughter, father-in-law, mother-inlaw, son-in-law, and daughter-in-law. 

Interested party means any concern 

that submits an offer for a specific 

EDWOSB or WOSB requirement, the 

contracting activity’s contracting officer, 

or SBA. 

ORCA means the Online 

Representations and Certifications 

Application at https://orca.bpn.gov, a 

required registration for contractors 

interested in submitting an offer, bid or 

quote on most Federal contracts. 

Primary industry classification means 

the six-digit North American Industry 

Classification System (NAICS) code 

designation that best describes the 


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primary business activity of the 

concern. The NAICS code designations 

are described in the NAICS manual 

available via the Internet at http:// 

www.census.gov/NAICS. In determining 

the primary industry in which a concern 

is engaged, SBA will consider the 

factors set forth in § 121.107 of this 

chapter. 

Same or similar line of business 

means business activities within the 

same four-digit ‘‘Industry Group’’ of the 

NAICS Manual as the primary industry 

classification of the applicant or 

Participant. 

Substantial underrepresentation 

means a disparity ratio which is less 

than 0.5. 

Underrepresentation means a 

disparity ratio between 0.5 and 0.8. 

WOSB means a concern that is small 

pursuant to part 121 of this chapter, and 

that is at least 51 percent owned and 

controlled by one or more women in 

accordance with §§ 127.200, 127.201 

and 127.202. 

WOSB Program Repository means a 

secure, web-based application that 

collects, stores and disseminates 

documents to the contracting 

community and SBA, which verify the 

eligibility of a business concern for a 

contract to be awarded under a WOSB 

or EDWOSB requirement. 

WOSB requirement means a Federal 

requirement for services or supplies for 

which a contracting officer has 

restricted competition to eligible 

WOSBs. 

Subpart B—Eligibility Requirements To 

Qualify as an EDWOSB or WOSB 

§ 127.200 What are the requirements a 

concern must meet to qualify as an 

EDWOSB or WOSB? 

(a) Qualification as an EDWOSB. To 

qualify as an EDWOSB, a concern must 

be: 

(1) A small business as defined in part 

121 of this chapter; and 

(2) Not less than 51 percent 

unconditionally and directly owned and 

controlled by one or more women who 

are United States citizens and are 

economically disadvantaged. 

(b) Qualification as a WOSB. To 

qualify as a WOSB, a concern must be: 

(1) A small business as defined in part 

121 of this chapter; and 

(2) Not less than 51 percent 

unconditionally and directly owned and 

controlled by one or more women who 

are United States citizens. 

§ 127.201 What are the requirements for 

ownership of an EDWOSB and WOSB? 

(a) General. To qualify as an EDWOSB 

or WOSB, one or more women must 

unconditionally and directly own at 

least 51 percent of the concern. 

Ownership will be determined without 

regard to community property laws. 

(b) Requirement for unconditional 

ownership. To be considered 

unconditional, the ownership must not 

be subject to any conditions, executory 

agreements, voting trusts, or other 

arrangements that cause or potentially 

cause ownership benefits to go to 

another. The pledge or encumbrance of 

stock or other ownership interest as 

collateral, including seller-financed 

transactions, does not affect the 

unconditional nature of ownership if 

the terms follow normal commercial 

practices and the owner retains control 

absent violations of the terms. 

(c) Requirement for direct ownership. 

To be considered direct, the qualifying 

women must own 51 percent of the 

concern directly. The 51 percent 

ownership may not be through another 

business entity or a trust (including 

employee stock ownership plan) that is, 

in turn, owned and controlled by one or 

more women or economically 

disadvantaged women. However, 

ownership by a trust, such as a living 

trust, may be treated as the functional 

equivalent of ownership by a woman or 

economically disadvantaged woman 

where the trust is revocable, and the 

woman is the grantor, a trustee, and the 

sole current beneficiary of the trust. 

(d) Ownership of a partnership. In the 

case of a concern that is a partnership, 

at least 51 percent of each class of 

partnership interest must be 

unconditionally owned by one or more 

women. The ownership must be 

reflected in the concern’s partnership 

agreement. For purposes of this 

requirement, general and limited 

partnership interests are considered 

different classes of partnership interest. 

(e) Ownership of a limited liability 

company. In the case of a concern that 

is a limited liability company, at least 

51 percent of each class of member 

interest must be unconditionally owned 

by one or more women. 

(f) Ownership of a corporation. In the 

case of a concern that is a corporation, 

at least 51 percent of each class of 

voting stock outstanding and 51 percent 

of the aggregate of all stock outstanding 

must be unconditionally owned by one 

or more women. In determining 

unconditional ownership of the 

concern, any unexercised stock options 

or similar agreements held by a woman 

will be disregarded. However, any 

unexercised stock option or other 

agreement, including the right to 

convert non-voting stock or debentures 

into voting stock, held by any other 

individual or entity will be treated as 

having been exercised. 

§ 127.202 What are the requirements for 

control of an EDWOSB or WOSB? 

(a) General. To qualify as a WOSB, the 

management and daily business 

operations of the concern must be 

controlled by one or more women. To 

qualify as an EDWOSB, the management 

and daily business operations of the 

concern must be controlled by one or 

more women who are economically 

disadvantaged. Control by one or more 

women means that both the long-term 

decision making and the day-to-day 

management and administration of the 

business operations must be conducted 

by one or more women. 

(b) Managerial position and 

experience. A woman must hold the 

highest officer position in the concern 

and must have managerial experience of 

the extent and complexity needed to run 

the concern. The woman manager need 

not have the technical expertise or 

possess the required license to be found 

to control the concern if she can 

demonstrate that she has ultimate 

managerial and supervisory control over 

those who possess the required licenses 

or technical expertise. However, if a 

man possesses the required license and 

has an equity interest in the concern, he 

may be found to control the concern. 

(c) Limitation on outside employment. 

The woman who holds the highest 

officer position of the concern must 

manage it on a full-time basis and 

devote full-time to the business concern 

during the normal working hours of 

business concerns in the same or similar 

line of business. The woman who holds 

the highest officer position may not 

engage in outside employment that 

prevents her from devoting sufficient 

time and attention to the daily affairs of 

the concern to control its management 

and daily business operations. 

(d) Control over a partnership. In the 

case of a partnership, one or more 

women must serve as general partners, 

with control over all partnership 

decisions. 

(e) Control over a limited liability 

company. In the case of a limited 

liability company, one or more women 

must serve as management members, 

with control over all decisions of the 

limited liability company. 

(f) Control over a corporation. One or 

more women must control the Board of 

Directors of the concern. Women are 

considered to control the Board of 

Directors when either: 

(1) One or more women own at least 

51 percent of all voting stock of the 

concern, are on the Board of Directors 

and have the percentage of voting stock 

necessary to overcome any super 

majority voting requirements; or 


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(2) Women comprise the majority of 

voting directors through actual numbers 

or, where permitted by state law, 

through weighted voting. 

(g) Involvement in the concern by 

other individuals or entities. Men or 

other entities may be involved in the 

management of the concern and may be 

stockholders, partners or limited 

liability members of the concern. 

However, no males or other entity may 

exercise actual control or have the 

power to control the concern. 

§ 127.203 What are the rules governing the 

requirement that economically 

disadvantaged women must own 

EDWOSBs? 

(a) General. To qualify as an 

EDWOSB, the concern must be at least 

51 percent owned by one or more 

women who are economically 

disadvantaged. A woman is 

economically disadvantaged if she can 

demonstrate that her ability to compete 

in the free enterprise system has been 

impaired due to diminished capital and 

credit opportunities as compared to 

others in the same or similar line of 

business. SBA may consider a spouse’s 

financial situation in determining a 

woman’s access to credit and capital. 

SBA does not take into consideration 

community property laws when 

determining economic disadvantage 

when the woman has no ownership 

interest in the property. 

(b) Limitation on personal net worth. 

(1) In order to be considered 

economically disadvantaged, the 

woman’s personal net worth must be 

less than $750,000, excluding her 

ownership interest in the concern and 

her equity interest in her primary 

personal residence. 

(2) Income received from an S 

corporation will be excluded from net 

worth where the EDWOSB provides 

documentary evidence demonstrating 

that the income was reinvested in the 

business concern or the distribution was 

solely for the purposes of paying taxes 

arising in the normal course of 

operations of the business concern. 

(3) Funds invested in an Individual 

Retirement Account (IRA) or other 

official retirement account that are 

unavailable until retirement age without 

a significant penalty will not be 

considered in determining a woman’s 

net worth. In order to properly assess 

whether funds invested in a retirement 

account may be excluded from a 

woman’s net worth, she must provide 

information about the terms and 

restrictions of the account to SBA. 

(c) Factors that may be considered. 

(1) General. The personal financial 

condition of the woman claiming 

economic disadvantage, including her 

personal income for the past two years 

(including bonuses, and the value of 

company stock given in lieu of cash), 

her personal net worth and the fair 

market value of all of her assets, 

whether encumbered or not, may be 

considered in determining whether she 

is economically disadvantaged. 

(2) Income. 

(i) When considering a woman’s 

personal income, if the adjusted gross 

yearly income averaged over the two 

years preceding the certification exceeds 

$200,000, SBA will presume that she is 

not economically disadvantaged. The 

presumption may be rebutted by a 

showing that this income level was 

unusual and not likely to occur in the 

future, that losses commensurate with 

and directly related to the earnings were 

suffered, or by evidence that the income 

is not indicative of lack of economic 

disadvantage. 

(ii) Income earned by S corporations, 

which is reinvested in or the 

distribution was solely for the purposes 

of paying taxes arising in the normal 

course of operations of the business 

concern, is exempted from income for 

purposes of this section provided that 

documentary evidence is submitted 

demonstrating this use. Likewise, S 

corporation losses may not be 

subtracted from a woman’s income to 

reduce that income. 

(3) Fair market value of all assets. A 

woman will generally not be considered 

economically disadvantaged if the fair 

market value of all her assets (including 

her primary residence and the value of 

the business concern) exceeds $3 

million. The only assets excluded from 

this determination are funds excluded 

under paragraph (b)(3) of this section as 

being invested in a qualified IRA 

account or other official retirement 

account. 

(d) Transfers within two years. Assets 

that a woman claiming economic 

disadvantage transferred within two 

years of the date of the concern’s 

certification will be attributed to the 

woman claiming economic disadvantage 

if the assets were transferred to an 

immediate family member, or to a trust 

that has as a beneficiary an immediate 

family member. The transferred assets 

within the two-year period will not be 

attributed to the woman if the transfer 

was: 

(1) To or on behalf of an immediate 

family member for that individual’s 

education, medical expenses, or some 

other form of essential support; or 

(2) To an immediate family member 

in recognition of a special occasion, 

such as a birthday, graduation, 

anniversary, or retirement. 

Subpart C—Certification of EDWOSB 

or WOSB Status 

§ 127.300 How is a concern certified as an 

EDWOSB or WOSB? 

(a) General. At the time a concern 

submits an offer on a specific contract 

reserved for competition under this Part, 

it must be registered in the Central 

Contractor Registration (CCR) and have 

a current self-certification posted on the 

Online Representations and 

Certifications Application (ORCA) that 

it qualifies as an EDWOSB or WOSB. 

(b) Form of certification. In 

conjunction with its required 

registration in the CCR database, the 

concern must submit a self-certification 

to the electronic annual representations 

and certifications at http://orca.bpn.gov, 

that it is a qualified EDWOSB or WOSB. 

The self-certification must include a 

representation, subject to penalties for 

misrepresentation, that: 

(1) The concern is certified as an 

EDWOSB or WOSB by a certifying 

entity approved by SBA and there have 

been no changes in its circumstances 

affecting its eligibility since 

certification; 

(2) The concern meets each of the 

applicable individual eligibility 

requirements described in subpart B of 

this part, including that: 

(i) It is a small business concern 

under the size standard assigned to the 

particular procurement; 

(ii) It is at least 51 percent owned and 

controlled by one or more women who 

are United States citizens, or it is at least 

51 percent owned and controlled by one 

or more women who are United States 

citizens and are economically 

disadvantaged; and 

(iii) Neither SBA, in connection with 

an examination or protest, nor an SBAapproved certifier has issued a decision 

currently in effect finding that it does 

not qualify as an EDWOSB or WOSB. 

(c) Documents provided to contracting 

officer. All of the documents set forth in 

paragraphs (d) and (e) of this section 

must be provided to the contracting 

officer to verify eligibility at the time of 

initial offer. The documents will be 

provided via the WOSB Program 

Repository or, if the repository is 

unavailable, directly to the contracting 

officer. The documents must be retained 

for a minimum of six (6) years. 

(d) Third Party Certification. 

(1) General. At the time of 

certification in ORCA, the WOSB or 

EDWOSB that has been certified as a 

WOSB or EDWOSB by a certifying 

entity approved by SBA must provide a 

copy of the certification to the WOSB 

Program Repository. If the repository is 

unavailable, then prior to the award of 


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a WOSB or EDWOSB contract, the 

apparent successful offeror WOSB or 

EDWOSB that has been certified as a 

EDWOSB or WOSB by a certifying 

entity approved by SBA must provide a 

copy of the certification to the 

contracting officer verifying that it was 

a WOSB or EDWOSB at the time of 

initial offer. In addition, the EDWOSB 

or WOSB must also provide a copy of 

the joint venture agreement, if 

applicable. Within thirty (30) days of 

the repository becoming available, the 

WOSB or EDWOSB must provide the 

same documents to the repository. 

(2) U.S. Department of Transportation 

(DOT) Certification. At the time of 

certification in ORCA, the WOSB or 

EDWOSB that has been certified as a as 

a DOT Disadvantaged Business 

Enterprise must submit a copy of the 

DBE certification showing that it 

received such certification because it is 

owned and controlled by one or more 

women to the WOSB Program 

Repository. If the repository is 

unavailable, then prior to award of a 

WOSB or EDWOSB contract, the 

apparent successful offeror must 

provide a copy of the DOT 

Disadvantaged Business Enterprise 

certification to the contracting officer 

showing that it received such 

certification because it is owned and 

controlled by one or more women, 

verifying that it was a WOSB or 

EDWOSB at the time of initial offer. In 

addition, the WOSB or EDWOSB must 

provide a statement identifying the 

woman or women upon whom 

eligibility was based and documents, 

such as birth certificates or passports, 

evidencing that the women are citizens 

of the United States, as defined in 

§ 127.102. Within thirty (30) days of the 

repository becoming available, the 

WOSB or EDWOSB must provide the 

same documents to the repository. 

(e) Non-Third Party Certification. A 

concern that has not been certified as a 

WOSB or EDWOSB by a third-party 

certifier approved by SBA must provide 

documents to the WOSB Program 

Repository. If the repository is 

unavailable, then prior to award of a 

WOSB or EDWOSB contract, the 

apparent successful offeror must 

provide a copy of the documents to the 

contracting officer verifying that it was 

a WOSB or EDWOSB at the time of 

initial offer. Within thirty (30) days of 

the repository becoming available, the 

WOSB or EDWOSB must provide the 

same documents to the repository. 

These documents must include the 

following: 

(1) Birth certificates, Naturalization 

papers, or passports for owners who are 

women; 

(2) Copy of the joint venture 

agreement, if applicable; 

(3) For limited liability companies: 

(i) Articles of organization (also 

referred to as certificate of organization 

or articles of formation) and any 

amendments; and 

(ii) Operating agreement, and any 

amendments; 

(4) For corporations: 

(i) Articles of incorporation and any 

amendments; 

(ii) By-laws and any amendments; 

(iii) All issued stock certificates, 

including the front and back copies, 

signed in accord with the by-laws; 

(iv) Stock ledger; and 

(v) Voting agreements, if any; 

(5) For partnerships, the partnership 

agreement and any amendments; 

(6) For sole proprietorships, the 

assumed/fictitious name certificate(s); 

and 

(7) For EDWOSBs, in addition to the 

above, the SBA Form 413, Personal 

Financial Statement, available to the 

public at http://www.sba.gov/tools/ 

Forms/index.html, for each woman 

claiming economic disadvantage. 

(f) Update of certification and 

documents. 

(1) The concern must update its 

EDWOSB and WOSB representations 

and self-certification on ORCA as 

necessary, but at least annually, to 

ensure they are kept current, accurate, 

and complete. The representations and 

self-certification are effective for a 

period of one year from the date of 

submission or update to ORCA. 

(2) The WOSB or EDWOSB must 

update the documents submitted to the 

contracting officer via the WOSB 

Program Repository as necessary to 

ensure they are kept current, accurate 

and complete. If the repository is not 

available, the WOSB or EDWOSB must 

provide current, accurate and complete 

documents to the contracting officer for 

each contract award. Within thirty (30) 

days of the repository becoming 

available, the WOSB or EDWOSB must 

provide the same documents to the 

repository. 

§ 127.301 When may a contracting officer 

accept a concern’s self-certification? 

(a) General. 

(1) Third Party Certifications. A 

contracting officer may accept a 

concern’s self-certification on ORCA as 

accurate for a specific procurement 

reserved for award under this Part if the 

apparent successful offeror WOSB or 

EDWOSB provided the required 

documents, which are set forth in 

§ 127.300(d), and there has been no 

protest or other credible information 

that calls into question the concern’s 

eligibility as a EDWOSB or WOSB. An 

example of such credible evidence 

includes information that the concern 

was determined by SBA or an SBAapproved certifier not to qualify as an 

EDWOSB or WOSB. 

(2) Non-Third Party Certification. A 

contracting officer may accept a 

concern’s self-certification in ORCA if 

the apparent successful offeror WOSB or 

EDWOSB has provided the required 

documents, which are set forth in 

§ 127.300(e). If the apparent successful 

offeror WOSB or EDWOSB fails to 

submit any of the required documents, 

the contracting officer cannot award a 

WOSB or EDWOSB contract to that 

business concern. 

(b) Referral to SBA. When the 

contracting officer has information that 

calls into question the eligibility of a 

concern as an EDWOSB or WOSB or the 

concern fails to provide all of the 

required documents to verify its 

eligibility, the contracting officer shall 

refer the concern’s self-certification to 

SBA for verification of the concern’s 

eligibility by filing an EDWOSB or 

WOSB status protest pursuant to 

subpart F of this part. 

§ 127.302 What third-party certifications 

may a concern use as evidence of its status 

as a qualified EDWOSB or WOSB? 

In order for a concern to use a 

certification by another entity as 

evidence of its status as a qualified 

EDWOSB or WOSB in support of its 

representations in ORCA pursuant to 

§ 127.300(b), the concern must have a 

current, valid certification from: 

(a) SBA as an 8(a) BD Program 

participant due to their status as a 

women-owned concern; or 

(b) An entity designated as an SBAapproved certifier on SBA’s Web site 

located at http://www.sba.gov/GC. 

§ 127.303 How will SBA select and identify 

approved certifiers? 

(a) General. SBA may enter into 

written agreements to accept the 

EDWOSB or WOSB certification of a 

Federal agency, State government, or 

national certifying entity if SBA 

determines that the entity’s certification 

process complies with SBA-approved 

certification standards and tracks the 

EDWOSB or WOSB eligibility 

requirements set forth in subpart B of 

this part. The written agreement will 

include a provision authorizing SBA to 

terminate the agreement if SBA 

subsequently determines that the 

entity’s certification process does not 

comply with SBA-approved certification 

standards or is not based on the same 

EDWOSB or WOSB eligibility 

requirements as set forth in subpart B of 

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(b) Required certification standards. 

In order for SBA to enter into an 

agreement to accept the EDWOSB or 

WOSB certification of a Federal agency, 

State government, or national certifying 

entity, the entity must establish the 

following: 

(1) It will render fair and impartial 

EDWOSB or WOSB eligibility 

determinations. 

(2) It will retain the documents 

submitted by the approved WOSB or 

EDWOSB for a period of six (6) years 

from the date of certification (initial and 

any recertification). 

(3) Its certification process will 

require applicant concerns to preregister on CCR and submit sufficient 

information as determined by SBA to 

enable it to determine whether the 

concern qualifies as an EDWOSB or 

WOSB. This information must include 

documentation demonstrating whether 

the concern is: 

(i) A small business concern under 

SBA’s size standards for its primary 

industry classification; 

(ii) At least 51 percent owned and 

controlled by one or more women who 

are United States citizens; and 

(iii) In the case of a concern applying 

for EDWOSB certification, at least 51 

percent owned and controlled by one or 

more women who are United States 

citizens and economically 

disadvantaged. 

(4) It will not decline to accept a 

concern’s application for EDWOSB or 

WOSB certification on the basis of race, 

color, national origin, religion, age, 

disability, sexual orientation, or marital 

or family status. 

(c) List of SBA-approved certifiers. 

SBA will maintain a list of approved 

certifiers on SBA’s Internet Web site at 

http://www.sba.gov/GC. Any interested 

person may also obtain a copy of the list 

from the local SBA district office. 

§ 127.304 How does a concern obtain 

certification from an approved certifier? 

A concern that seeks EDWOSB or 

WOSB certification from an SBAapproved certifier must submit its 

application directly to the approved 

certifier in accordance with the specific 

application procedures of the particular 

certifier. Any interested party may 

obtain such certification information 

and application by contacting the 

approved certifier at the address 

provided on SBA’s list of approved 

certifiers. 

§ 127.305 May a concern determined not to 

qualify as an EDWOSB or WOSB submit a 

self-certification for a particular EDWOSB 

or WOSB requirement? 

A concern that SBA or an SBAapproved certifier determines does not 

qualify as an EDWOSB or WOSB may 

not represent itself to be an EDWOSB or 

WOSB, as applicable, unless SBA 

subsequently determines that it is an 

eligible EDWOSB or WOSB pursuant to 

the examination procedures under 

§ 127.405, and there have been no 

material changes in its circumstances 

affecting its eligibility since SBA’s 

eligibility determination. Any concern 

determined not to be a qualified 

EDWOSB or WOSB may request that 

SBA conduct an examination to 

determine its EDWOSB or WOSB 

eligibility at any time once it believes in 

good faith that it satisfies all of the 

eligibility requirements to qualify as an 

EDWOSB or WOSB. 

Subpart D—Eligibility Examinations 

§ 127.400 What is an eligibility 

examination? 

Eligibility examinations are 

investigations that verify the accuracy of 

any certification made or information 

provided as part of the certification 

process or in connection with an 

EDWOSB or WOSB contract. In 

addition, eligibility examinations may 

verify that a concern meets the 

EDWOSB or WOSB eligibility 

requirements at the time of the 

examination. SBA will, in its sole 

discretion, perform eligibility 

examinations at any time after a concern 

self-certifies in CCR or ORCA that it is 

an EDWOSB or WOSB. SBA may 

conduct the examination, or parts of the 

examination, at one or all of the 

concern’s offices. SBA may consider 

protest allegations set forth in a protest 

in determining whether to conduct an 

examination of a concern pursuant to 

this subpart D of this part, 

notwithstanding a dismissal or denial of 

a protest pursuant to § 127.604. SBA 

may also consider information provided 

to the D/GC by a third party that 

questions the eligibility of a WOSB or 

EDWOSB that has certified its status in 

ORCA or CCR in determining whether 

to conduct an eligibility examination. 

§ 127.401 What is the difference between 

an eligibility examination and an EDWOSB 

or WOSB status protest pursuant to subpart 

F of this part? 

(a) Eligibility examination. An 

eligibility examination is the formal 

process through which SBA verifies and 

monitors the accuracy of any 

certification made or information 

provided as part of the certification 

process or in connection with an 

EDWOSB or WOSB contract. If SBA is 

conducting an eligibility examination 

on a concern that has submitted an offer 

on a pending EDWOSB or WOSB 

procurement and SBA has credible 

information that the concern may not 

qualify as an EDWOSB or WOSB, then 

SBA may initiate a protest pursuant to 

§ 127.600 to suspend award of the 

contract for fifteen (15) business days 

pending SBA’s determination of the 

concern’s eligibility. 

(b) EDWOSB or WOSB protests. An 

EDWOSB or WOSB status protest 

provides a mechanism for challenging 

or verifying the EDWOSB or WOSB 

eligibility of a concern in connection 

with a specific EDWOSB or WOSB 

requirement. SBA will process 

EDWOSB or WOSB protests in 

accordance with the procedures and 

timeframe set forth in subpart F, and 

will determine the EDWOSB or WOSB 

eligibility of the protested concern as of 

the date the concern represented its 

EDWOSB or WOSB status as part of its 

initial offer including price. SBA’s 

protest determination will apply to the 

specific procurement to which the 

protest relates and to future 

procurements. 

§ 127.402 How will SBA conduct an 

examination? 

(a) Notification. No less than five (5) 

business days before commencing an 

examination, SBA will notify the 

concern in writing that it will conduct 

an examination to verify the status of 

the concern as an EDWOSB or WOSB. 

However, SBA reserves the right to 

conduct a site visit without prior 

notification to the concern. 

(b) Request for information. SBA will 

request that the concern or contracting 

officer provide documentation and 

information related to the concern’s 

EDWOSB or WOSB eligibility. These 

documents will include those submitted 

under § 127.300(c) and any other 

pertinent documents requested by SBA 

at the time of eligibility examination to 

verify eligibility, including but not 

limited to, documents submitted by a 

concern in connection with any WOSB 

or EDWOSB certification. SBA may also 

request copies of proposals or bids 

submitted in response to an EDWOSB or 

WOSB solicitation. In addition, 

EDWOSBs will be required to submit a 

copy of a SBA Form 413, Personal 

Financial Statement, the two most 

recent personal income tax returns 

(including all schedules and W–2 forms) 

for the women claiming economic 

disadvantage and their spouses, unless 

the individuals and their spouses are 

legally separated, and SBA Form 4506– 

T, Request for Tax Transcript Form, 

available to the public at http:// 

www.sba.gov/tools/Forms/index.html. 

SBA may draw an adverse inference 

where a concern fails to cooperate in 

providing the requested information. 


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The WOSB or EDWOSB must retain 

documentation demonstrating 

satisfaction of the eligibility 

requirements for six (6) years from date 

of self-certification. 

§ 127.403 What happens if SBA verifies the 

concern’s eligibility? 

If SBA verifies that the concern 

satisfies the applicable EDWOSB or 

WOSB eligibility requirements, then the 

D/GC will send the concern a written 

decision to that effect and will allow the 

concern’s EDWOSB or WOSB 

designation in CCR and ORCA to stand 

and the concern may continue to selfcertify its EDWOSB or WOSB status. 

§ 127.404 What happens if SBA is unable 

to verify a concern’s eligibility? 

(a) Notice of proposed determination 

of ineligibility. If SBA is unable to verify 

that the concern qualifies as an 

EDWOSB or WOSB, then the D/GC will 

send the concern a written notice 

explaining the reasons SBA believes the 

concern did not qualify at the time of 

certification or does not qualify as an 

EDWOSB or WOSB. The notice will 

advise the concern that it has fifteen 

(15) calendar days from the date it 

receives the notice to respond. 

(b) SBA determination. Following the 

fifteen (15) day response period, the D/ 

GC or designee will consider the reasons 

of proposed ineligibility and any 

information the concern submitted in 

response, and will send the concern a 

written decision with its findings. The 

D/GC’s decision is effective immediately 

and remains in full force and effect 

unless a new examination verifies the 

concern is an eligible EDWOSB or 

WOSB or the concern is certified by a 

third party certifier. 

(1) If SBA determines that the concern 

does not qualify as an EDWOSB or 

WOSB, then the D/GC will send the 

concern a written decision explaining 

the basis of ineligibility, and will 

require that the concern remove its 

EDWOSB or WOSB designation in the 

CCR and ORCA within five (5) calendar 

days after the date of the decision. 

(2) If the concern has already certified 

itself as a WOSB or EDWOSB on a 

pending procurement the concern must 

immediately inform the officials 

responsible for the procurement of the 

adverse determination. 

(3) If SBA determines that the concern 

did not qualify as an EDWOSB or WOSB 

at the time it submitted its initial offer 

for an EDWOSB or WOSB contract, the 

contracting officer may terminate the 

contract, not exercise any option, or not 

award further task or delivery orders. 

(4) Whether or not a contracting 

officer decides to allow or not allow an 

ineligible concern to fully perform a 

contract under paragraph (b)(2) of this 

section, the contracting officer cannot 

count the award as one to an EDWOSB 

or WOSB and must update the Federal 

Procurement Data System—Next 

Generation (FPDS–NG) and other 

databases from the date of award 

accordingly. 

(c) A concern that has been found to 

be ineligible may not represent itself as 

a WOSB or EDWOSB until it cures the 

reason for its ineligibility and SBA 

determines that the concern qualifies as 

a WOSB or EDWOSB. A concern that 

believes in good faith that it has cured 

the reason(s) for its ineligibility may 

request an examination under the 

procedures set forth in this section. 

§ 127.405 What is the process for 

requesting an eligibility examination? 

(a) General. A concern may request 

that SBA conduct an examination to 

verify its eligibility as an EDWOSB or 

WOSB at any time after it is determined 

by SBA not to qualify as an EDWOSB 

or WOSB, if the concern believes in 

good faith that it satisfies all of the 

EDWOSB or WOSB eligibility 

requirements under subpart B of this 

part. 

(b) Format. The request for an 

examination must be in writing and 

must specify the particular reasons the 

concern was determined not to qualify 

as an EDWOSB or WOSB. 

(c) Submission of request. The 

concern must submit its request directly 

to the Director for Government 

Contracting, U.S. Small Business 

Administration, 409 Third Street, SW., 

Washington, DC 20416, or by fax to 

(202) 205–6390, marked ‘‘Attn: Request 

for Women-Owned Small Business 

Program Examination.’’ 

(d) Notice of receipt of request. SBA 

will immediately notify the concern in 

writing once SBA receives its request for 

an examination. SBA will request that 

the concern provide documentation and 

information related to the concern’s 

EDWOSB or WOSB eligibility and may 

draw an adverse inference if the concern 

fails to cooperate in providing the 

requested information. 

(e) Determination of eligibility. The D/ 

GC will send the concern a written 

decision finding that it either qualifies 

or does not qualify as an EDWOSB or 

WOSB. 

(1) If the D/GC determines that the 

concern does not qualify as an EDWOSB 

or WOSB, the decision will explain the 

specific reasons for the adverse 

determination and advise the concern 

that it is prohibited from self-certifying 

as an EDWOSB or WOSB. If the concern 

self-certifies as an EDWOSB or WOSB 

notwithstanding SBA’s adverse 

determination, the concern will be 

subject to the penalties under subpart G 

of this part. 

(2) If the D/GC determines that the 

concern qualifies as an EDWOSB or 

WOSB, then the D/GC will send the 

concern a written decision to that effect 

and will advise the concern that it may 

self-certify as an EDWOSB or WOSB, as 

applicable. 

(f) Effect of decision. The D/GC’s 

decision is effective immediately and 

remains in full force and effect unless a 

new examination verifies the concern is 

an eligible EDWOSB or WOSB or the 

concern is certified by a third party 

certifier. If the concern has already 

certified itself as a WOSB or EDWOSB 

on a pending procurement the concern 

must immediately inform the officials 

responsible for the procurement of the 

adverse determination. 

(g) A concern that has been found to 

be ineligible may not represent itself as 

a WOSB or EDWOSB until it cures the 

reason for its ineligibility and SBA 

determines that the concern qualifies as 

a WOSB or EDWOSB. A concern that 

believes in good faith that it has cured 

the reason(s) for its ineligibility may 

request an examination under the 

procedures set forth in this section. 

Subpart E—Federal Contract 

Assistance 

§ 127.500 In what industries is a 

contracting officer authorized to restrict 

competition under this part? 

A contracting officer may restrict 

competition under this part only in 

those industries in which SBA has 

determined that WOSBs are 

underrepresented or substantially 

underrepresented in Federal 

procurement, as specified in § 127.501. 

§ 127.501 How will SBA determine the 

industries that are eligible for EDWOSB or 

WOSB requirements? 

(a) Based upon its analysis, SBA will 

designate by NAICS Industry Subsector 

Code those industries in which WOSBs 

are underrepresented and substantially 

underrepresented. 

(b) In determining the extent of 

disparity of WOSBs, SBA may request 

that the head of any Federal department 

or agency provide SBA, data or 

information necessary to analyze the 

extent of disparity of WOSBs. 

§ 127.502 How will SBA identify and 

provide notice of the designated 

industries? 

SBA will post on its Internet Web site 

a list of NAICS Industry Subsector 

industries it designates under § 127.501. 

The list of designated industries also 


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may be obtained from the local SBA 

district office and may be posted on the 

General Services Administration 

Internet Web site. 

§ 127.503 When is a contracting officer 

authorized to restrict competition under this 

part? 

(a) EDWOSB requirements. For 

requirements in industries designated 

by SBA pursuant to § 127.501, a 

contracting officer may restrict 

competition to EDWOSBs if the 

contracting officer has a reasonable 

expectation based on market research 

that: 

(1) Two or more EDWOSBs will 

submit offers for the contract; 

(2) The anticipated award price of the 

contract (including options) does not 

exceed $5,000,000, in the case of a 

contract assigned an NAICS code for 

manufacturing; or $3,000,000, in the 

case of all other contracts; and 

(3) Contract award may be made at a 

fair and reasonable price. 

(b) WOSB requirements. Only if the 

contracting officer determines that the 

market research indicates that the 

criteria in paragraph (a) of this section 

are not met for restricting competition to 

EDWOSBs may the contracting officer 

then restrict competition to WOSBs. In 

addition, to restrict competition to 

WOSBs, the contractor must determine 

that the following criteria are met: 

(1) The requirement is in an industry 

that SBA has designated as substantially 

underrepresented with respect to 

WOSBs; and 

(2) The contracting officer has a 

reasonable expectation based on market 

research that— 

(i) Two or more WOSBs will submit 

offers; 

(ii) The anticipated award price of the 

contract (including options) will not 

exceed $5,000,000, in the case of a 

contract assigned an NAICS code for 

manufacturing, or $3,000,000 in the case 

of all other contracts; and 

(iii) Contract award may be made at 

a fair and reasonable price. 

(c) 8(a) BD requirements. A 

contracting officer may not restrict 

competition to eligible EDWOSBs or 

WOSBs if an 8(a) BD Participant is 

currently performing the requirement 

under the 8(a) BD Program or SBA has 

accepted the requirement for 

performance under the authority of the 

8(a) BD program, unless SBA consented 

to release the requirement from the 8(a) 

BD program. 

(d) Contracting Among Small 

Business Programs. 

(1) Acquisitions Valued At or Below 

$100,000/Simplified Acquisition 

Threshold. The contracting officer shall 

set aside any acquisition with an 

anticipated dollar value exceeding 

$3,000 ($15,000 for acquisitions as 

described in the Federal Acquisition 

Regulation (FAR) at 48 CFR 

13.201(g)(1)) but valued below $100,000 

($250,000 for acquisitions described in 

paragraph (1) of the Simplified 

Acquisition Threshold definition in the 

FAR at 48 CFR 2.101) for small business 

concerns when there is a reasonable 

expectation that offers will be obtained 

from at least two small business 

concerns that are competitive in terms 

of quality and delivery and award will 

be made at fair market prices. This 

requirement does not preclude a 

contracting officer from awarding a 

contract under the 8(a) BD, HUBZone, 

Service Disabled Veteran Owned 

(SDVO), or WOSB programs. 

(2) Acquisitions Valued Above 

$100,000/Simplified Acquisition 

Threshold. The contracting officer shall 

set aside any acquisition with an 

anticipated dollar value exceeding 

$100,000 ($250,000 for acquisitions 

described in paragraph (1) of the 

Simplified Acquisition Threshold 

definition in the FAR at 48 CFR 2.101) 

for small business concerns when there 

is a reasonable expectation that offers 

will be obtained from at least two small 

business concerns that are competitive 

in terms of quality and delivery and 

award will be made at fair market 

prices. However, after conducting 

market research, the contracting officer 

shall first consider a set-aside or sole 

source award under the 8(a) BD, 

HUBZone, SDVO SBC or WOSB 

programs before setting aside the 

requirement as a small business setaside. There is no order of precedence 

among the 8(a) BD, HUBZone, SDVO 

SBC or WOSB programs. SBA believes 

that progress in fulfilling the various 

small business goals, as well as other 

factors such as the results of market 

research, programmatic needs specific 

to the procuring agency, anticipated 

award price, and the acquisition history, 

should be considered in making a 

decision as to which program to use for 

the acquisition. 

(e) Contract file. When restricting 

competition to WOSBs or EDWOSBs in 

accordance with § 127.503, the 

contracting officer must document the 

contract file accordingly, including the 

type and extent of market research and 

the fact that the NAICS code assigned to 

the contract is for an industry that SBA 

has designated as a as underrepresented 

or, with respect to WOSBs, substantially 

underrepresented, industry. 

§ 127.504 What additional requirements 

must a concern satisfy to submit an offer 

on an EDWOSB or WOSB requirement? 

In order for a concern to submit an 

offer on a specific EDWOSB or WOSB 

requirement, the concern must ensure 

that the appropriate representations and 

certifications on ORCA are accurate and 

complete at the time it submits its offer 

to the contracting officer, including, but 

not limited to, the fact that: 

(a) It is small under the size standard 

corresponding to the NAICS code 

assigned to the contract; 

(b) It is listed on CCR and ORCA as 

an EDWOSB or WOSB; 

(c) There has been no material change 

in any of its circumstances affecting its 

EDWOSB or WOSB eligibility; and 

(d) It will meet the applicable 

percentages of work requirement as set 

forth in § 125.6 of this chapter 

(limitations on subcontracting rule). 

§ 127.505 May a non-manufacturer submit 

an offer on an EDWOSB or WOSB 

requirement for supplies? 

An EDWOSB or WOSB that is a nonmanufacturer, as defined in § 121.406(b) 

of this chapter, may submit an offer on 

an EDWOSB or WOSB contract for 

supplies, if it meets the requirements 

under the non-manufacturer rule set 

forth in § 121.406(b) of this chapter. 

§ 127.506 May a joint venture submit an 

offer on an EDWOSB or WOSB 

requirement? 

A joint venture may submit an offer 

on an EDWOSB or WOSB contract if the 

joint venture meets all of the following 

requirements: 

(a) Except as provided in 

§ 121.103(h)(3) of this chapter, the 

combined annual receipts or employees 

of the concerns entering into the joint 

venture must meet the applicable size 

standard corresponding to the NAICS 

code assigned to the contract; 

(b) The EDWOSB or WOSB 

participant of the joint venture must be 

designated on the CCR and the ORCA as 

an EDWOSB or WOSB; 

(c) The parties to the joint venture 

must enter into a written joint venture 

agreement. The joint venture agreement 

must contain a provision: 

(1) Setting forth the purpose of the 

joint venture. 

(2) Designating an EDWOSB or WOSB 

as the managing venturer of the joint 

venture, and an employee of the 

managing venturer as the project 

manager responsible for the 

performance of the contract; 

(3) Stating that not less than 51 

percent of the net profits earned by the 

joint venture will be distributed to the 

EDWOSB or WOSB; 


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(4) Specifying the responsibilities of 

the parties with regard to contract 

performance, sources of labor, and 

negotiation of the EDWOSB or WOSB 

contract; and 

(5) Requiring the final original records 

be retained by the managing venturer 

upon completion of the EDWOSB or 

WOSB contract performed by the joint 

venture. 

(d) The joint venture must perform 

the applicable percentage of work 

required of the EDWOSB or WOSB 

offerors in accordance with § 125.6 of 

this chapter (limitations on 

subcontracting rule); 

(e) The procuring activity will execute 

the contract in the name of the 

EDWOSB or WOSB or joint venture. 

Subpart F—Protests 

§ 127.600 Who may protest the status of a 

concern as an EDWOSB or WOSB? 

An interested party may protest the 

EDWOSB or WOSB status of an 

apparent successful offeror on an 

EDWOSB or WOSB contract. Any other 

party or individual may submit 

information to the contracting officer or 

SBA in an effort to persuade them to 

initiate a protest or to persuade SBA to 

conduct an examination pursuant to 

subpart D of this part. 

§ 127.601 May a protest challenging the 

size and status of a concern as an EDWOSB 

or WOSB be filed together? 

An interested party seeking to protest 

both the size and the EDWOSB or 

WOSB status of an apparent successful 

offeror on an EDWOSB or WOSB 

requirement must file two separate 

protests, one size protest pursuant to 

part 121 of this chapter and one 

EDWOSB or WOSB status protest 

pursuant to this subpart. An interested 

party seeking to protest only the size of 

an apparent successful EDWOSB or 

WOSB offeror must file a size protest to 

the contracting officer pursuant to part 

121 of this chapter. 

§ 127.602 What are the grounds for filing 

an EDWOSB or WOSB status protest? 

SBA will consider a protest 

challenging the status of a concern as an 

EDWOSB or WOSB if the protest 

presents credible evidence that the 

concern is not owned and controlled by 

one or more women who are United 

States citizens and, if the protest is in 

connection with an EDWOSB contract, 

that the concern is not at least 51 

percent owned and controlled by one or 

more women who are economically 

disadvantaged. In addition, SBA will 

consider a protest challenging the status 

of a concern as an EDWOSB or WOSB 

if the contracting officer has protested 

because the WOSB or EDWOSB 

apparent successful offeror has failed to 

provide all of the required documents, 

as set forth in § 127.300(c). 

§ 127.603 What are the requirements for 

filing an EDWOSB or WOSB protest? 

(a) Format. Protests must be in writing 

and must specify all the grounds upon 

which the protest is based. A protest 

merely asserting that the protested 

concern is not an eligible EDWOSB or 

WOSB, without setting forth specific 

facts or allegations, is insufficient. 

(b) Filing. Protestors may deliver their 

written protests in person, by facsimile, 

by express delivery service, e-mail, or 

by U.S. mail (received by the applicable 

date) to the following: 

(1) To the contracting officer, if the 

protestor is an offeror for the specific 

contract; or 

(2) To the D/GC, if the protest is 

initiated by the contracting officer or 

SBA. 

(c) Timeliness. 

(1) For negotiated acquisitions, a 

protest from an interested party must be 

received by the contracting officer prior 

to the close of business on the fifth 

business day after notification by the 

contracting officer of the apparent 

successful offeror or notification of 

award. 

(2) For sealed bid acquisitions, a 

protest from an interested party must be 

received by close of business on the fifth 

business day after bid opening. 

(3) Any protest received after the time 

limit is untimely, unless it is from SBA 

or the contracting officer. A contracting 

officer or SBA may file an EDWOSB or 

WOSB protest at any time after bid 

opening or notification of intended 

awardee, whichever applies. 

(4) Any protest received prior to bid 

opening or notification of intended 

awardee, whichever applies, is 

premature. 

(5) A timely filed protest applies to 

the procurement in question even if 

filed after award. 

(d) Referral to SBA. The contracting 

officer must forward to SBA any protest 

received, notwithstanding whether he or 

she believes it is premature, sufficiently 

specific, or timely. The contracting 

officer must send all protests, along 

with a referral letter and documents, 

directly to the Director for Government 

Contracting, U.S. Small Business 

Administration, 409 Third Street, SW., 

Washington, DC 20416, or by fax to 

(202) 205–6390, Attn: Women-Owned 

Small Business Status Protest. The 

contracting officer’s referral letter must 

include information pertaining to the 

solicitation that may be necessary for 

SBA to determine timeliness and 

standing, including: the solicitation 

number; the name, address, telephone 

number and facsimile number of the 

contracting officer; whether the 

protestor submitted an offer; whether 

the protested concern was the apparent 

successful offeror; when the protested 

concern submitted its offer; whether the 

procurement was conducted using 

sealed bid or negotiated procedures; the 

bid opening date, if applicable; when 

the protest was submitted to the 

contracting officer; when the protestor 

received notification about the apparent 

successful offeror, if applicable; and 

whether a contract has been awarded. In 

addition, the contracting officer must 

send copies of any documents provided 

to the contracting officer pursuant to 

§ 127.300(c)(2) (if the repository is 

unavailable). The D/GC or designee will 

decide the merits of EDWOSB or WOSB 

status protests. 

§ 127.604 How will SBA process an 

EDWOSB or WOSB status protest? 

(a) Notice of receipt of protest. Upon 

receipt of the protest, SBA will notify 

the contracting officer and the protestor 

of the date SBA received the protest and 

whether SBA will process the protest or 

dismiss it under paragraph (b) of this 

section. The contracting officer may 

award the contract after receipt of a 

protest if the contracting officer 

determines in writing that an award 

must be made to prevent significant 

harm to the public interest. 

(b) Dismissal of protest. If SBA 

determines that the protest is premature, 

untimely, nonspecific, or is based on 

nonprotestable allegations, SBA will 

dismiss the protest and will send the 

contracting officer and the protestor a 

notice of dismissal, citing the reason(s) 

for the dismissal. Notwithstanding 

SBA’s dismissal of the protest, SBA 

may, in its sole discretion, consider the 

protest allegations in determining 

whether to conduct an examination of 

the protested concern pursuant to 

subpart D of this part or submit a protest 

itself. 

(c) Notice to protested concern. If SBA 

determines that the protest is timely, 

sufficiently specific and is based upon 

protestable allegations, SBA will: 

(1) Notify the protested concern of the 

protest and request information and 

documents responding to the protest 

within five (5) business days from the 

date of the notice. These documents will 

include those that verify the eligibility 

of the concern, respond to the protest 

allegations, and copies of proposals or 

bids submitted in response to an 

EDWOSB or WOSB solicitation. In 

addition, EDWOSBs will be required to 

submit a copy of SBA Form 413, 


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Personal Financial Statement, the two 

most recent personal income tax returns 

(including all schedules and W–2 forms) 

for the women claiming economic 

disadvantage and their spouses, unless 

the individuals and their spouses are 

legally separated, and SBA Form 4506– 

T, Request for Tax Transcript Form. 

SBA may draw an adverse inference 

where a concern fails to cooperate in 

providing the requested information and 

documents; and 

(2) Forward a copy of the protest to 

the protested concern. 

(d) Time period for determination. 

SBA will determine the EDWOSB or 

WOSB status of the protested concern 

within fifteen (15) business days after 

receipt of the protest, or within any 

extension of that time that the 

contracting officer may grant SBA. If 

SBA does not issue its determination 

within the fifteen (15)-day period, the 

contracting officer must contact SBA to 

ascertain when SBA estimates that it 

will issue its decision, and may award 

the contract if he or she determines in 

writing that there is an immediate need 

to award the contract and that waiting 

until SBA makes it determination will 

harm public interest. 

(e) Notification of determination. SBA 

will notify the contracting officer, the 

protestor, and the protested concern in 

writing of its determination. If SBA 

sustains the protest, SBA will issue a 

decision explaining the basis of its 

determination and requiring that the 

concern remove its designation on the 

CCR and ORCA as an EDWOSB or 

WOSB, as appropriate. Regardless of a 

decision not to sustain the protest, SBA 

may, in its sole discretion, consider the 

protest allegations in determining 

whether to conduct an examination of 

the protested concern pursuant to 

subpart D of this part. 

(f) Effect of determination. SBA’s 

determination is effective immediately 

and is final unless overturned by SBA’s 

Office of Hearings and Appeals on 

appeal pursuant to § 127.605. 

(1) A contracting officer may award 

the contract to a protested concern after 

the D/GC either has determined that the 

protested concern is an eligible WOSB 

or EDWOSB or has dismissed all 

protests against it. If OHA subsequently 

overturns the D/GC’s determination or 

dismissal, the contracting officer may 

apply the OHA decision to the 

procurement in question. 

(2) A contracting officer may not 

award the contract to a protested 

concern that the D/GC has determined 

is not an EDWOSB or WOSB for the 

procurement in question. 

(i) If a contracting officer receives 

such a determination after contract 

award, and no OHA appeal has been 

filed, the contracting officer shall 

terminate the award. 

(ii) If a timely OHA appeal has been 

filed after contract award, the 

contracting officer must consider 

whether performance can be suspended 

until an appellate decision is rendered. 

(iii) If OHA affirms the initial 

determination finding that the protested 

concern is ineligible, the contracting 

officer shall either terminate the 

contract or not exercise the next option. 

(2) The contracting officer must 

update the Federal Procurement Data 

System–Next Generation (FPDS–NG) 

and other procurement reporting 

databases to reflect the final agency 

decision. 

(3) A concern that has been found to 

be ineligible may not represent itself as 

a WOSB or EDWOSB on another 

procurement until it cures the reason for 

its ineligibility. A concern that believes 

in good faith that it has cured the 

reason(s) for its ineligibility may request 

an examination under the procedures 

set forth in § 127.405. 

§ 127.605 What are the procedures for 

appealing an EDWOSB or WOSB status 

protest decision? 

The protested concern, the protestor, 

or the contracting officer may file an 

appeal of a WOSB or EDWOSB status 

protest determination with SBA’s Office 

of Hearings and Appeals (OHA) in 

accordance with part 134 of this 

chapter. 

Subpart G—Penalties 

§ 127.700 What penalties may be imposed 

under this part? 

Persons or concerns that falsely selfcertify or otherwise misrepresent a 

concern’s status as an EDWOSB or 

WOSB for purposes of receiving Federal 

contract assistance under this part are 

subject to: 

(a) Suspension and Debarment 

pursuant to the procedures set forth in 

the Federal Acquisition Regulations, 48 

CFR 9.4; 

(b) Administrative and civil remedies 

prescribed by the False Claims Act, 31 

U.S.C. 3729–3733 and under the 

Program Fraud Civil Remedies Act, 31 

U.S.C. 3801–3812; 

(c) Administrative and criminal 

remedies as described at Sections 16(a) 

and (d) of the Small Business Act, 15 

U.S.C. 645(a) and (d), as amended; 

(d) Criminal penalties under 18 U.S.C. 

1001; and 

(e) Any other penalties as may be 

available under law. 

PART 134—RULES OF PROCEDURE 

GOVERNING CASES BEFORE THE 

OFFICE OF HEARINGS AND APPEALS 

6. The Authority citation for part 134 

continues to read as follows: 

Authority: 5 U.S.C. 504, 15 U.S.C. 632, 

634(b)(6), 637(a), 637(m), 648(l), 656(i) and 

687(c); E.O. 12549, 51 FR 6370, 3 CFR, 1986 

Comp., p. 189. 

Subpart A—General Rules 

7. Section 134.102(s) is republished to 

read as follows: 

§ 134.102 Jurisdiction of OHA 

* * * * * 

(s) Appeals from Women-Owned 

Small Business or EconomicallyDisadvantaged Women-Owned Small 

Business protest determinations under 

Part 127 of this chapter; 

* * * * * 

Subpart E—Rules of Practice for 

Appeals From Service-Disabled 

Veteran Owned Small Business 

Concern Protests 

8. Section 134.515(b) is republished to 

read as follows: 

§ 134.515 What are the effects of the 

Judge’s decision? 

* * * * * 

(b) The Judge may reconsider an 

appeal decision within twenty (20) 

calendar days after issuance of the 

written decision. Any party who has 

appeared in the proceeding, or SBA, 

may request reconsideration by filing 

with the Judge and serving a petition for 

reconsideration on all the parties to the 

appeal within twenty (20) calendar days 

after service of the written decision. The 

request for reconsideration must clearly 

show an error of fact or law material to 

the decision. The Judge may also 

reconsider a decision on his or her own 

initiative. 

* * * * * 

9. Revise Subpart G to read as follows: 

Subpart G—Rules of Practice for Appeals 

From Women-Owned Small Business 

Concern (WOSB) and Economically 

Disadvantaged WOSB Concern (EDWOSB) 

Protests 

Sec. 

134.701 What is the scope of the rules in 

this subpart G? 

134.702 Who may appeal? 

134.703 When must a person file an appeal 

from an WOSB or EDWOSB protest 

determination? 

134.704 What are the effects of the appeal 

on the procurement at issue? 

134.705 What are the requirements for an 

appeal petition? 

134.706 What are the service and filing 

requirements? 


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134.707 When does the D/GC transmit the 

protest file and to whom? 

134.708 What is the standard of review? 

134.709 When will a Judge dismiss an 

appeal? 

134.710 Who can file a response to an 

appeal petition and when must such a 

response be filed? 

134.711 Will the Judge permit discovery 

and oral hearings? 

134.712 What are the limitations on new 

evidence? 

134.713 When is the record closed? 

134.714 When must the Judge issue his or 

her decision? 

134.715 Can a Judge reconsider his 

decision? 

Subpart G—Rules of Practice for 

Appeals From Women-Owned Small 

Business Concern (WOSB) and 

Economically Disadvantaged WOSB 

Concern (EDWOSB) Protests 

§ 134.701 What is the scope of the rules in 

this subpart G? 

(a) The rules of practice in this 

subpart G apply to all appeals to OHA 

from formal protest determinations 

made by the Director for Government 

Contracting (D/GC) in connection with a 

Women-Owned Small Business Concern 

(WOSB) or Economically Disadvantaged 

WOSB Concern (EDWOSB) protest. 

Appeals under this subpart include 

issues related to whether the concern is 

owned and controlled by one or more 

women who are United States citizens 

and, if the appeal is in connection with 

an EDWOSB contract, that the concern 

is at least 51 percent owned and 

controlled by one or more women who 

are economically disadvantaged. This 

includes appeals from determinations 

by the D/GC that the protest was 

premature, untimely, nonspecific, or not 

based upon protestable allegations. 

(b) Except where inconsistent with 

this subpart, the provisions of subparts 

A and B of this part apply to appeals 

listed in paragraph (a) of this section. 

(c) Appeals relating to formal size 

determinations and NAICS Code 

designations are governed by subpart C 

of this part. 

§ 134.702 Who may appeal? 

Appeals from WOSB or EDWOSB 

protest determinations may be filed 

with OHA by the protested concern, the 

protestor, or the contracting officer 

responsible for the procurement affected 

by the protest determination. 

§ 134.703 When must a person file an 

appeal from an WOSB or EDWOSB protest 

determination? 

Appeals from a WOSB or EDWOSB 

protest determination must be 

commenced by filing and serving an 

appeal petition within ten (10) business 

days after the appellant receives the 

WOSB or EDWOSB protest 

determination (see § 134.204 for filing 

and service requirements). An untimely 

appeal must be dismissed. 

§ 134.704 What are the effects of the 

appeal on the procurement at issue? 

Appellate decisions apply to the 

procurement in question. If the 

contracting officer awarded the contract 

to a concern that OHA finds to be 

ineligible, then the contracting officer 

shall terminate the contract, not exercise 

any options, or not award further task or 

delivery orders. 

§ 134.705 What are the requirements for an 

appeal petition? 

(a) Format. There is no required 

format for an appeal petition. However, 

it must include the following 

information: 

(1) The solicitation or contract 

number, and the name, address, and 

telephone number of the contracting 

officer; 

(2) A statement that the petitioner is 

appealing a WOSB or EDWOSB protest 

determination issued by the D/GC and 

the date that the petitioner received it; 

(3) A full and specific statement as to 

why the WOSB or EDWOSB protest 

determination is alleged to be based on 

a clear error of fact or law, together with 

an argument supporting such allegation; 

and 

(4) The name, address, telephone 

number, facsimile number, and 

signature of the appellant or its attorney. 

(b) Service of appeal. The appellant 

must serve the appeal petition upon 

each of the following: 

(1) The D/GC at U.S. Small Business 

Administration, 409 3rd Street, SW., 

Washington, DC 20416, facsimile (202) 

205–6390; 

(2) The contracting officer responsible 

for the procurement affected by a WOSB 

or EDWOSB determination; 

(3) The protested concern (the 

business concern whose WOSB or 

EDWOSB status is at issue) or the 

protester; and 

(4) SBA’s Office of General Counsel, 

Associate General Counsel for 

Procurement Law, U.S. Small Business 

Administration, 409 3rd Street, SW., 

Washington, DC 20416, facsimile 

number (202) 205–6873. 

(c) Certificate of Service. The 

appellant must attach to the appeal 

petition a signed certificate of service 

meeting the requirements of 

§ 134.204(d). 

§ 134.706 What are the service and filing 

requirements? 

The provisions of § 134.204 apply to 

the service and filing of all pleadings 

and other submissions permitted under 

this subpart unless otherwise indicated 

in this subpart. 

§ 134.707 When does the D/GC transmit 

the protest file and to whom? 

Upon receipt of an appeal petition, 

the D/GC will send to OHA a copy of 

the protest file relating to that 

determination. The D/GC will certify 

and authenticate that the protest file, to 

the best of his or her knowledge, is a 

true and correct copy of the protest file. 

§ 134.708 What is the standard of review? 

The standard of review for an appeal 

of a WOSB or EDWOSB protest 

determination is whether the D/GC’s 

determination was based on clear error 

of fact or law. 

§ 134.709 When will a Judge dismiss an 

appeal? 

(a) The presiding Judge must dismiss 

the appeal if the appeal is untimely filed 

under § 134.703. 

(b) The matter has been decided or is 

the subject of adjudication before a 

court of competent jurisdiction over 

such matters. However, once an appeal 

has been filed, initiation of litigation of 

the matter in a court of competent 

jurisdiction will not preclude the Judge 

from rendering a final decision on the 

matter. 

§ 134.710 Who can file a response to an 

appeal petition and when must such a 

response be filed? 

Although not required, any person 

served with an appeal petition may file 

and serve a response supporting or 

opposing the appeal if he or she wishes 

to do so. If a person decides to file a 

response, the response must be filed 

within seven (7) business days after 

service of the appeal petition. The 

response should present argument. 

§ 134.711 Will the Judge permit discovery 

and oral hearings? 

Discovery will not be permitted, and 

oral hearings will not be held. 

§ 134.712 What are the limitations on new 

evidence? 

The Judge may not admit evidence 

beyond the written protest file nor 

permit any form of discovery. All 

appeals under this subpart will be 

decided solely on a review of the 

evidence in the written protest file, 

arguments made in the appeal petition, 

and response(s) filed thereto. 

§ 134.713 When is the record closed? 

The record will close when the time 

to file a response to an appeal petition 

expires pursuant to § 134.710. 


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§ 134.714 When must the Judge issue his 

or her decision? 

The Judge shall issue a decision, 

insofar as practicable, within fifteen (15) 

business days after close of the record. 

§ 134.715 Can a Judge reconsider his 

decision? 

(a) The Judge may reconsider an 

appeal decision within twenty (20) 

calendar days after issuance of the 

written decision. Any party who has 

appeared in the proceeding, or SBA, 

may request reconsideration by filing 

with the Judge and serving a petition for 

reconsideration on all the parties to the 

appeal within twenty (20) calendar days 

after service of the written decision. The 

request for reconsideration must clearly 

show an error of fact or law material to 

the decision. The Judge may also 

reconsider a decision on his or her own 

initiative. 

(b) The Judge may remand a 

proceeding to the D/GC for a new WOSB 

or EDWOSB determination if the D/GC 

fails to address issues of decisional 

significance sufficiently, does not 

address all the relevant evidence, or 

does not identify specifically the 

evidence upon which it relied. Once 

remanded, OHA no longer has 

jurisdiction over the matter, unless a 

new appeal is filed as a result of the new 

WOSB or EDWOSB determination. 

Dated: February 19, 2010. 

Karen Gordon Mills, 

Administrator. 

[FR Doc. 2010–3887 Filed 3–2–10; 4:15 pm] 

BILLING CODE 8025–01–P 


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