WIPP Comment on SBA Proposed Rule (Sole Source)
Tuesday, June 23, 2015
June 22, 2015
Filed electronically at http://www.regulations.gov
Ms. Brenda Fernandez
U.S. Small Business Administration
Office of Policy, Planning and Liaison
409 3rd St., SW 8th Floor
Washington, D.C. 20416
Re: RIN 3245-AG72; Docket #SBA-2015-0004: Women-Owned Small Business Federal Contract Program
Dear Ms. Fernandez,
On behalf of our coalition of 4.7 million women business owners and 78 organizations, Women Impacting Public Policy (WIPP) is pleased to submit comments on the Small Business Administration (SBA) Proposed Rule (“rule”) regarding the Women-Owned Small Business Federal Contract Program (“WOSB program”), issued May 1, 2015. As a leading advocate for women entrepreneurs engaged in or considering entering the federal marketplace, we appreciate SBA’s expedited implementation of sole source authority.
The addition of sole source authority to the WOSB program is a valuable tool in bringing women entrepreneurs into the federal marketplace. The benefits of this are visible in the other small business contracting programs that already have this authority. We note that women were the last to receive such authority, but appreciate SBA’s efforts to remedy this situation as fast as possible.
Bringing parity to the WOSB Program and an expedited review of the eligible NAICS was a top priority of WIPP, as documented in hearings and testimony throughout the legislative history. As WIPP has commented, sole source authority removes a barrier to entry in the federal market. A Senate Small Business & Entrepreneurship Report, 21st Century Barriers to Women’s Entrepreneurship, found that lack of sole source authority was a driver behind the government’s twenty-year failure to reach the goal of awarding five percent of federal contracts to women-owned small businesses.
WIPP applauds SBA for moving swiftly, and notes there is precedent for acting quickly to improve the program. In 2013, a statutory change to remove the dollar caps on contracts awarded through the program was put into effect six months after enactment. Doing so tripled the amount of dollars awarded through the WOSB Procurement Program. We hope sole source authority will be on a similar track.
By speedily promulgating a final rule and urging Federal Acquisition Regulatory (FAR) Council adoption, SBA can make a real difference to women entrepreneurs and a clear statement that achieving the 5% goal is a top priority of the SBA. WIPP’s comments below address individual sections of the rule:
Sole Source Authority
As proposed, sole source authority would be available under the following conditions:
If a contracting officer conducts market research in an industry where a WOSB or EDWOSB set aside is authorized, and the contracting officer cannot identify two or more WOSBs or EDWOSBs that can perform at a fair and reasonable price, but identifies one WOSB or EDWOSB that can perform at a fair and reasonable price, the contracting officer would be able to award the contract on a sole source basis, if the value of the contract, including options, does not exceed $6.5 million for manufacturing contracts and $4 million for all other contracts.
WIPP believes this is a clear description of the sole source provision as passed by the FY2015 NDAA.
WIPP supports SBA’s proposal to align sole source protest rules with other small business contracting programs. The rule, however, removes the sentence, “Any other party or individual may submit information to the contracting officer or SBA in an effort to persuade them to initiate a protest.” from § 127.600. While the intent of the change is unclear, WIPP asks for clarification on how this impacts the ability for anyone to report fraud in the WOSB/EDWOSB program with regards to a specific procurement.
Expedited Study on Underrepresentation
In the proposed rule, SBA changes the definition of underrepresentation, seemingly to conform to a new deadline for the study that examines eligible NAICS codes. This shift has enormous potential by creating new definitions of “underrepresentation” and “substantial underrepresentation.” Currently, these terms are defined by a disparity ratio between awards to WOSBs and the number of WOSBs in that industry (represented by NAICS codes). The “underrepresentation” ratio is between 0.5 and 0.8, while "substantial underrepresentation" means a disparity ratio less than 0.5.
The new definitions contain no reference to the ratios, and instead propose a study using “a reliable and relevant methodology.” While SBA does not make clear the intent of the change as it pertains to the new study, WIPP hopes the move away from past studies will open the door to a broader interpretation of underrepresentation.
The rule also addresses the SBA decision to separate sole source authority from the legislation’s requirement that SBA amend the certification process for the WOSB Procurement Program. The law removes the current option of self-certification and gives a variety of options for certification, including third party, state, another federal agency, or the SBA.
This change will fundamentally alter the method in which women entrepreneurs qualify for the WOSB procurement program. We believe SBA’s action – to ensure that regulations implementing this change are done thoughtfully, with the input of stakeholders, and through the formal regulatory process - is the proper course of action. WIPP concurs with SBA that the regulatory process for certification will take significantly more time than implementation of sole source authority. Waiting to implement both will unduly delay a necessary component of the WOSB Procurement Program.
Finally, WIPP asks that SBA also consider strategies to best educate contracting officers on the changes to the WOSB Program. Their understanding of the Program and its recent changes are critical to its ultimate success and bringing more women business owners to the federal market.
When women entrepreneurs compete, the result is significant business growth. Women businesses are growing faster than male counterparts, and now add more than one trillion dollars in receipts to the American economy. Notably, expansion by women-owned firms during the recession, adding 500,000 jobs, came when male-owned firms were shrinking.
The Small Business Act describes this growth well, noting that the country’s “well-being cannot be realized unless the actual and potential capacity of small business is encouraged and developed.” WIPP supports SBA’s action in two respects: 1) bringing parity to the WOSB procurement program by including a sole source component and 2) ensuring maximum participation in federal contracting through sole-source contract awards. We strongly support the proposed rule and urge its expeditious adoption.
Thank you for the opportunity to comment. The SBA has been tireless in its advocacy to include women-owned businesses in the federal government’s buying activities.
Women Impacting Public Policy