The SBA Inspector General (IG) issued an audit report late last week that found 50 of the 56 sole source awards the IG chose to review were done incorrectly, either by the contracting officer or the woman-owned business.  They found paperwork problems, such as self-certifying WOSBs that did not have all of their required documentation in place, contracting officers that awarded a sole source with a NAICS code that was not in the WOSB program or awarded a sole source under a NAICs code that the WOSB had not indicated they were eligible to perform the work.

To read the full report visit:  https://bit.ly/2tyir3G

To those of us who have been involved with the Women-Owned Small Business (WOSB) Procurement Program from the inception, this is not the first time the SBA Inspector General has aggressively advocated to do away with self-certification in the WOSB program. The Congress passed legislation in 2015, instructing the SBA to stand up a certification program, replacing self-certification. The SBA has stated that it is in the process of putting together this directive sometime later this year.

There is history behind this effort – when the program was put in place in 2011, it would have taken decades and further delays for an SBA certification program to be put into place.  Therefore, the SBA opted to allow self-certification and third-party certification in its stead.  The IG was directed to aggressively investigate fraudulent companies, but we are not aware of any such efforts or reports from the IG issued with that focus.  In fact, WIPP sent a letter to the IG asking for status of investigations into fraudulent companies and is not aware of a response.

Specifically, the IG makes the following recommendations:

1. Conduct eligibility reviews for the firms identified in this report that lacked the required documentation in Certify.SBA.gov and require those firms to remove their designation in the System for Award Management.
2. Initiate debarment proceedings, if warranted based on the results of eligibility reviews in Recommendation 1.
3. Implement a Women-Owned Small Business Federal Contracting Program certification process as required by the National Defense Authorization Act for FY2015.
4. Conduct quarterly reviews of firms with newly obtained WOSB or EDWOSB status, to ensure that they have the required documentation in Certify.SBA.gov, until SBA implements a Women-Owned Small Business Federal Contracting Program certification process.
5. Conduct quarterly reviews of Federal Procurement Data System-Next Generation data for Program set-aside contracts to ensure Federal agencies’ contracting officers used the appropriate North American Industry Classification System codes and take the necessary action(s) with identified exceptions.
6. In coordination with the Office of Federal Procurement Policy and the General Services Administration, strengthen controls in the Federal Procurement Data System-Next Generation to prevent Federal agencies’ contracting officers from using ineligible North American Industry Classification System codes.

SBA Response

At the end of the report, the SBA provides a rebuttal to the IG’s recommendations.  The SBA reiterates its intention to establish a certification program sometime this year with implementation next year.  The SBA questions the IG’s data conclusion saying that miscoding on FPDS does not necessarily mean that the sole source contract was improperly awarded and rejects the recommendation that SBA should check quarterly reviews on women new to the program and on contracts awarded through the program, ensuring contracting officers used the proper NAICs codes.  The SBA also disagrees with the IG interpretation that sole source contracts should only be awarded when SBA has a certification in place.

WIPP Perspective

WIPP led a 13- year effort to put in place the WOSB Procurement Program garnering the support of women-owned companies nationwide.  The SBA’s IG audit found much of what we already know antidotally – that the program is complex, that contracting officers and women alike are confused by the requirements, and more education is needed.  We do not agree with the IG that it was the intention of Congress to require an SBA certification before any sole source awards could be issued.  We know this to be true because we were there when it happened – leading the charge on this effort. Furthermore, we find the recommendation that WOSBs should be monitored quarterly for compliance as demeaning given the recommendation is specific to WOSBs only.

We agree that the WOSB program should be better utilized by the contracting community.  The government has only met its 5% women-owned goal once.  Since 2013, WIPP has educated tens of thousands of women on federal contracting opportunities via the WOSB procurement program through our ChallengeHER and Give Me 5 programs.  We call on Congress and the SBA to encourage federal agencies to use the WOSB program and simplify the requirements, which have proven to be confusing.  We will continue to promote federal contracts to women-owned companies both in our advocacy and our programming.

If you have any questions regarding this report, please contact WIPP’s Chief Advocate, Ann Sullivan at asullivan@madisonservicesgroup.com.