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Focus on Regulation

SBA Removes Award Caps from Women Owned Small Business Set Asides

On May 7, 2013, the Small Business Administration issued an interim final rule that removed limits on the dollar value of awards that may be set aside for Women Owned Small Businesses (WOSB) and Economically Disadvantaged Women Owned Small Businesses (EDWOSB). See 78 Fed. Reg. 26504 (May 7, 2013).  Previously, for a contract to be set aside under the WOSB program, the award total had to be below $6.5 million for manufacturing contracts and $4 million for non-manufacturing contracts.  Now, contracts of any dollar amount may be set aside under the WOSB program, as long as other WOSB program requirements are satisfied.

The interim rule implements Section 1697 of the National Defense Authorization Act for FY13 (Public Law 112-239), which amended Section 8(m)(2) of Small Business Act by removing dollar caps on WOSB set-asides.  The drafters of the language, Sen. Olympia Snowe (R-Maine) and Sen. Mary Landrieu (D-La.), are hoping that lifting the dollar limitation will increase set aside opportunities under the WOSB set-aside program – which to date, has not produced the level and amount of set aside opportunities expected.  The resulting effect is that contracting officers may now set aside contracts under the program if: “(1) There is a reasonable expectation that, in industries in which WOSBs are underrepresented, two or more EDWOSBs will submit offers for the contract or, in industries where WOSBs are substantially underrepresented, two or more WOSBs will submit offers for the contract; and (2) in the estimation of the contracting officer, the contract can be awarded at a fair and reasonable price.”  78 Fed. Reg. 26504, 26506.

The SBA released the interim rule without soliciting public comment on a proposed rule.  It justified this action in the Federal Register notice, stating that because the rule was consistent with the statute and needed to be implemented quickly, prior discussions were not necessary.  The SBA indicated it will still review comments on the rule submitted within 30 days of the release of the final rule.  The interim rule is effective immediately.

Marta Anne Thompson, an Associate in Hogan Lovells’ Government Contracts Practice, contributed to this post.