Federal contracts that are supposed to be set aside for women-owned small businesses may actually be going to contractors that don’t meet those requirements, and the Small Business Administration has been deficient in overseeing such programs, according to a April report from the Government Accountability Office.
Between 2011 and 2018, approximately 3.5 percent of contracts under the set-aside were awarded to ineligible goods and services providers, according to GAO. A 2017 SBA sampling of contracts under the program found that 40 percent weren’t eligible.
The program is designed to encourage women-led businesses by ensuring that some federal contracts go to businesses that meet established standards in industries where women have traditionally been underrepresented.
The 2015 National Defense Authorization Act required three changes to the program: authorizing SBA to grant agencies the option of awarding sole-source contracts to WOSB, eliminating the ability for firms to self-certify that they are eligible for the program and allowing SBA to implement a new certification program.
But according to the watchdog’s report, SBA has only taken action on the sole-source authority, leaving deficiencies in their oversight of program certification.
“As of February 2019, SBA had not eliminated the option for program participants to self-certify that they are eligible to participate, as required by 2015 NDAA,” the report said. “SBA officials stated that this requirement would be addressed as part of the new certification process for the WOSB program, which they expect to implement by January 1, 2020.”
Meanwhile, GAO investigators found that SBA has no plans to regularly monitor third-party groups, which are authorized to determine contractor eligibility for the small business program.
“As a result, SBA cannot provide reasonable assurance that WOSB program requirements are being met and that the program is meeting its goals,” the report said.
GAO recommended that SBA develop a process to monitor how often women-owned small business awards are made to ineligible products and services and that the agency use the results from that monitoring to inform targeted outreach and training programs at agencies.
SBA officials agreed with the recommendation.