Date post: | 14-Jul-2015 |
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@VilmaBetancourt
Women-Owned Small Business Procurement Program
A Review of the of the
US Government Accountability Office’s Report:
Certifier Oversight and Additional Eligibility
Controls are Needed
(What, Who, Why, When)
Helping Women Grow their Businesses with WBE/WOSB/EDWOSB Certification
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
What: The US Government Accountability Office (GAO) was
asked by the Small Business Administration (SBA) to review the
Women-Owned Small Business Program (WOSB)
What the GAO reviewed:
•Relevant laws, Regulations, Program Documents
What the GAO analyzed:
•Federal Contracting Data from April 2011 to May 2014
Who the GAO interviewed:
•SBA employees
•Officials from Contracting Agencies
•Third-party Certifiers (except for WBENC)
•Women-Owned Small Businesses
•Organizations that represent the interests of Women-Owned Small Businesses
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
What was the focus of the GAO’s review?
The GAO examined, from August 2013 to October 2014, three areas of the
WOSB Program for the time period April 2011 to May 2014:
• How businesses are certified.
•Oversight procedures in place.
•The effectiveness of the procurement program – has it helped WOSBs and
Economically Disadvantaged Women-Owned Small Businesses (EDWOSB)?
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
What The GAO Reviewed
• “How Women Owned Small Businesses (WOSBs) and Economically Disadvantaged
WOSBs (EDWOSBs) are certified as eligible for the program.”
•“SBA Policies and Procedures to establish program eligibility, including the
responsibilities of businesses, third-party certifiers, contracting officers and the SBA.”
• Monthly reports from September 2011 – May 2014 from each of the four third-party
certifiers (SBA provided these reports).
• Developed “a dataset” they “could use for analyses, including creating and merging
monthly spreadsheets, identifying missing business names, and clearing the list of
duplicate entries.”
• The dataset was compared with the “Federal Procurement Data System-Next
Generation (FPDS-NG) for businesses that received WOSB program set-aside contracts.
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
Why did the GAO Review the WOSB Program?
The Small Business Administration asked the Government Accountability Office to
review the existing “Women-Owned Small Business Program including any effects it has
had on increasing contracting opportunities for WOSBs”. (The 2015 NDAA has made
changes to the WOSB program. Those changes are not reflected in this report.)
The SBA expects to have completed a new study of underrepresented EDWOSBs and
substantially underrepresented WOSBs by 2015 (no definitive information given).
When did the Review take place?
The audit took place from August 2013 to October 2014.
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
What options are available for a WOSB/EDWOSB certification?
1. Self-certifying as a Women-Owned Small Business or an Economically
Disadvantaged Women-Owned Small Business through SAM
(https://www.sam.gov/portal/SAM/##11) (free) (the 2015 NDAA removed the
self-certification option)
2. Certification by a Third-party SBA-approved certifiers (fees apply):
•El Paso Hispanic Chamber of Commerce
•National Women Business Owners Corporation
•US Women’s Chamber of Commerce
•Women’s Business Enterprise National Council (WBENC) (WBENC no
longer certifies EDWOSBs)
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
What are the fees of the Third-party Certifiers?
http://www.gao.gov/assets/670/666431.pdf
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
Who is the most active Third-party Certifier?
76% WBENC completed about 76% of ALL WOSB third-
party certifications performed from 8/2011 – 5/2014.
WBENC used 14 regional partner organizations to
review documents and issue certifications.
WBENC is the only third-party certifier not
interviewed by the GAO (p. 3 of GAO report).
The SBA does not have a copy of WBENC’s Standards and Procedures detailing
how they oversee Partner Organizations or Annual Compliance Reviews (p. 10).
SBA requested documents from WBENC and received an incomplete response
(p.11). The SBA did not follow up with WBENC on this matter.
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
SBA’s Annual Eligibility Examinations
In 2012 and 2013, the SBA conducted Annual Eligibility
Examinations on some of the businesses that received contracts
under the WOSB program. How many businesses were found
ineligible?
2012: 42% 2013: 43% Both self-certified and third-party certified businesses were
found to be ineligible at the time of the SBA review. The
SBA doesn’t know if in fact the businesses were ineligible
at the time of award. At 42% and 43%, there is an urgent
need to implement guidelines for everyone to follow.
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
SBA’s Annual Eligibility Examinations: No Controls in Place
After the SBA Annual Reviews, they did not institute new policies
to hinder fraud in the WOSB Program. Why? They felt:
• The examinations were a method to gain insight about the
program.
•The WOSBs may not understand the eligibility requirements.
(However, the SBA “could not explain how they had determined
lack of understanding was the cause of ineligibility among
businesses and have not made efforts to confirm that this was the
cause.”)
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
SBA’s Annual Eligibility Examinations: No Controls in Place
The SBA officials stated:
• “The levels of ineligibility found during the examinations were
similar to those found in examinations of its other socioeconomic
programs.”
•“WOSB businesses were deemed ineligible because they did not
understand the documentation requirements for establishing
eligibility and also attributed the ineligibility of third-party
certified businesses to improper uploading of documents by the
businesses themselves.” (The WBEs upload the documents, not
the Third-party certifiers.)
•SBA regards the bid protest process as a means of identifying
ineligibility, refers to the program as “self-policing”.
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
Third-party Certified WOSBs/EDWOSBs
The GAO “determined that the data on how many third-party
certified businesses received contracts as part of the WOSB
program were sufficiently reliable for our purposes by
corroborating a sample of businesses we identified as third-party
certified with documentation for the busineses in the WOSB
program repository. We were not able to determine how many
self-certified businesses obtained contracts under the program,
because the format of the documentation maintained in the
SBA repository does not include a record of documents that
were present at the time of contract award.”
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
WOSB Set-Aside Program Obligations
2012 2013
Women-Owned Small Business $33.30M $39.90M
Economically Disadvantaged
Women-Owned Small Business $39.20M $60.00M
The GAO found that “the WOSB program has had a
limited effect on Federal contracting opportunities
available to WOSBs.”
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
Federal Contracting Data: Top Departments & Agencies
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
Federal Contracting Data: Percentage of Contracts Awarded to
WOSBs
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
Federal Contracting Data: Percentage of Contracts Awarded to
WOSBs
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
What are the deficiencies that the GAO found?
•“ SBA performs minimal oversight of third-party certifiers – their
performance has not been reviewed.
• SBA has not developed procedures that provide reasonable assurance
that only eligible businesses obtain WOSB/EDWOSB set-aside contracts.
• SBA has not completed or implemented procedures to review the
monthly reports that third-party certifiers must submit.
• According to Federal standards for internal control, agencies should
have documented procedures, conduct monitoring, and ensure that any
review findings and deficiencies are resolved promptly.
• As a result of inadequate monitoring and controls, potentially ineligible
businesses may continue to incorrectly certify themselves as WOSBs.”
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
Recommendations by the GAO for Executive Action
“To help ensure the effective oversight of third-party certifiers, the Administrator
of SBA should establish and implement comprehensiveprocedures to monitor and
assess performance of certifiers in accord with the requirements of the third-party
certifier agreement and program regulations.
To provide reasonable assurance that only eligible businesses obtain WOSB set-
aside contracts, the Administrator of SBA should enhance examination of
businesses that register to participate in the WOSB program, including actions
such as:
• promptly completing the development of procedures to conduct annual eligibility
examinations and implementing such procedures;
• analyzing examination results and individual businesses found to be ineligible to
better understand the cause of the high rate of ineligibility in annual reviews, and
determine what actions are needed to address the causes; and
• implementing ongoing reviews of a sample of all businesses that have
represented their eligibility to participate in the program.”
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
What are the conclusions of the audit?
Conclusions:
1) “as the only Federal procurement set-aside specifically for
women-owned businesses, the WOSB program could play an
important role in limiting competition to certain Federal contracts
for WOSBs and EDWOSBs that are underrepresented in their
industries;
2) weaknesses in multiple areas of SBA’s management of the
program hinder effective oversight of the WOSB program.”
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
Suggested Changes That Might Increase Use of the WOSB Program
• Complexity and burdensome requirements – Contracting Officers
described challenges using the WOSB set-aside; advocates mentioned that
some Contracting Officers prefer the Third-party Certification.
Contracting Officers currently are required to confirm the WOSB had
uploaded required documents in the SBA repository is not required under
other contracting programs (this step is cumbersome and slows down the
process).
•Lack of awareness and agency commitment – An advocacy group
mentioned that their WOSB members encountered confusion and
reluctance on the part of the Contracting Officers to use the program.
• Changes to increase use of program – allowing Sole Source contracts (the
2015 NDAA now allows it), expanding the NAICS codes (SBA officials said
that they do not have the authority to change the list).
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
Disclosures
• Certified Site Visitor for the National Business Women Owners
Corporation (NWBOC), a Third-party Certifier of WBEs, WOSBs,
EDWOSBs, Veteran Business Enterprise (VBE), Veteran Woman
Business Enterprise (VWBE)
• Certified Business to Government Specialist/Consultant and an
experienced Government Contractor (Federal, State, Local
Municipalities)
• Woman/Minority/Small Business Enterprise Certification Consultant
This presentation was prepared by Vilma Betancourt-O’Day
([email protected]). I am a:
I am not an employee nor have I been contracted by the US Government to review the GAO report
mentioned throughout this presentation. They have not endorsed or approved this document. Opinions,
other than what the report states, are my own interpretation of the findings. Opinions not to be construed as
legal advice. Report can be found at: http://www.gao.gov/assets/670/666431.pdf
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
My Thoughts on SBA Accepting State Certifications:
It is a mistake. What were they thinking?
There is no uniformity in the certification parameters/requirements from state
to state.
WOSBs/EDWOSBs must be US Citizens – some States don’t require U.S.
Citizenship.
A Net Worth limit of $750,000 may be imposed at the State level – that limit
applies only to Economically Disadvantaged Women-Owned Businesses at the
Federal level. Women whose Net Worth exceeds $750,000 and qualify for the
WOSB Certification cannot be certified at the State level.
State Certifications are not based on specific NAICS codes, as the WOSB
Program requires. Various States use NIGP, not NAICS.
Some States have seriously flawed Small/Minority/DBE Certification programs
and don’t require the extensive documentation that third-party certifiers require.
(South Carolina is in desperate need of an overhaul of their Governor’s OSMBA
Certification, trust me.)
@VilmaBetancourt
The Women-Owned Small Business Procurement Program:
A Review of the GAO Report (What, Who, Why, When)
Thank you! The Government Accountability Office has performed an outstanding job in reviewing the Women-Owned Small Business Program, and we are all grateful for their laser-focus on this issue. The Small Business Administration has worked very hard on helping WOSBs and we thank them for their guidance and dedication. Women Impacting Public Policy (WIPP) for their unwavering support of all WOSBs (disclosure: I am a proud member). Third-party certifiers for working closely with WOSBs to get them certified and helping them grow their businesses. Legislators who, for over a decade, have been writing and implementing the WOSB regulations. All WOSBs – let’s work together with WIPP to help the SBA set the procedures needed so only eligible WOSBs and EDWOSBs prosper under this program.