Women-Owned Small Businesses and Women Business Enterprises

Ladies and . . . ladies.  Do you own and run your own business?  If so, you may be eligible for certification as a Women-Owned Small Business (“WOSB”) or Women Business Enterprise (“WBE”).

Women-Owned Small Business

Pursuant to 15 U.S.C. § 637(m), the Federal Government is empowered to restrict competition for any contract for the procurement of goods or services by the Federal Government to small businesses owned and controlled by women.  15 U.S.C. § 644(g) further provides that the government goal for participation by small businesses owned and controlled by women for procurement contracts is at least 5%.  The requirements for qualifying as a WOSB are set forth in 13 CFR Part 127 and are, in summary:

1)      The business must meet the definition of a small business;

2)      The business must be not less than 51 percent owned and controlled by one or more women who are United States citizens (without regard to community property laws);

3)      The management and daily business operations of the business must be controlled by one or more women;

4)      A woman must hold the highest officer position in the business and must have managerial experience of the extent and complexity needed to run the business;

5)      The woman who holds the highest officer position of the business must manage it on a full-time basis and devote full-time to the business during the normal working hours of the business; and

6)      Women must control the general partnership interests of a partnership, control the management decisions of an LLC, or control the board of a corporation.

Accordingly, if you own and run a business that meets the foregoing requirements, you may be eligible for WOSB certification thereby enabling you to bid on select Federal Government contracts.  Also, in case you were wondering, and despite the introduction to this article (sorry guys), men are not excluded from being involved in the business. Without contradicting the above requirements, men are permitted to be involved in the management of the business and may have ownership interests.

Women’s Business Enterprise

If you are not in the business of seeking Federal Government contracts, then WOSB certification is likely not right for you.  That said, many private companies and state and local governments regularly award contracts to certified Women Business Enterprises.  WBE’s are essentially subject to the same classification requirements as a WOSB except that the business does not have to qualify as a small business. 

Closing Thoughts

Certification as a WOSB or WBE is not right for every business and it is definitely not a guarantee of lucrative contracts.  They are also document intensive processes which require the business to essentially open up all of its business records, including tax and financial information, to third-party certification agencies.  However, if you satisfy the requirements and are willing to jump through the hoops, you may be able to distinguish your business from competitors and open up many doors that would otherwise be unavailable to you.      

Written by: Doug Mitchell