New SBA Rule Promotes Growth and Development of Women-Owned Small Businesses

Women-owned small businesses are growing three times faster than their counterparts, yet they currently receive less than 5% of federal contracting dollars. The U.S. Small Business Administration (SBA) recently issued a final rule that is “a major step forward in leveling the playing field and supporting our country’s dynamic female entrepreneurs,” said SBA Administrator Maria Contreras-Sweet. This new rule encourages more women entrepreneurs to grow and start new businesses and create more jobs.

The SBA’s new rule, effective October 14, 2015, gives contracting officials the authority to award sole-source contracts to women-owned businesses without first placing the work out for bid. The rule seeks to provide greater opportunities for women-owned small businesses in the federal contracting marketplace, on par with the opportunities afforded to other types of small businesses. Contracting officials are currently able to award sole-source contracts to minority or service-disabled veteran-owned small businesses.

The rule sets out certain requirements that must be met before a sole source contract is awarded. First, a contract can only award up to $4 million (or $6.5 million for manufacturing contracts). Second, the selected woman-owned small business must be deemed a responsible contractor. Third, the selected woman-owned small business must be the only women-owned small business that can perform the work. Fourth, the award must be made at a fair and reasonable price.

The SBA is hopeful that this new rule will help the federal government achieve its goal of awarding 5% of its contract dollars to women-owned businesses. Women-owned businesses should be aware of this rule, which gives them a new competitive advantage in the federal marketplace and provides new opportunities to grow their business and revenues.

Stephanie Wilson is an attorney Berenzweig Leonard, LLP. She can be reached at SWilson@BerenzweigLaw.com. Sara Almousa is an intern with Berenzweig Leonard, LLP.