WOSB / EDWOSB Certification

The WOSB/EDWOSB Program is administered by the Small Business Administration (SBA) and is designed to help firms that are owned and operated by women owners. The “ED” in EDWOSB stands for Economically Disadvantaged”. Congress through the SBA has mandated that a budget goal of 5% of all federal prime contracts are to be spent with women owned small business. This dollar value is approximately $15-20 Billion Dollars annually. The SBA also determined that there are 83 Industries represented by (4 digit) NAICS Codes where women are significantly underrepresented. In order to assist women in the process of making progress in these industries the SBA has allowed for set-aside contracts to be issued in these NAICS Codes to WOSB and EDWOSB firms. The NAICS Codes or industry classification codes with the least amount of women owned firms out of the 83 industries require the WOSB certification for set-aside contracts. This is because the SBA is willing to help any woman owned firm wishing to penetrate these male dominated industries. The NAICS Codes where some women owned firms exist but are still underrepresented relative to all businesses the EDWOSB or Economically Disadvantaged Woman Owned Small Business certification is required for set-aside contracts. A firm holding an EDWOSB certification can bid both WOSB and EDWOSB set-aside contracts. A firm only holding the WOSB certification can only bid on WOSB set-aside contracts.

Additional Information Regarding WOSB/EDWOSB

The following are the limitations for the portion that a SDVOSBC as a prime contractor can sub-contractor to another firm. These limitations are the following:

In most cases your firm cannot participate in the WOSB or EDWOSB program while the owner of the firm has a full-time job at another company.

The woman who owns the firm will need to have the managerial and educational experience needed to show she has the capability of running the firm. The woman owner does not necessarily have to hold the license or certification or have technical experience in the industry meet this requirement. Additional scrutiny will be placed on the firm if a man possesses the skills or required licensees and has an equity interest in the firm.

The woman’s ownership of the firm must be unconditional meaning that her ownership must not be subject to any conditions, agreements or arrangements that cause or potentially cause the ownership benefit to go to another.

A stock purchase agreement can be present however the purchase agreement in a seller-financed transactions cannot affect the unconditional nature of the ownership for the woman who is the owner of the firm. The terms of the agreement must follow the normal commercial practices and the owner must retain control of the firm absent violations of the terms.

In order to be considered economically disadvantaged for the EDWOSB certification a woman must meet the following criteria;
a.) has a personal net worth of less than $750,000;
b.) her adjusted gross income AGI for the last 3 years does not exceed $350,000; and
c.) the fair market value of all her assets does not exceed $6,000,000.

There are several exclusions for
“a.) Net worth $750,000” the items that are excluded are the following: -Equity interest of the primary residence -Funds invested in IRA or other retirement accounts that are unavailable until retirement age without significant penalty. -The woman’s ownership in the ED/WOSB firm is excluded The exclusions for
“b.) AGI $350,000” include the following exemptions: Any income received by your ED/WOSB that is an S corporation, LLC, etc. if you can provide documentation that the funds were reinvested in the ED/WOSB or the distribution was soley for the purpose of paying taxes arising from the normal course of business operations.
There is only one exclusion for
“c.) Fair Market Value of Assets $6,000,000” this is that the woman who is applying’s IRA or other official retirement accounts if they are unavailable until retirement age without a significant penalty being paid to receive the funds earlier.

The SBA will review the husband/spouse’s financial situation to explore the following two (2) areas for determining EDWOSB eligibility for the wife; a.) Access to credit if the spouse is an officer or director of the company (guaranteed loans, lent money, provided financial support). b.) Similar lines of business, shared employees, similar firm names, shared or similar websites or equipment. If the husband/spouse is in a similar business the SBA can also include the spouse’s financial situation.

Unlike other SBA Certifications Joint Ventures for ED/WOSB firms do not have to be approved by the SBA. The requirements that must be included in the joint venture are a.) ED/WOSB must be the managing venture in the joint venture; b.) ED/WOSB must not make less than 51% of the profits; c.) The ED/WOSB must retain the final original records upon contract completion.

ED/WOSB firm are required to perform the following percentage of a federally awarded prime contract:

Service Contracts : at least 50%
Supply Contracts (if you are the manufacturer) : at least 50%
General Construction at least 15%
Specialty Construction at least 25%
Reseller who is not a manufacture no requirement

In most cases the SBA will conduct an ED/WOSB’s eligibility exam at the ED/WOSB firm’s offices. Generally this type of examination only occurs as part of a protest allegation from an interested third party during the course of a bid review/submittal.

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