Ernst, Duckworth Seek to Eliminate Discrepancy in Small Business Contracting That Puts Women, Veterans at a Disadvantage

WASHINGTON – U.S. Senators Joni Ernst (R-IA) and Tammy Duckworth (D-IL), the first two women combat veterans to serve in the Senate, are working to eliminate a discrepancy that puts women and service-disabled veterans who own small businesses at a disadvantage when competing for contracts.

“Iowa is the proud home to more than 200 women-owned small businesses and more than 50 small businesses owned by service-disabled veterans. Starting and operating a small business is an exciting and rewarding experience, but it comes with risk,” said Senator Joni Ernst. “Women- and veteran-owned small businesses should be afforded the same contracting opportunities as businesses certified under other programs. This bipartisan measure is a sensible and simple fix to help ensure all of Iowa’s small business owners get a fair shot to compete and succeed.”

“If we want to help main street, we need to make it easier for small businesses to expand their business and hire new workers,” Duckworth said. “This bipartisan legislation will help do that by leveling the playing field for small businesses that are owned by women and Veterans with service-connected disabilities and are competing for federal contracts. By doing so, this bill will expand opportunities for these small businesses, and encourage economic growth.”

The Expanding Contracting Opportunities for Small Businesses Act would ensure small businesses, regardless of the program they are certified under, have access to the same threshold of benefits in sole-source contracting. It would also give the Small Business Administration (SBA) more authority to identify and deter fraud and abuse in the contracting process.

Background:

Current law, under the Small Business Act, is designed to allow certified small businesses to be awarded sole-source contracts, as a way of ensuring they are not forced out of opportunities by larger multiple-award contracts that are generally more difficult for them to earn.

While small businesses that are certified under the 8(a) Business Development and HUBZone programs can receive sole-source contracts of up to $7 million for manufacturing, Women-Owned Small Businesses (WOSBs) and Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) are limited to only $6.5 million.

In addition, WOSBs and SDVOSBs currently rely on self-certification for eligibility and not front-end certification from the SBA, like small businesses in the 8(a) Business Development and HUBZone programs. A recent SBA Inspector General report on WOSBs found that the majority of contracts sampled under the self-certification process failed to comply with federal rules. This means fraud and abuse could exist in the contracting process.

The Expanding Contracting Opportunities for Small Businesses Act would eliminate the discrepancy between sole-source programs, setting the contract manufacturing threshold at $7 million for businesses certified under each program. The bill would also strengthen oversight on the eligibility process to deter fraud by authorizing a new eligibility determination check by the SBA.

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