[Federal Register Volume 80, Number 243 (Friday, December 18, 2015)]
[Proposed Rules]
[Pages 78984-78986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31806]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 80, No. 243 / Friday, December 18, 2015 / 
Proposed Rules  

[[Page 78984]]



SMALL BUSINESS ADMINISTRATION

13 CFR Part 127

RIN 3245-AG75


Women-Owned Small Business and Economically Disadvantaged Women-
Owned Small Business--Certification

AGENCY: U.S. Small Business Administration.

ACTION: Advance notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The U.S. Small Business Administration (SBA) is seeking input 
and comments on certification of Women-Owned Small Businesses (WOSB) 
and Economically Disadvantaged Women-Owned Small Businesses (EDWOSB) in 
connection with the Women-Owned Small Business Federal Contract Program 
(WOSB Program). SBA is planning to amend its regulations to implement 
section 825 of the National Defense Authorization Act for Fiscal Year 
2015 (2015 NDAA). Section 825 of the 2015 NDAA removed the statutory 
authority allowing WOSBs and EDWOSBs to self-certify. SBA intends to 
draft regulations to implement the statutory changes.

DATES: Comments must be received on or before February 16, 2016.

ADDRESSES: You may submit comments, identified by RIN 3245-AG75, by any 
of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     For mail, paper, disk, or CD/ROM submissions: Brenda J. 
Fernandez, Procurement Analyst, U.S. Small Business Administration, 
Office of Policy, Planning and Liaison, 409 Third Street SW., 8th 
Floor, Washington, DC 20416.
     Hand Delivery/Courier: Brenda J. Fernandez, Procurement 
Analyst, U.S. Small Business Administration, Office of Policy, Planning 
and Liaison, 409 Third Street SW., 8th Floor, Washington, DC 20416.
    SBA will post all comments on www.regulations.gov. If you wish to 
submit confidential business information (CBI) as defined in the User 
Notice at www.regulations.gov, please submit the information to: Brenda 
J. Fernandez, Procurement Analyst, U.S. Small Business Administration, 
Office of Policy, Planning and Liaison, 409 Third Street SW., 8th 
Floor, Washington, DC 20416, or send an email to 
[email protected]. Highlight the information that you consider 
to be CBI and explain why you believe SBA should hold this information 
as confidential. SBA will review the information and make the final 
determination on whether it will publish the information.

FOR FURTHER INFORMATION CONTACT: Brenda J. Fernandez, Procurement 
Analyst, Office of Policy, Planning and Liaison, 409 Third Street SW., 
Washington, DC 20416; (202) 205-7337; [email protected].

SUPPLEMENTARY INFORMATION: The WOSB Program, set forth in section 8(m) 
of the Small Business Act, 15 U.S.C. 637(m), authorizes Federal 
contracting officers to restrict competition to eligible Women-Owned 
Small Businesses (WOSBs) and Economically Disadvantaged Women-Owned 
Small Businesses (EDWOSBs) for Federal contracts in certain industries. 
Congress amended the WOSB Program with section 825 of the National 
Defense Authorization Act for Fiscal Year 2015, Public Law 113-291, 128 
Stat. 3292 (December 19, 2014) (2015 NDAA), which included language 
granting contracting officers the authority to award sole source awards 
to WOSBs and EDWOSBs and shortening the time period for SBA to conduct 
a required study to determine the industries in which WOSBs are 
underrepresented in federal contracting. In addition, section 825 of 
the 2015 NDAA amended the Small Business Act to create a requirement 
that a firm be certified as a WOSB or EDWOSB by a Federal Agency, a 
State government, SBA, or a national certifying entity approved by SBA. 
15 USCS 637(m)(2)(E).
    On September 14, 2015, SBA published in the Federal Register a 
final rule to implement the sole source authority for WOSBs and EDWOSBs 
and the revised timeline for SBA to conduct a study to determine the 
industries in which WOSBs are underrepresented. 80 FR 55019. SBA did 
not implement the certification portion of section 825 of the 2015 NDAA 
in this final rule because its implementation is more complicated, 
could not be accomplished by merely incorporating the statutory 
language into the regulations, and would have delayed the 
implementation of the sole source authority unnecessarily. SBA notified 
the public that because it did not want to delay the implementation of 
the WOSB sole source authority by combining it with changes in the 
certification requirements, SBA decided to implement the certification 
requirement through a separate rulemaking. This advance notice of 
proposed rulemaking (ANPR) seeks to solicit public comments to assist 
SBA in drafting a viable proposed rule to implement a WOSB/EDWOSB 
certification program.
    SBA seeks to better understand what the public believes is the most 
appropriate way to structure a WOSB/EDWOSB certification program. 
Although the language of section 825 of the 2015 NDAA authorizes four 
different types of certification programs (by a Federal Agency, a State 
government, SBA, or a national certifying entity approved by SBA), SBA 
requests comments as to whether each of the four types should be 
pursued, or whether one or more of the types of certification are not 
feasible. SBA also requests comments on whether there should be a grace 
period after implementation to give firms that have self-certified the 
time necessary to complete the certification process. If a grace period 
were implemented, how long should that period be? In addition, in 
drafting any proposed rule to implement a WOSB/EDWOSB certification 
process, SBA must also consider what should happen to the current WOSB 
repository. As such, SBA requests comments as to whether the repository 
should continue to be maintained after the certification program is 
implemented, and if so, why and in what capacity should it be used in 
the future.
    SBA's regulations currently authorize WOSB and EDWOSB 
certifications by third party national certifying entities approved by 
SBA, by SBA where the firm is owned and controlled by one or more women 
and has been certified as a Participant in the 8(a) Business 
Development (BD) Program, and by

[[Page 78985]]

states that have certified firms owned and controlled by women to be 
Disadvantaged Business Enterprises (DBEs) for the U.S. Department of 
Transportation's (DOT's) DBE program. 13 CFR 127.300(d). SBA seeks 
comments on how those certification processes are working, how they can 
be improved, and how best to incorporate them into any new 
certification requirements.
    To better understand how SBA should structure the new certification 
processes, this ANPR seeks comments in response to the questions below, 
relating to each of the four certification approaches.

Third Party Certification

    As noted above, SBA regulations currently provide for certification 
by third party national certifying entities that have been approved by 
SBA. To date, SBA has approved four third party entities to certify 
firms as WOSBs and EDWOSBs.
    1. How many third party certifiers would be needed to adequately 
serve the full community of WOSBs and EDWOSBs seeking certification?
    2. Should SBA modify its regulations to add more information about 
the procedures and processes used by third party certifiers to certify 
firms as WOSBs and EDWOSBs for SBA's WOSB program?
    3. Should SBA regulations contain information on how to become an 
approved third party certifier?
    4. What type of notice should be required to identify third party 
certifiers?
    5. Should cost to EDWOSB and WOSBs be part of the criteria that SBA 
considers when deciding whether to approve one or more additional third 
party certifiers? If so, what if any methodology should SBA utilize 
when considering cost?
    6. Should SBA consider the ongoing cost of recertification when 
evaluating third party certifiers?
    7. Should SBA determine the term period a third-party certification 
is valid? If so, what should be an appropriate term for certification 
validity?
    8. Should SBA authorize a third-party limited access to an 
applicant's repository file for the purpose of directly uploading 
approved certification documents?
    9. Should SBA change its current processes regarding denials by 
third party certifiers?
    10. In the future, should SBA consider allowing third party 
certifiers to approve mentor-prot[eacute]g[eacute] agreements and joint 
venture agreements involving EDWOSB and WOSB participants?

Certification by States and Other Federal Agencies

    The changes to the WOSB program made by section 825 of the 2015 
NDAA authorize WOSB and EDWOSB certifications by other Federal agencies 
and State governments. SBA's current regulations authorize SBA to 
recognize WOSB certifications made by states that have certified firms 
that are owned and controlled by women to be DBEs for the DOT's DBE 
program. The regulations do not, however, recognize any other State 
certifications and do not authorize other Federal agencies to certify 
WOSBs and EDWOSBs.
    1. Should the authority to certify WOSBs and EDWOSBs be extended to 
States generally? If the authority should be extended, how should SBA 
authorize individual States to participate as WOSB and EDWOSB 
certifying entities (i.e., what sort of approval process should be 
implemented to ensure that SBA's WOSB and EDWOSB requirements are 
properly applied)?
    2. Should SBA accept DBE certifications for women-owned firms as 
conclusive of WOSB ownership and control status or should SBA look 
further at one or more specific eligibility requirement(s)?
    3. What other State entities might have sufficient expertise to 
make WOSB and EDWOSB certifications?
    4. Should SBA consider other Federal agencies as entities that can 
certify WOSBs and EDWOSBs? If so, how should that occur? Should an 
agency be able to certify a WOSB or EDWOSB only for purposes of a 
specific WOSB or EDWOSB contract with that agency? Which office within 
those agencies should bear the responsibility for this certification 
authority?
    5. Should there be a protest mechanism that would allow an 
interested party to protest the WOSB or EDWOSB status of a firm 
certified by a State or other Federal agency to SBA?

SBA Certification Program

    The changes to the WOSB program made by section 825 of the 2015 
NDAA authorize SBA to certify firms as WOSBs and EDWOSBs. SBA currently 
runs two certification programs. SBA certifies firms as 8(a) BD Program 
Participants under the 8(a) BD Program, and SBA certifies firms as 
HUBZone SBCs under the HUBZone Program. 13 CFR 124.201 through 124.207, 
and 126.300 through 226.309; see also https://www.sba.gov/content/steps-applying-8a-program; https://www.sba.gov/content/applying-hubzone-program. SBA's regulations currently recognize certification as 
an 8(a) BD Program Participant as evidence of a concern's status as a 
WOSB and EDWOSB, where it is clear that the firm is owned and 
controlled by one or more women. This is because the 8(a) BD program 
regulations have similar ownership and control requirements as those 
applicable to WOSBs and EDWOSBs under the WOSB Program. In addition, 
the requirements governing economic disadvantage for EDWOSBs under the 
WOSB Program are similar to those applicable to Participants in the 
8(a) BD program. The ownership and control requirements for the HUBZone 
Program differ from those applicable to the WOSB Program. As such, 
certification as a HUBZone SBC does not qualify as certification as a 
WOSB or EDWOSB.
    If SBA were to set up its own WOSB/EDWOSB certification program, 
SBA would want to ensure that it creates an efficient system that 
enables eligible firms to become certified in a reasonable amount of 
time, with a reasonable amount of effort, while also providing the 
necessary oversight to ensure that this Program is not used by 
ineligible firms. In carrying out these objectives, there are many 
different forms and structures that SBA could adopt. For example, SBA 
could adopt a framework under which only minimal documentation is 
collected and reviewed at the time of application (such as corporate 
documents and some financial records). In such a scenario, SBA could 
then use its authority to conduct program examinations and carry out 
status protests to serve an oversight role. This approach would provide 
for a faster application and certification process, while still 
maintaining oversight by providing in-depth examination and protests 
relating to specific contracts. On the other hand, SBA could adopt a 
method that includes a detailed initial review, requiring extensive 
document production. Such a certification process would be similar to 
the 8(a) BD certification program. This would be a more thorough review 
providing additional oversight, and would be more time-consuming for 
both the SBA and WOSB/EDWOSB applicants.
    1. Should SBA limit its WOSB and EDWOSB certifications only to 
those made through the 8(a) BD program, as is currently authorized in 
SBA's regulations?
    2. Should SBA's regulations be clarified to specify how a women-
owned firm applying to the 8(a) BD program can simultaneously receive 
certification as a WOSB and EDWOSB?

[[Page 78986]]

    3. Recognizing that SBA has limited resources, should SBA create a 
new certification program specific to WOSBs and EDWOSBs? If so, how 
should SBA structure such a certification program so that the limited 
resources do not cause the time period for certification to be overly 
lengthy? How should SBA handle the likelihood of a large number of 
firms seeking certification once the certification process is 
operational? Should SBA consider or attempt to establish an online 
WOSB/EDWOSB certification program, with dynamic feedback during the 
certification process?
    4. What, if any, documents should SBA collect when certifying a 
firm as a WOSB or EDWOSB? Are the current repository document 
requirements unnecessary or significantly burdensome and if so, why?
    5. Should SBA and third-party certifiers utilize the same processes 
for certifying concerns as EDWOSBs and WOSBs?
    6. How long should the ED/WOSB certification process take? How 
would this compare with the current amount of time required for self-
certification?
    7. Should firms that SBA finds ineligible during the application 
process have the right to a request for reconsideration or an appeal of 
that decision? If an appeal, should it be to SBA's Office of Hearings 
and Appeals (OHA)? Currently, firms denied certification for the 8(a) 
BD program may appeal to OHA.
    8. How long should a certification be valid? Currently the System 
for Award Management (SAM) requires users to update and verify their 
information annually. Should firms certified by SBA as EDWOSBs or WOSBs 
be required to update their certifications manually?
    9. Should firms need to be recertified annually? If not annually, 
how long should WOSB or EDWOSB certification last? How should a firm be 
re-certified as a WOSB or EDWOSB once the time period for certification 
expires: should it have to re-apply anew, or should it be able to 
submit only those items to SBA for review that have changed since its 
initial certification? Should there be an online process that 
facilitates application or re-certification? If no changes have 
occurred, should the firm be able to submit an affidavit or declaration 
to that effect and be automatically re-certified?
    10. If a firm was previously certified by a third-party certifier, 
should it be able to apply to SBA for certification (or re-
certification), or should it be permitted to apply only to the entity 
that originally certified it?
    The SBA welcomes comments on the above questions and any other 
certification aspect of the WOSB Program. The SBA also welcomes any 
available data to help substantiate recommendations made in response to 
the foregoing questions, or other potential policy options. SBA reminds 
commenters that all submissions by commenters are available to the 
public upon request.

Maria Contreras-Sweet,
Administrator.
[FR Doc. 2015-31806 Filed 12-17-15; 8:45 am]
 BILLING CODE 8025-01-P