No More Self-Certifying: New Act Requires Formal SBA Approval for Women-Owned Businesses to Count Toward Federal Goals

The aptly named WOSB Accountability Act is making a major change to how the federal government measures its success in contracting with Women-Owned Small Businesses (WOSBs). Right now, many WOSBs can simply “self-certify”—meaning they declare they meet the ownership requirements—to be counted when agencies track their progress toward WOSB contracting goals. This bill eliminates that practice entirely for goal tracking.

The Fine Print: Only Formal Certification Counts

Starting after the second fiscal year following the new rules, only WOSBs that have gone through formal certification under Section 8(m)(2)(E) of the Small Business Act will be counted toward an agency’s official WOSB contracting goals. Think of it this way: If you’re a small business owner, your self-declaration of WOSB status won't be enough to help the government hit its targets anymore. This is a big deal because those goals drive agency procurement decisions. The bill’s intent is clear: increase the rigor and accountability of the WOSB program by ensuring that every business counted has met a verifiable standard, not just signed a form.

The Catch-22 for Self-Certified Firms

If you’re a WOSB owner who has relied on self-certification, you need to pay attention to the timeline. The bill includes a temporary exception: If you were self-certified when the act passed and you’ve already applied for formal certification (either through the SBA or an approved third party), you get a temporary pass. Your business will still count toward the goals until the SBA makes a final decision on your application. This is a crucial lifeline for businesses already in the pipeline, but it puts immense pressure on those who haven't started the process yet. If your application is denied or severely delayed, you lose your counting status.

For example, imagine a marketing firm that has successfully won small federal contracts for years based on its self-certified WOSB status. Under this new rule, that firm must now navigate the formal certification process. If the firm delays or finds the process too complex, they might suddenly find themselves excluded from the data agencies use to measure their success, potentially reducing the incentive for contracting officers to work with them.

The Unfunded Mandate on the SBA

While the bill tightens standards, it also creates significant administrative headaches for the Small Business Administration (SBA)—and the bill explicitly states it doesn't authorize any new funding to cover the costs. The SBA Administrator has one year to write the new regulations and is mandated to provide Congress with quarterly progress reports. These reports must be detailed, covering application numbers, approval times, and administrative costs for both the SBA and the applicants. Essentially, the SBA is being told to overhaul a system, increase oversight, and report on it constantly, all without a dedicated budget increase.

This lack of funding is a potential bottleneck. If the SBA's certification processing times slow down due to strained resources, it could inadvertently penalize legitimate WOSBs by delaying their formal recognition. For a WOSB owner waiting for certification to qualify for contracts, a slow-moving, unfunded bureaucracy translates directly into lost business opportunities. This is the classic policy challenge: improving accountability is great, but forcing the agency responsible to do it on a shoestring budget often means the process becomes burdensome for the very people it’s supposed to help.