Federal Surety Watch: Potential Sole-Source Contracts for WOSBs and EDWOSBs

Anyone who has ever been in a bidding process understands that it comes down to a lot of factors, and having the lowest bid is rarely the main one. People outside the process sometimes joke that it must be easy to win, since all you have to do is remain low. It’s not like that. If it was, the bidding process would be nothing more than a game of “Name That Tune,” or a weird reverse auction. Bids take prices into account, but they also take work history, project plans, supply considerations, and a host of other factors into concern.

This seems like a fair way to do it, and it often is, but the problem is that it discourages firms that don’t have a long history to apply, and makes it harder for them to win a bid when they do. That’s why many people feel that the contracting world can be insular and difficult to crack, and it’s why there are programs designed to make it easier for businesses outside the traditional club to get a seat at the table. One way, which seems to be happening, is to make it easier for Women-Owned Small Businesses (WOSB) and Economically-Disadvantaged Women-Owned Small Businesses (EDWOSB) to obtain sole-source contracts, provided they have the right certification and sureties.

Understanding the Reason for WOSB Status

The government has an interest in getting the lowest price for the best goods, but unlike the private sector, the government also has a duty to do what is in the country’s best interest. This oftentimes means that firms get contracts who are not the least expensive or the most experienced, but it gives them a start they cannot easily get in the private sector and eventually they gain the credentials to bid on larger contracts without any hand-holding. This is important because when there are only a few companies bidding on essential government contracts, they can take unfair advantage of the government at taxpayer expense and if something happens to them, the government might not be able to obtain certain goods and services at all. So for that reason a large and diverse supplier base is considered in the public interest. And part of that effort includes giving special extra help to those who are perceived most in need — small businesses, women-owned small businesses, minority-owned small businesses, veteran-owned small businesses, etc.

Sole-Source Contracts

Earlier this month, the Small Business Administration of America has announced that they are looking to ease the rules on sole-source contracts for WOSBs and EDWOSBs to make it easier for them to get federal contracts. Sole-source contracts are a way to circumvent the bidding process by awarding a contract to a company without a bid. WOSBs and EDWOSBs were not allowed to receive sole-source contracts. This might be changing.

Of course, this doesn’t mean that a contract can be awarded without any considerations. There are some serious and worthy stipulations in the process, including:

• The expectation that only one WOSB or EDWOSB will submit a bid. If there are more, the bidding process will continue normally.
• The contracting officer finds the price to be fair.
• The contracting officer has reason to believe that the firm awarded the bid is qualified and competent.
• The work won’t exceed $6.5 million for manufacturing, or $4 million for anything else; and, most importantly
• They are properly certified, licensed, and bonded.

Certifications have been the bane of the program. For years, firms were allowed to self-certify, which led to widespread fraud. The federal government and the SBA are working to make sure that any firm receiving a bid is certified. In our next article, we’ll talk about that process and why it is important.

All that being said, you still need to be properly bonded to get work. The playing field can only be level when everyone is playing by the rules, and the doors are opening only to let in the responsible firms. Obtaining payment and performance bonds from a trusted surety provider can help make you the recipient of a sole-source contract with the federal government and get your WOSB in the door.

Getting the contract requires the backing of a strong Surety company with a reputation you can depend on. Contact Surety1 today for a quick and fair bonding process that’ll get you to work.