Does my business qualify for favorable treatment in federal contracting as a Women-Owned Small Business?

Federal law authorizes procurement mechanisms to permit Women-Owned Small Businesses (“WOSBs”) to have an equal opportunity to participate in federal contracting. To qualify as a WOSB, a concern must be (1) a “small business,” and (2) at least 51% unconditionally and directly owned and controlled by one or more women who are U.S. citizens. What is a “small business” is determined by the U.S. Small Business Administration using size standards tied to the economic industry in which the contract is sought. For the second part of the test, ownership is determined without regard to community property laws. To be “unconditional,” the women’s ownership cannot be subject to voting trusts or any other arrangements that cause ownership benefits to go to another, except that the women may pledge or encumber their ownership interests in a normal commercial transaction. To be “direct,” the women’s 51% ownership generally may not be through another business entity or a trust, even if the other entity is owned and controlled by women. “Control” requires that both the long-term decision making and the day-to-day management of the business be conducted by one or more women. In particular, a woman must hold the highest officer position, have sufficient managerial experience to run the concern, and manage the business full-time. In a corporation, women must also control the board of directors. For more information, see our article on What It Takes To Qualify as a Women-Owned Small Business (WOSB).