By: Matthew Lewis on July 11th, 2022
Do You Qualify as an Economically Disadvantaged Women Owned Small Business?
Government Business Development | 5 Min Read
The Small Business Administration (SBA) has several contracting assistance programs to help small businesses win a fair share of the federal government's dollars. These types of programs allow for small businesses with a GSA Schedule to be more competitive in the world of government contracting. One of these programs is the Economically Disadvantaged Women Owned Small Business (EDWOSB). With this business designation, your company has greater access to specific contracting opportunities and programs that are designed to help you succeed in the federal marketplace. We’ll cover what a EDWOSB is and if your company qualifies so you can take advantage of these contracting assistance programs.
What is an Economically Disadvantaged Women-Owned Small Business (EDWOSB)?
Some contractors want to know the difference between Women-Owned Small Businesses (WOSBs) and Economically Disadvantaged Women Owned Small Businesses (EDWOSBs). An EDWOSB is a small business concern that is at least 51% owned by one or more women and is considered economically disadvantaged. If you qualify as an EDWOSB, you automatically qualify for the Women-Owned Small Business Program (WOSB). However, if you qualify as a WOSB first, you do not automatically qualify as an EDWOSB. The WOSB casts a wider net than the EDWOSB. The EDWOSB certification is very similar to WOSB program, however, it does have a few distinctions, which we’ll cover below.
Both of these programs are very beneficial for small business GSA Schedule contractors, because they qualify your company for specific set-asides, which are contracts set aside specifically for small businesses. If a GSA contractor is able to qualify as a WOSB or EDWOSB, they will have a direct track to access some of these set-aside contracts.
Do I Qualify as an Economically Disadvantaged Women-Owned Small Business (EDWOSB)?
Like a Women-Owned Small Business, in order to be considered an EDWOSB, women must control at least 51% of the company, but to be considered EDWOSB, they must also be economically disadvantaged. This economically disadvantaged woman must, like in Women-Owned Small Businesses, make day to day decisions and long term, strategic decisions.
To be considered economically disadvantaged, you must meet certain requirements for personal net worth, adjusted gross income, and fair market value of all your assets. Looking more closely at what it is to be considered economically disadvantaged, you must have a personal net worth less than $750,000, your adjusted gross income per year averaged over the last three years prior to certification may not go above $350,000, and the fair market value of all your assets cannot surpass $6 million.
If you are wondering whether you qualify as a small business at all, you can use the size standards tool on SBA’s site. Business size is measured by your primary North American Industry Classification (NAICS) code and a few other factors which the tool will guide you through.
If you meet all these requirements, then you can get certified as an Economically Disadvantaged Women-Owned Small Business.
How to Certify as an EDWOSB
As of July 2020, the certification process has changed and you will no longer be able to self-certify as an EDWOSB. If you are a new applicant, you will need to fill out the following information on your certify.sba.gov account:
- SAM.gov registration information
- Proof of U.S. Citizenship for the female owner(s)
- Other business related documentation
- Joint Venture agreements (if applicable)
You can also be certified through an SBA approved third party certifier, but you will need to file this on the certify.sba.gov portal. There are four organizations approved by the SBA for third-party certification:
- El Paso Hispanic Chamber of Commerce
- National Women Business Owners Corporation
- US Women’s Chamber of Commerce
- Women’s Business Enterprise National Council
To learn more about the new certification process, visit our blog, "What You Need to Know About the Changes the SBA is Making to the WOSB Program."
The Advantages of Certifying as a Small Business
These two programs (WOSB and EDWOSB) share a goal of helping women acquire government contracts and have ample opportunities in the government market. Ultimately, it is the federal government’s goal to award at least 5% of all federal contracting to Women-Owned Small Businesses each year. This is a significant figure considering the U.S. government is the largest buyer of goods and services in the entire world.
By allotting this amount each year to WOSB and EDWOSB’s, the federal government helps provide a more level playing field for women business owners, and limits competition for certain contracts to businesses that participate in the Women-Owned Small Business Federal Contracting program. While there are contracts that are reserved for Women-Owned Small Businesses, there are even more contracts that are restricted further to Economically Disadvantaged Women-Owned Small Businesses. On the opposite spectrum, you will also be able to go after opportunities for simply just small businesses.
Although many women are aware that they can qualify for a WOSB, some are unaware of the economically disadvantaged qualification that they meet as well. Because of this, many businesses that would qualify for EDWOSB have not applied, and therefore, the competition pool for those who do have the certification is smaller.
As an EDWOSB, you will be able to compete in both small business set aside contracts and sole source contracts, so you will have plenty of contracting opportunities available to you with this designation.
You will also be able to form Joint Venture partnerships with established government contractors or team-up with other businesses through a Contractor Teaming Arrangement (CTA).
If you believe you meet these qualifications, you should consider applying to the EDWOSB Program. There is no risk in applying for this certification. If you are rejected, then you continue with your contracting business as usual.
Do You Want to Learn More About Other Benefits for Small Businesses?
Each year, the federal government sets aside over $100 billion for small businesses, and one of their annual goals is to award at large amount of federal contract dollars to Women-Owned Small Businesses. As a small business GSA Schedule contractor, you have several tools, platforms, and contract opportunities available to you and you should take advantage of them. Having an understanding of these set-aside opportunities can help you as a small business, particularly a WOSB or EDWOSB, to maximize your full potential as a seller in the federal contract space. To learn more about how you can leverage your GSA Schedule as a small business, check out "How to Succeed as a Small Business Through a GSA Schedule."