Author: laura long

The Small Business Administration (SBA) has expanded its review of socio-economic contracting programs to include the Economically Disadvantaged Women-Owned Small Business (EDWOSB) program. (Federal News Network June 12, 2026)

Earlier this week, SBA emailed EDWOSB participants and requested that they complete a survey and submit personal and business tax returns for the past three years by June 30. (ibid)

In the email, SBA explained the purpose of the review:

“Pursuant to 13 C.F.R. § 127.400, SBA is conducting a program examination to verify that your firm continues to meet the requirements of the Economically Disadvantaged Women-Owned Small Business (EDWOSB) program,” wrote the agency’s compliance division within the Office of Government Contracting and Business Development. “Specifically, SBA will be verifying that your firm continues to meet the requirement that the woman or women that own at least 51% of the firm are economically disadvantaged, as set forth in 13 CFR 127.203.” (ibid)

Similarities to the 8(a) Program Audit

This review follows SBA’s recent audit of the 8(a) Business Development Program.

In December, SBA requested information from more than 4,300 8(a) firms, including employee lists, bank statements from the previous three fiscal years, and copies of all 8(a) contracts. As a result of that review, SBA suspended more than 1,100 firms and ultimately terminated 154 companies from the program. (ibid)

SBA Proposes Changes to 8(a) Eligibility Requirements

SBA continues to revise the 8(a) Business Development Program. The agency recently released a proposed rule that would change how individuals qualify for the program.

Under the proposal:

“SBA says ‘individuals will no longer be considered” “socially disadvantaged,” and therefore eligible for the 8(a) program, simply because they are a member of a racial minority group. Likewise, no individual may be barred from the 8(a) program simply because they are white. Instead, all applicants will be required to prove their social disadvantage status by submitting verifiable, fact-based evidence.’” (ibid)

The proposed changes would apply only to individually owned firms. SBA would not change eligibility standards for businesses owned by Indian tribes, Alaska Native Corporations (ANCs), Native Hawaiian Organizations (NHOs), or Community Development Corporations (CDCs). (ibid)

Current individually owned 8(a) participants would not be affected. (ibid)

Comments on the proposed rule are due by July 13.

Reactions to the Proposed Rule

Sen. Ed Markey (D-Mass.), ranking member of the Senate Small Business and Entrepreneurship Committee, criticized the proposal. (ibid)

“The SBA’s proposed rule grossly diminishes the history of systemic racial and ethnic discrimination in the United States. Congress created the 8(a) Business Development Program nearly half a century ago to provide entrepreneurs who have faced historic and present-day discrimination with opportunities to partner with the federal government and support to help grow their businesses,” Markey said. (ibid)

“To be clear, the 8(a) program has always been open to anyone that can prove they’ve experienced prejudice or cultural bias, including in education, employment and entrepreneurship. Now, the SBA proposes to define discrimination based on its political whims and allow applicants to self-certify their eligibility. Instead of fighting to right historic wrongs and enable more job creators to grow and thrive, this administration is once again choosing to distort reality to perpetuate its hateful — and harmful — agenda.” (ibid)

Shane McCall, partner at Koprince McCall Pottroff, noted that SBA’s proposal builds on the 2023 Ultima decision. (ibid)

“However, the proposed rule includes a big change in standards for social disadvantage that mostly stem from racial quotas from government or private entities,” McCall said. (ibid)

“Examples include ‘unlawful diversity, equity, and inclusion programs or policies; unlawful affirmative action programs or policies; race-based quotas, set-asides, or hiring targets; or, any government or private entity policies or programs that favored some groups over others on the basis of race.’ We also need to know how SBA will apply these rules.” (ibid)

Questions About the EDWOSB Audit Process

Industry participants have raised concerns about the audit process.

One executive, who requested anonymity, said the review seemed unexpected because the company had recently renewed its certification and remained certified for another three years. (ibid)

The executive also questioned SBA’s use of SurveyMonkey to collect sensitive financial information, including:

• Cash balances in savings and checking accounts
• Retirement account information
• Stock, bond, and mutual fund holdings
• Life insurance policies with cash surrender value
• Home ownership, mortgage balances, and property values (ibid)

The survey also asks:

• Has the Qualifying Owner transferred any assets to any immediate family member for less than fair market value in the last two years?

• Do you have any retirement accounts? And if so, provide a list and how much money is in each account.

• Do you have any stocks, bonds or mutual funds? And if so, provide a list, a corresponding number of shares you own and total dollar value for each.

• Do you have a life insurance policy that has a cash surrender value?

• Do you own your primary residence? If so, what is the mortgage of your residence and what is the current value of your residence? (ibid)

The executive said:

“It makes me wonder how much time and effort has been put into this and makes me question the credibility of whatever results we are provided post-evaluation. Will the SBA feed my data into an algorithm or artificial intelligence to determine program eligibility? Or will a human evaluate? Are they comparing our new information with the information provided at application? Or is this a separate examination completely?” (ibid)

SBA did not respond to requests for comment.

Growth of the Women-Owned Small Business Program

The Women-Owned Small Business (WOSB) program has grown significantly during the last decade.

Federal data shows:

• 1,410 new WOSB firms entered the federal market in fiscal 2023.
• 1,183 entered in 2022.
• 1,276 entered in 2021. (ibid)

Although agencies failed to meet the governmentwide 5% contracting goal between 2020 and 2024, contract dollars awarded to WOSBs increased substantially. (ibid)

According to SBA’s June 2025 procurement scorecard:

• Agencies awarded a record $31.7 billion to WOSBs in fiscal 2024.
• Agencies awarded $27.1 billion in fiscal 2020.(ibid)

Leadership Connect reports that contracting activity with EDWOSBs has declined so far in fiscal 2026:

• 17 awards totaling $2.3 million during the first eight months of FY 2026.
• 35 awards totaling $8.7 million during the same period in FY 2024.
• 29 awards totaling $4.7 million during the same period in FY 2025. (ibid)

Certification and Audit Outcomes

Concerns about program abuse prompted SBA to strengthen certification requirements in 2020. The agency now requires firms to obtain certification through SBA’s online platform or an approved third-party certifier and to recertify every three years. (ibid)

SBA identified two possible outcomes for the current audit:

Continued Certification

“If SBA determines that the firm continues to meet program eligibility requirements, SBA will provide a written notice of continued certification in your firm’s record within MySBA Certifications, and the firm will maintain its certified EDWOSB status in SBS.” (ibid)

Proposed Decertification

“If you fail to submit your program examination response within the required timeframe or SBA determines the firm no longer meets program eligibility requirements, SBA will notify you that your firm has been proposed for decertification from the EDWOSB program in accordance with 13 CFR 127.405.”

The notice will explain the reasons for proposed decertification and require a written response within 20 calendar days. SBA may draw adverse conclusions if a firm fails to cooperate or provide requested information. (ibid)

SBA also stated that firms may voluntarily withdraw from the program before the audit concludes.

McCall summarized the significance of the review:

“While I’ve seen nothing official, it appears that SBA is auditing the economic disadvantage for all EDWOSB participants. This means those companies will have to provide backup documentation showing they meet the EDWOSB economic disadvantage requirements. Those rules are basically the same as the 8(a) economic rules. So, this could represent a shift towards more scrutiny on the EDWOSB program, similar to the 8(a) program.” (ibid)

Legislative Efforts to End the Program

The audit comes as some lawmakers seek to eliminate the Women-Owned Small Business program entirely.

In April, Sen. Mike Lee (R-Utah) and Rep. Glenn Grothman (R-Wis.) introduced the Ending Discrimination in Government Contracting Act. The legislation would eliminate contracting preferences for women-owned and socially and economically disadvantaged businesses. (ibid)

Neither bill has advanced beyond committee review. (ibid)