More recently Congress has advanced legislation aimed at tightening the rules around how Women-Owned Small Businesses (WOSBs) are counted toward federal contracting goals. H.R. 1816, known as the WOSB Accountability Act, represents a significant shift in how the federal government tracks and verifies WOSBs—and how these businesses qualify for a key slice of federal contract dollars.
The bill addresses a long-standing issue: under current rules, women-owned businesses can self-certify their WOSB status in federal contracting databases without going through any formal verification process. The government states that this has opened the door to potential abuse and misrepresentation, undermining the government’s goal of awarding at least 5% of all federal contracting dollars to certified women-owned small businesses.
If passed into law, the WOSB Accountability Act would close this loophole by requiring that only WOSBs certified by the Small Business Administration (SBA), or by a third party approved by the SBA, are counted toward these contracting goals. Self-certification would no longer be accepted as valid once the new rules take effect.
The SBA would have one year from the bill’s enactment to issue regulations that define the updated certification process. After those regulations are finalized, there will be a two-year transition period. At the end of that period, agencies will no longer be permitted to count self-certified WOSBs toward their women-owned business contracting targets. This phased approach gives businesses time to comply while ensuring a clear and firm deadline.
To support businesses during this transition, the bill includes a temporary safeguard: any WOSB that submits a complete application for certification before the new requirement takes effect will be considered “certified” during the application review period. This prevents delays in processing from unfairly penalizing legitimate applicants.
The WOSB Accountability Act also focuses on transparency and oversight. The SBA will be required to submit quarterly reports to Congress beginning 60 days after the law is enacted. These reports must include data on the number of certification applications received, approvals and denials, processing times, program costs, outreach efforts, and any legislative or funding recommendations. This level of oversight is designed to keep the process moving efficiently and to help Congress respond to any challenges or bottlenecks.
Notably, the bill does not authorize any additional funding for these efforts. The SBA must implement the new requirements using its current budget, which may present administrative challenges as the volume of certification applications increases.
Supporters of the bill argue that the current self-certification option undermines the integrity of the WOSB program and puts legitimate women-owned businesses at a disadvantage. Supporters’ further states, “that by requiring formal certification, the bill aims to restore trust in the system and ensure that federal contracting dollars are going to the businesses that truly qualify. The consistent failure of the federal government to meet its 5% WOSB goal further underscores the need for reform.”
Introduced by Rep. Nydia Velázquez (D-NY), H.R. 1816 received bipartisan support in the House, passing by voice vote on June 3, 2025. It is now under consideration in the Senate, where it has been referred to the Committee on Small Business and Entrepreneurship.
If enacted, the WOSB Accountability Act will mark a turning point in federal contracting, reinforcing standards, improving accountability, and leveling the playing field for women entrepreneurs. For small businesses seeking to do business with the federal government, the message is clear: get certified, stay compliant, and be ready for new opportunities in a more transparent and trusted system.
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