5 Things You Should Know: SBA’s 8(a) Business Development Program (The Basics)

If you’re a small business owner interested in government contracts, you’ve probably heard about the SBA’s 8(a) Business Development Program. The 8(a) Program itself is complex, but its potential benefits are tremendous. In this post, I’ll break down some of the very basics about the 8(a) Program, leaving some of its complexities for upcoming posts.

Let’s get to it: here are five things you should know about the 8(a) Program.

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Supreme Court Declines to Hear Case: 8(a) Program Survives Constitutional Challenge

In a big victory for proponents of the 8(a) program, the Supreme Court of the United States has denied the Petition for Certiorari filed by Rothe Development, Inc.

Consequently, the decision of the Court of Appeals for the D.C. Circuit finding the statutes establishing 8(a) program to be constitutional will be allowed to stand.

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8(a) Program: Loan Must Be “Bona Fide” To Reduce Net Worth

To qualify for the 8(a) program, a disadvantaged individual must fall below certain personal net worth thresholds. Loans can reduce net worth–but not all loans are treated the same.

According to the SBA Office of Hearings and Appeals, if a disadvantaged individual intends to rely on a loan to reduce net worth, the loan better be bona fide.

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Recent SBA OIG Report Reveals Continuing Concerns With 8(a) Approvals

To be eligible to participate in the 8(a) Business Development Program, an applicant firm must be a small business that is at least 51% owned and controlled by a socially- and economically-disadvantaged individual (or individuals) who are of good character and citizen(s) of the United States. The firm, moreover, must show a potential for success.

The Small Business Administration’s internal watchdog (the Office of Inspector General, or OIG) recently raised its continuing concerns regarding the admission of several entities to the 8(a) Program. The OIG’s report is worth reading, as it may lead to changes in the 8(a) Program’s eligibility criteria.

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8(a) Program: Will Supreme Court Take Rothe’s Constitutionality Case?

The continuing legal battle over the constitutionality of the 8(a) program’s “socially disadvantaged” criteria may be on its way to the Supreme Court of the United States.

Last September, we covered the decision of the United States Court of Appeals for the D.C. Circuit in Rothe Development, Inc. v. United States Department of Defense, 836 F.3d 57 (D.C. Cir. 2016), where a two-judge majority of the court concluded the 8(a) program did not violate Rothe’s equal protection rights under the Due Process Clause of the Fifth Amendment by establishing a racial classification.

Now, Rothe has filed a Petition for Writ of Certiorari—a formal request that the Supreme Court review (and overturn) the D.C. Circuit’s decision.

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Thank You, 8(a)s!

I am back in Kansas, where it is a balmy 39 degrees, after a great trip to Orlando for the National 8(a) Association Small Business Conference.

The weather in Florida was “for real” balmy, as my kids might say–but as tempting as the sunny outdoors was, the convention hall was packed with representatives from 8(a) companies, large primes, government agencies, and others.  You know a conference has great content–and great networking–when attendees voluntarily choose the lecture hall over a nearby sun-drenched pool.

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8(a) Sole Source Decision: “Bad Faith” Bid Protest An Uphill Battle

An agency’s decision to award a contract as an 8(a) sole source is a “business decision” for which the agency has broad discretion–and a potential protester challenging the agency’s use of that discretion will have an uphill battle.

In a recent bid protest decision, the GAO confirmed that government officials are presumed to act in good faith, and that the presumption extends to the decision to award an 8(a) sole source contract instead of competing the work in question.

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