Last month, I wrote about the successful 8(a) program appeal filed by Gearhart Construction Services.  In its decision, SBA OHA held that the SBA had misevaluated Gearhart on the “social disadvantage” factor, including by holding Gearhart to a too-high standard of proof.  SBA OHA ordered the SBA to correct its errors and take another look at Gearhart’s application.

Now I can report that Gearhart’s story has a happy ending.  On April 11, the SBA notified Gearhart that it had been admitted to the 8(a) program.  SBA OHA then dismissed Gearhart’s appeal as moot, because Gearhart and achieved its goal.

Sometimes, gaining admission to the 8(a) program requires tenacity and a continued belief in one’s case, even when the SBA’s 8(a) office has repeatedly denied the application.  Gearhart’s perseverance paid off, and the company now has nine years to reap the rewards.

In the 1990s comedy Groundhog Day, Bill Murray played a weatherman who found himself living the same day over and over again.  I am having the same feeling reading SBA Office of Hearings and Appeals cases these days (yes, this is what qualifies as my reading material of choice; don’t judge).

As it has at least five other times since December, SBA OHA has shot down the SBA’s rejection of an 8(a) application under the “social disadvantage” factor.  As was the case in several other recent decisions, the latest volley from SBA OHA states that the SBA failed to properly consider the evidence and explain its rationale for denying an 8(a) applicant.

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The SBA’s Office of Hearings and Appeals has overturned yet another SBA 8(a) Program denial decision–at least the fifth such instance since December 2012.

As with the four previous cases, SBA OHA’s most recent 8(a) appeal decision indicates that the SBA improperly evaluated the applicant’s evidence of social disadvantage, both by misapplying the regulatory test for social disadvantage and by requiring the applicant to meet a higher standard of proof than called for by law.

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For the third time in as many months, the SBA Office of Hearings and Appeals has ruled that the SBA erroneously evaluated an 8(a) applicant’s evidence of social disadvantage.

In Innovet, Inc., SBA No. BDPE-466 (2013), SBA OHA held that the SBA’s evaluation of a disabled veteran’s 8(a) application was flawed because the SBA relied on broad, conclusory statements, failed to consider all of the veteran’s evidence of social disadvantage, and made conclusions contrary to the evidence in the record.

The Innovet case is part of a heartening trend of recent SBA OHA decisions holding that 8(a) evaluations must be fair, reasonable and thorough.  The case also highlights that the SBA continues to make flawed analyses of social disadvantage, potentially preventing some eligible companies from obtaining 8(a) certification. Continue reading →