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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SBA Revises 8(a) JV Regulation–But Confusion Remains

Stating that populated joint ventures have now been eliminated, the SBA has revised its 8(a) joint venture regulations to reflect that change.

In a technical correction published today in the Federal Register, the SBA flatly states that an earlier major rulemaking eliminated populated joint venture, and tweaks the profit-sharing piece of its 8(a) joint venture regulation to remove an outdated reference to populated joint ventures.  But even following this technical correction, there are three important points of potential confusion that remain (at least in my mind) regarding the SBA’s new joint venture regulations.

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8(a) Program: SBA Final Rule Makes Important Changes

The 8(a) Program regulations will undergo some significant changes as part of the major final rule recently released by the SBA, and effective August 24, 2016.

Here at SmallGovCon, we’ve already covered big changes to the SDVOSB Program and HUBZone Program brought about by the new SBA rule.  But the 8(a) program is affected by the new rule too, and important changes involving eligibility, the application process, sole source awards, NHOs, and more will kick in later this month.

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Large DoD 8(a) Sole Source Contracts Have Dropped By 86.5%

The number of 8(a) sole source contracts over $20 million awarded by the DoD has been “steadily declining since 2011,” when a new requirement was adopted requiring agencies to prepare written justifications of such awards.

According to a recent GAO report, such awards have dropped more than 86% compared to the period before the justification requirement took effect.  The report states that much of the work that was previously awarded on a sole source basis has now been competed.

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SBA Didn’t Properly Justify 8(a) Termination, Says Court

SBA’s regulations provide that an 8(a) program participant that no longer is owned or controlled by socially and economically disadvantaged person can be terminated from the 8(a) program. But the decision to terminate is not one to be made lightly: SBA must make sure that it not only has evidence in support of its termination decision, it must also explain how that evidence demonstrates its conclusions.

This requirement was at issue in a recent court decision that found an SBA 8(a) program termination decision to be based on “numerous erroneous assumptions” and “unsupported conclusions, not substantial evidence.”

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