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.
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.
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.
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.
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.
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.
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.