This week, the SBA published a press release affirming its continued support of its 8(a) Business Development Program in response to recent 8(a) Program attacks in the courts. In the press release, business industry leaders across the nation joined SBA Administrator, Isabella Casillas Guzman, in praising the 8(a) Program, its successful history, and its driving policy and spirit.
If you are not up to speed on the recent 8(a) Program happenings, take a look through the recent 8(a) articles collected in our 8(a) Contractors’ Toolkit for more information. But in a nutshell, there was a recent federal district court decision in Ultima Servs. Corp. v. U.S. Dep’t of Agric. that enjoined the SBA from applying a rebuttable presumption of social disadvantage based on membership in a marginalized racial or ethnic group, which you can read about here. Since that decision, the 8(a) Program has been experiencing some interruptions, as well as some monumental changes.
For a period of time, all new applications were paused. And many applicants and participants were nothing short of panicked as to what was going to happen to this wonderful program and their participation in it. Since then, SBA’s 8(a) Program certification portal, certify.sba.gov, has been reopened, and 8(a) Business Opportunity Specialists across the country have been working with current participants to maintain their eligibility generally and for pending 8(a) awards. SBA is now requiring all new applicants and all existing 8(a) Program participants to draft a detailed narrative to demonstrate its compliance with the social disadvantage requirement–just one of the numerous 8(a) Program eligibility rules.
So, since SBA has now implemented official changes removing any type of race- or ethnicity-based presumption of social disadvantage for individuals applying to and already in the 8(a) Program, you may be thinking that should have ended the 8(a) Program attacks. And frankly, you would not be alone in that thought. But unfortunately, such is not the case.
Claiming to be “still suffering from the lingering effects of defendants’ discrimination[,]” the plaintiff in Ultima has now also asked the court to enjoin the use of the 8(a) Program in the administrative and technical support industry altogether. The motion notes that the plaintiff does not agree with the SBA’s “interpretation of the existing injunction.” But it didn’t stop there. The plaintiff also asked the court: (i) to halt all 8(a) contract options and similar modifications for those who were previously presumed disadvantaged; (ii) to stop SBA from providing any kind of shortened or “less rigorous” narrative reviews at this time; (iii) to appoint someone to review SBA’s narrative reviews or to simply make public these extremely-personal and often-painful narratives, instead; and (iv) to enjoin all actions on 8(a) contracts with any participants previously presumed socially disadvantaged–whether they have an SBA-approved narrative in place now or not.
All this to say, the SBA’s recent press release could not have come a more crucial time for the 8(a) Program, which it notes is “the federal government’s premier business development program helping socially and economically disadvantaged small business owners expand their footprint in the federal marketplace through training and contract support.”
The press release begins with a powerful statement from SBA Administrator Guzman, noting the recent court injunction and order and reassuring the nation that the 8(a) Program is still “open for business.” Since the injunction, Guzman says, “SBA has reviewed or recertified thousands of current 8(a) participants through a process consistent with the court’s order[,]” and has now “reopened the 8(a) application portal to new participants – ensuring a vast, talented pool of vendors are available to federal agencies.” Guzman also notes the 8(a)’s successful history of fulfilling a crucial role in government contracting. In her words:
The SBA’s 8(a) Program has more than a 50-year track record of making contracting with the U.S. government more accessible for thousands of small businesses who in turn provide critical products and services to advance agency missions. Leveling the playing field not only provides entrepreneurs from historically underserved communities the opportunity to grow their businesses, create jobs, and contribute to their local economies – it is also crucial to enhancing performance across our federal government.
Finally, Guzman eloquently expresses her faith in the 8(a) Program’s future and driving policy, stating:
As we await a final ruling, the SBA and Biden-Harris Administration remains committed to supporting the 8(a) Program and standing up for the small business owners who have helped drive America’s historic economic growth. We will not let attacks from those who seek to take us backward chill our efforts to promote equity, expand access to the American Dream, and ultimately strengthen our country’s industrial base.
Guzman’s statements alone provide hope and reassurance in response to the recent judicial attacks on the 8(a) Program. But the press release also quotes several business industry leaders in support of the program. One such leader, Chris James, President and CEO of The National Center for American Indian Enterprise Development, calls the 8(a) Program “one of the federal government’s most effective tools for establishing and growing minority-owned businesses,” and says the following:
I have witnessed its impact firsthand, both as a former SBA official and as the leader of an organization that has worked with countless 8(a) companies at all stages of their development. I applaud the SBA and Administrator Guzman for their unyielding support for the 8(a) Program and look forward to working with them to ensure minority-owned businesses have access to resources that will help them succeed.
And another leader, Justin Nelson, Co-Founder and President of the National Gay and Lesbian Chamber of Commerce (NGLCC), exclaims his pleasure in seeing the reopening of the 8(a) Program to new applications. He says:
This represents a significant opportunity for the diverse business community to thrive and succeed. The NGLCC looks forward to working closely with the Small Business Administration to ensure that LGBTQ and other diverse-owned businesses that have faced discrimination in their entrepreneurial journey can share their experiences and be a part of the program. The 8(a) Program is not just about federal contracting and training; it’s about empowering socially and economically disadvantaged small business owners to reach their full potential and contribute to a more inclusive, prosperous economy.
In addition, the press release provides moving statements from leaders in the Native Hawaiian Organizations Association, the National Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship, and additional groups promoting racial and ethnic diversity in industry, as well as the Board for Women Impacting Public Policy and other women leadership groups. In essence, each leader expresses what the 8(a) Program has done for them and their communities, explaining how the 8(a) Program has helped so many overcome the systematic barriers and inequalities that plague these groups of people.
The leaders also seem to align on the widespread benefits the 8(a) Program’s promotion of diversity in the marketplace has provided for our nation as a whole. Ramiro Cavazos, President and CEO of the United States Hispanic Chamber of Commerce, says, “over five million Hispanic-owned businesses . . . contribute over $800 million to our nation’s economy every year[,]” and “[t]heir innovation and resilience drive America’s economy.” Rhett Buttle, President of the Public Private Strategies Institute, says, “[t]he program has and will continue to help entrepreneurs access the American dream to start small businesses which are the backbone of our economy.” Shaundell Newsome, Co-Chair of Small Business for America’s Future, says, “[s]mall businesses can face extra challenges and need a level playing field[,]” and the 8(a) Program “can help them thrive which in turn will bolster our economy[.]” And Chrystel Cornelius, President and CEO of the Oweesta Corporation, reminds us all of “the importance of Native entrepreneurs and small businesses in accessing significant federal contracting opportunities in supporting and building Native economies and economic sovereignty.”
Finally, the press release concludes with the following statement, as well as the reiteration that the 8(a) Program remains “open for business”:
In 2021, President Biden set an overall goal of awarding 15 percent of federal prime contracting to small disadvantaged businesses by fiscal year 2025, representing a 50 percent increase in spending on these businesses from when he first took office. The 8(a) Program has helped achieve historic progress toward this goal – under President Biden, federal agencies have achieved record levels of spending on contracts with small businesses overall, and with small disadvantaged businesses specifically. The federal government’s small business prime contracting program supported the creation of 727,800 jobs nationwide in fiscal year 2022 alone.
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We at SmallGovCon are keeping a close eye on the current 8(a) Program legal landscape, and we will update our readers as this matter develops further. We–like Guzman and many of the leaders quoted in the press release–feel the 8(a) Program has provided crucial opportunities for our disadvantaged business owners nationwide. And we hope to see the program continue to thrive despite the recent attacks. In the well-put words of industry leader Ying McGuire, President and CEO of the National Minority Supplier Development Council, SBA’s 8(a) Program has been and continues to be “a long-time instrument of economic equity for minority business enterprises[.]”
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