Groundhog Day is Here: SBA OHA Shoots Down Another 8(a) Program Rejection

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.

SBA OHA’s decision in Mill Mike Manufacturing Corp., SBA No. BDPE-476 (2013) involved the 8(a) application of Mill Mike Manufacturing Corporation.  Mill Mike sought admission to the program on the basis that its owner, Tamyra Valentine, had experienced chronic and substantial social disadvantage as a result of gender bias.

The SBA denied Mill Mike’s application on the basis that Ms. Valentine had not established her social disadvantage by a preponderance of the evidence, and denied Mill Mike’s request for reconsideration for the same reason.  Mill Mike then filed an 8(a) appeal with SBA OHA.

SBA OHA determined that the SBA had made two critical errors in evaluating Mill Mike’s application.

First, the SBA “errs by failing to articulate any rationale for dismissing many” of Ms. Valentine’s claims.  Rather, the SBA used the “same two-sentence justification” to reject several incidents recounted by Ms. Valentine.  SBA OHA found that these vague rejections failed to meet the SBA’s burden of explaining why it chose not to believe Ms. Valentine’s claims.

Second, SBA OHA found that both the initial denial and the denial on reconsideration “ignore the majority of the claims raised” by Ms. Valentine.  SBA OHA listed eight separate incidents recounted by Ms. Valentine but not mentioned anywhere in the denial letters.  The SBA “is not free to pick and choose what claims deserve its attention; it must provide reasoned analysis for them all,” SBA OHA wrote.

SBA OHA granted Mill Mike’s 8(a) appeal and remanded the matter to the SBA for further consideration of Mill Mike’s 8(a) application.

As the SBA OHA 8(a) decisions pile up–that’s six and counting since December–I have to wonder what, if anything, the SBA is doing to fix the fundamental problems SBA OHA continues to point out.  For many disadvantaged contractors, 8(a) certification is an essential ingredient in building a successful government contracting business, and every 8(a) applicant deserves a fair shake without the need to appeal to SBA OHA.  Right now, it seems, many applicants aren’t getting one.

One thought on “Groundhog Day is Here: SBA OHA Shoots Down Another 8(a) Program Rejection

  1. It would be interesting to find out how many of the rejected 8(a) applications are prepared by paid firms and how many are prepared by individuals themselves. I intuitively think there is a bias in favor of paid preparers, but I do not have any empirical evidence to support that assumption.

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