The Small Business Administration (SBA) “temporarily suspended” new 8(a) application submissions after a July ruling from the Eastern District of Tennessee. The SBA’s website alerts the public that new 8(a) application submissions under the Business Development Program are currently suspended while it revises the application questionnaire to comply with the court’s decision.
The SBA’s 8(a) Business Development Program helps firms owned and controlled by economically disadvantaged individuals. Businesses in the program receive training and technical assistance to help strengthen their ability to compete with other businesses. The federal government aims to award at least 5% of all federal contracts to small disadvantaged businesses each year.
After the U.S. Supreme Court recently struck down affirmative action in college admissions, a Tennessee federal court enjoined the SBA “from using the rebuttable presumption of social disadvantage” when administering the 8(a) program.
One of the qualifications of the 8(a) program is that the business is “at least 51% owned and controlled by U.S. citizens who are socially and economically disadvantaged.” Previously, the SBA presumed that certain groups, including Black and Hispanic Americans, were socially disadvantaged and met this criteria. However, this presumption is now prohibited under the Tennessee federal court ruling. The SBA has paused new applications for the program while it revises the application questionnaire to come into compliance with the new ruling. It is not yet clear how long the suspension will last.
For more information or guidance on how this may affect your business, contact Lauren Travis, Senior Counsel in our Government Contracts practice area at General Counsel, P.C., 703-556-0411.