8(a) Business Development Program Archives | FedScoop https://fedscoop.com/tag/8a-business-development-program/ FedScoop delivers up-to-the-minute breaking government tech news and is the government IT community's platform for education and collaboration through news, events, radio and TV. FedScoop engages top leaders from the White House, federal agencies, academia and the tech industry both online and in person to discuss ways technology can improve government, and to exchange best practices and identify how to achieve common goals. Wed, 08 Nov 2023 15:05:09 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.4 https://fedscoop.com/wp-content/uploads/sites/5/2023/01/cropped-fs_favicon-3.png?w=32 8(a) Business Development Program Archives | FedScoop https://fedscoop.com/tag/8a-business-development-program/ 32 32 U.S. urges judge to deny Ultima’s request for an industry-specific SBA 8(a) injunction https://fedscoop.com/u-s-urges-judge-to-deny-ultimas-request-for-an-industry-specific-sba-8a-injunction/ Sat, 30 Sep 2023 00:51:08 +0000 https://fedscoop.com/?p=73266 A federal contractor’s request for additional relief would prevent all federal agencies from using the Small Business Administration’s 8(a) program in three of its largest industries, the government said.

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The government asked a federal judge to deny a request by a federal contractor to extend the court’s injunction of the Small Business Administration’s 8(a) program assisting disadvantaged businesses to a specific industry.

“There is no basis in the Court’s order or federal law for such relief,” the Justice Department, which represents SBA and the Department of Agriculture, said of the requested injunction for the administrative and technical support industry.

The DOJ also called other remedies requested by Ultima to appoint a monitor to SBA’s certification of 8(a) participants and enjoin SBA’s ongoing efforts to comply with the court’s order “drastic” and “extraordinary.”

The Friday memo filed in the U.S. District Court for the Eastern District of Tennessee is a response to Ultima Services Corp.’s request for relief beyond an injunction that prevents the SBA from using a “rebuttable presumption” of social disadvantage in the 8(a) program aimed at broadening the pool of federal government contractors.

The rebuttable presumption made it easier for businesses owned by people belonging to certain racial and ethnic groups to qualify for the social disadvantage requirement of the program. But in July, the court ruled that the presumption violated Ultima’s right to equal protection. The decision cited the Supreme Court’s decision striking down the use of race in college admissions, which came less than a month before.

Earlier this month, Ultima requested that the court go further. Among its requests, it asked the court to bar the use of the 8(a) program in the industry it’s a part of: The administrative and technical support industry. It defined that as spanning three North American Industry Classification System (NAICS) codes for industries.

“This would bar not just Defendants—but every federal agency— from using the 8(a) program in three of the largest industries used by the program,” the DOJ said in its Friday filing. “It also would prevent 8(a) participants who never even benefitted from the presumption—and those that did but have since established social disadvantage without it—from fully participating in a lawful federal contracting program.”

In addition to its requested industry-specific injunction, Ultima also asked the court to prevent SBA from exercising contract options or making similar modifications to contracts with 8(a) businesses that relied on the rebuttable presumption and “providing a shortened or less rigorous review of narratives of social disadvantage” than the agency did before the court’s order.

But the DOJ said Friday that “Defendants have fully complied with the Court’s order.”

Following the injunction, the SBA started requiring so-called “narratives” of social disadvantage for businesses that previously qualified under the presumption. Those narratives, which require business owners to detail bias and discrimination they’ve faced, must be approved for a business to receive new contract awards.

“Out of an abundance of caution, SBA has treated the Court’s order as requiring more than eliminating the presumption at the application stage,” DOJ said, noting the agency doesn’t typically review a business’s social disadvantage after they’ve applied for the program.

The SBA also temporarily halted new applications to the program while it was working to comply with the order. According to the new filing, it reopened that portal on Friday.

The DOJ further said that Ultima’s suggestion that businesses that previously relied on the presumption won’t be held to the same standard for social disadvantage as other applicants is “without merit.”

“Since the Court’s order, all social disadvantage determinations have been made using the standard previously used for applicants who were not members of the designated groups entitled to rely on the presumption,” the DOJ said.

An attorney for Ultima didn’t immediately respond to a request for comment.

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Ultima Services asks court to bar SBA’s 8(a) program in the administrative, technical support industry https://fedscoop.com/ultima-asks-court-for-industry-wide-8a-injunction/ Mon, 18 Sep 2023 19:56:16 +0000 https://fedscoop.com/?p=72977 Industry-specific injunction is among several requests for additional relief in case that halted the use of presumed racial disadvantage in the Small Business Administration’s 8(a) program.

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The plaintiff in a case that shook up the Small Business Administration’s federal contracting program for developing small disadvantaged businesses is asking the court to also enjoin that program’s use in the administrative and technical support industry, among other requests.

That request was part of the additional relief Ultima Services Corp. asked the U.S. District Court for the Eastern District of Tennessee to provide in a Friday motion. The court’s previous decision enjoined the use of a “rebuttable presumption” that certain business owners qualifying for the SBA’s 8(a) federal contracting program faced social disadvantage because of their race or ethnicity. 

Ultima argued the court should grant the additional industry-specific relief “because Ultima is still suffering from the lingering effects of defendants’ discrimination.”

It also cited the Supreme Court’s ruling striking down the use of race in college admissions, arguing preventative measures are warranted to ensure the defendants, which include SBA, aren’t establishing the type of application essay program the court ruled unlawful for universities. 

The motion is the latest in a case that threw the keystone SBA contracting program into uncertainty. The lawsuit began in 2020 when Ultima, a small business government contractor, filed a complaint alleging that the program’s rebuttable presumption was racially discriminatory. Ultima’s owner, Celeste Bennett, is a white woman and wasn’t eligible for the presumption. In court documents, Ultima claimed it lost out on opportunities for USDA’s Natural Resources Conservation Service to businesses in the program.

As a result of the court’s July injunction, the SBA temporarily paused new 8(a) applications and began requiring businesses in the program that relied on the rebuttable presumption to prove social disadvantage in a narrative detailing past discrimination before they can accept new contract awards.

In the new motion, Ultima said it “disagrees with Defendants’ interpretation of the existing injunction.”

In addition to seeking an injunction of the program’s use in its industry, Ultima also asked the court to prevent SBA from exercising contract options or making similar modifications to contracts with 8(a) businesses who relied on the rebuttable presumption, and “providing a shortened or less rigorous review of narratives of social disadvantage” than the agency did before the court’s injunction. 

Ultima further asked the court to appoint someone to review the SBA’s certification for 8(a) participants who previously relied on the rebuttable presumption or make public the narratives those businesses now must submit for certification that explain their social disadvantage. 

Until the requests for additional relief are resolved, Ultima requested the court to temporarily enjoin the defendants from taking actions on 8(a) contracts with businesses that relied on the rebuttable presumption, regardless of whether the SBA approved their new narrative.

The U.S. Department of Justice, which represents the government defendants (SBA and USDA), declined to comment. Michael Rosman, general counsel for the Center for Individual Rights who represents Ultima, didn’t respond to a request for comment.

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A court ruling is forcing small businesses to detail bias to keep special contracting status https://fedscoop.com/court-ruling-forces-small-businesses-to-detail-bias/ Thu, 24 Aug 2023 20:41:34 +0000 https://fedscoop.com/?p=72295 Lawyers and contracting experts urged small businesses proving disadvantage in a ‘narrative’ to take the document seriously as their participation in the SBA’s 8(a) program is on the line.

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Small business owners who qualified for a government contracting program because of their presumed disadvantage as a member of certain racial or ethnic groups are now being required to describe precisely how they’ve been discriminated against to continue receiving contract awards under the program.

The new “narrative” requirement for the Small Business Administration’s 8(a) Business Development program, which is aimed at opening the federal contracting world to disadvantaged businesses, comes in light of a recent court ruling enjoining its use of presumed racial and ethnic disadvantage as a qualification. 

While the narratives will allow the SBA to keep things moving, they also stand to jeopardize both participants’ membership in the program and their future 8(a) contract opportunities, lawyers and experts said in interviews with FedScoop. They stressed the importance of providing detailed narratives.

“Take it seriously. Take it very seriously. Because not only do you have to have the social narrative, it has to be approved by SBA,” said Robb Wong, a former associate administrator of the SBA’s Office of Government Contracting & Business Development who, in an earlier role at the agency, helped write the 8(a) program eligibility rules.

Without a narrative, Wong said businesses in the program won’t be able to get new contracts, and even with a narrative, there’s still a possibility that SBA could disapprove it and businesses could lose their 8(a) certification. 

The July ruling by the U.S. District Court for the Eastern District of Tennessee struck down the program’s use of what’s known as a “rebuttable presumption” that certain racial and ethnic groups — including Black, Hispanic, and Asian Pacific Americans — have been subject to prejudice and are therefore socially disadvantaged. 

That presumption made it easier for businesses owned by people belonging to one of those groups to qualify for the program’s social disadvantage requirement. The court, however, said the presumption ran afoul of the constitutional right to equal protection. The opinion cited the Supreme Court’s ruling, just three weeks prior, that colleges can’t use race as a factor in admissions through affirmative action.

“The thing about these narratives is that they require a person to go into extensive detail about something that happened to them that they very well may want to forget,” said Matthew Moriarty, a federal contracting attorney and founding member of Schoonover & Moriarty who has helped clients with narratives.

Narratives have previously been a part of the application process for business owners outside the presumed groups wanting to establish social disadvantage for things like disability, religion, sexual orientation, and gender. The new guidance expands the pool of businesses who must complete them.

“I think people really need to consider these to be significant legal documents that have the chance to, unfortunately, at this point, make or break a business,” Moriarty said.

The 8(a) program is aimed at helping socially and economically disadvantaged businesses contract with the federal government over a period of nine years maximum. To qualify, businesses must be at least 51% owned and operated by one or more U.S. citizens who also meet social and economic disadvantage requirements. As participants in the program, businesses are able to get contract opportunities specifically set aside for the 8(a) program.

The Biden administration has sought to expand opportunities for the program, which is an important piece in its goal to achieve 15% of prime contracting awards going to small disadvantaged businesses by 2025. Awards for 8(a) businesses made up about 5.4% of all federal contracts awarded in fiscal year 2021, or roughly $34.4 billion, according to a Congressional Research Service report last year.

“As we work with the Department of Justice to continue reviewing the District Court’s ruling and evaluating the next steps, the SBA and Biden-Harris Administration remain committed to supporting this crucial program and the small business owners who have helped drive America’s strong economic growth,” SBA Administrator Isabella Casillas Guzman said in a statement announcing the new guidance Friday.

The SBA had previously announced a temporary suspension of new applications to comply with the court ruling, which is still in effect.

Under the new guidance, 8(a) participants were to receive letters Monday either detailing the process for creating a narrative or telling them they’ve already established disadvantage. SBA’s guidance also clarified that the new requirement doesn’t apply to businesses that previously established social disadvantage in a narrative or entity-owned firms, which refers to businesses owned by groups such as Indian tribes and Alaska Native Corporations. 

“The hardest part about the narrative — and frankly, this is the reason that even some attorneys struggle with the narrative — is it is a very unique meshing of emotional and detailed writing from kind of a personal perspective and one that is very hard for some people to relate to,” said Nicole Pottroff, an equity partner at Koprince McCall Pottroff LLC who specializes in 8(a) narratives.

The time period to complete those narratives if there is an active offer is tight. Generally, when companies get a contract offer, the SBA has about five days to accept it on that firm’s behalf, Pottroff said. 

But narratives, at least in the past, have taken time. Pottroff said the SBA typically comes back with questions asking for more information. She said clients have frequently come to her firm because everything else about their 8(a) applications is fine except for the narrative. 

“Even when we write fantastic narratives, the questions can be as simple as we’d like some more details on this event, or can you tell us a little more specifically how … you felt this event was based on bias,” Pottroff said. It’s not clear whether that will continue to be the norm, she said.

Narratives require business owners to outline exactly how they’ve experienced bias and discrimination based on their identity. That needs to be supported by detailed descriptions of incidents that show “chronic and substantial social disadvantage,” according to SBA guidance. Those descriptions should include “who, what, where, why, when, and how discrimination or bias occurred,” SBA says. 

While businesses can complete the narratives themselves, Pottroff said that the SBA’s requirements are very specific and recommended that companies that have the ability and resources seek assistance. However, Pottroff also said she hopes the SBA process generally gets easier so that more people can successfully complete them on their own.

Wong said whether a business owner should seek counsel depends on the person. He recommends business owners write their narratives in three sections for education, employment, and business with three examples each. “And try to be as specific as possible,” Wong said. 

Moriarty said those examples can include details as specific as what someone was wearing at the time or what car they were driving. 

While some delays or inconsistencies are possible with the change, Wong said he expects the end of the fiscal year to be “fairly unremarkable” for SBA. He voiced support for SBA’s longtime associate general counsel for procurement law, John Klein, who has shared guidance about the change with those in the 8(a) community. Wong said he believes Klein will come up with a solution that’s “efficient and effective for government.”

In the meantime, Moriarty emphasized “the clock is ticking” for businesses that want to be eligible for contract awards that are upcoming. 

“If you’re an 8(a) and there’s a contract that you have an eye on that you want to be insured that you’re eligible for, there is no time like the present to get moving on this thing,” Moriarty said.

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SBA to require social disadvantage narratives for most 8(a) program participants https://fedscoop.com/sba-to-require-narratives-for-most-8a-program-participants/ Fri, 18 Aug 2023 22:29:42 +0000 https://fedscoop.com/?p=72151 The decision comes in light of a July district court injunction, which cited the Supreme Court’s ruling striking down the use of race in college admissions.

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Most companies part of the Small Business Administration’s 8(a) business development program will be required to explain how they are socially disadvantaged after a district court enjoined that program’s use of presumed disadvantage for certain racial and ethnic groups.

“To comply with the Court’s order, SBA is requiring all 8(a) participants whose program eligibility is based upon one or more individuals who relied upon the presumption of social disadvantage to establish their individual social disadvantage by completing a social disadvantage narrative,” the SBA said in a post to its website Friday.

The SBA said it plans to send a communication to participants in the program, which is aimed at broadening the government contracting landscape, on Monday, Aug. 21. That communication will either “detail the process for establishing social disadvantage or will clarify that the participant has already established social disadvantage and may proceed with federal contract awards,” the SBA said.

The July ruling by a district court in Tennessee threw the 8(a) program into uncertainty after it struck down its use of a “rebuttable presumption” of social disadvantage, which is a legal term for something presumed true absent other evidence.

The statute that established the 8(a) program, the Small Business Act, defines certain racial and ethnic groups as having a rebuttable presumption of disadvantage, which in turn makes it easier for companies owned by people belonging to those groups to apply for the program.

The statement Friday comes after the SBA announced a temporary pause on new applications for the 8(a) program in light of the injunction. The government has not yet indicated whether it plans to appeal the ruling, which relied in part on the Supreme Court’s decision striking down the use of race in college admissions through affirmative action.

While certain groups were spelled out as having that presumption of disadvantage, companies owned by people outside those groups were still able to write a so-called “narrative” explaining their disadvantage. As a result of the court ruling, that existing process is being broadened to companies that previously relied on the presumption. 

The SBA also noted that certain participants of the program will not be impacted by the change.

“If you were originally admitted to the program because the qualifying owner established social disadvantage by a preponderance of the evidence, you will not need to submit a narrative,” the SBA said. “The Court’s decision also does not impact entity-owned firms, such as firms owned by Indian tribes, Alaska Native Corporations, or Native Hawaiian Organizations – these firms will not need to submit narratives.”

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