8(a) Program's Future in Question as New Arguments are Raised in Federal Court

As the Small Business Administration ("SBA") has scrambled to adapt to the July 19, 2023, federal court decision that found the 8(a) program's rebuttable presumption of social disadvantage for certain races and ethnicities to be unconstitutional, new arguments raised before the same court may cause further changes to the program.

The SBA's response to this order has been to request all individual 8(a) participants who received the rebuttable presumption to provide narrative descriptions of their social and economic disadvantage, as has historically been required for 8(a) applicants who did not receive the rebuttable presumption, such as women-owned businesses. The SBA initially focused on 8(a) contractors who were pending a contract award. In early September, the SBA opened its Certify portal to accept narratives from 8(a) applicants and participants who are not currently pending a contract award.

Shortly after, on September 15, 2023, the plaintiff in Ultima Servs. Corp. v. U.S. Dep't of Agric., 220CV00041DCLCCRW, filed a motion for additional equitable relief before the U.S. District Court for the Eastern District of Tennessee. The motion requests that the court clarify its prior order and injunction to confirm, first, that the defendants (the SBA and the U.S. Department of Agriculture) cannot exercise contract options or similar modifications with 8(a) contractors who received the rebuttable presumption and, second, that the SBA is precluded from a "shortened or less rigorous" review of the narratives from 8(a) participants describing their social and economic disadvantage. The motion further requests the court (1) enjoin the government from using the 8(a) program in the administrative and technical support industry, (2) either appoint a monitor to review the SBA's certification of 8(a) applicants and participants or make the narrative essays of social disadvantage and the SBA's evaluation of such essays available to the public, and (3) temporarily enjoin (until the motion is decided) the government from awarding, completing, modifying, or exercising options on any contracts through the 8(a) program to 8(a) contractors who received the rebuttable presumption regardless of whether the SBA has approved such contractors' narrative essays. The motion is currently pending before the court.