This decision comes over a month after a ruling from the Eastern District of Tennessee prohibited the SBA from applying a presumption of social disadvantage to certain designated groups. In an August blog post, we wrote about the Ultima decision and its effects. Shortly after, the SBA closed the portal for new 8(a) applicants and mandated that all current 8(a) participants submit a social disadvantage narrative proving their eligibility.
The SBA announcement also offered an additional and more intuitive avenue to submitting a social disadvantage narrative. In Certify, applicants can continue to upload previously prepared narratives, but SBA also added “a plain language fillable questionnaire for applicants to identify social disadvantage.” The questionnaire asks applicants to describe the event(s) that have negatively affected entry or advancement in the business world, prompting responses to six questions:
- What happened?
- How did it affect opportunities to start or expand your business?
- What contributed to the discrimination?
- When did it happen?
- Where did it happen?
- Who contributed?
The September 29 announcement is good news for potential participants previously waiting to apply for the program, however, Ultima Services Corp., the plaintiff in the original lawsuit, has submitted a new filing with the Tennessee court arguing the SBA has misinterpreted the court’s order enjoining the SBA from “using the rebuttable presumption of social disadvantage in administering [the SBA 8(a) program].”
Ultima requests additional equitable relief, including enjoining the federal government from using the 8(a) program in the administrative and technical support industries at all, enjoining the government from awarding, completing, modifying, or exercising contracts on any 8(a) contracts involving entities who used the rebuttable presumption regardless of a social disadvantage narrative, and more. As the government contends, the plaintiff’s request “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. 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.”
We will continue to watch this litigation as it unfolds and will provide updates as they become available.
If you have any questions about the SBA guidance, writing a social disadvantage narrative, or the 8(a) program as a whole, please contact the author.