Is This the End of the SBA 8(a) Program?
by Barbara Kinosky, Managing Partner
Ultima Services Corporation is back in federal court again challenging the Small Business Administration’s 8(a) program. Ultima, in its motion filed this month, is asking the court to enjoin the government from exercising options to 8(a) contracts with contractors that received the rebuttable presumption of social disadvantage for admittance into the 8(a) program, instead of having to prove actual social disadvantage. It is also asking the court to enjoin USDA from using the 8(a) Program in the administrative and technical support industry.
Here is the back story for those of you who missed my other posts about the court ordered changes in the SBA’s 8(a) program. Ultima, represented by the Center for Individual Rights, filed a lawsuit alleging that aspects of the 8(a) program admission process were racially discriminatory. Ultima’s owner is a white woman, who claimed that Ultima lost federal contracting opportunities at the USDA to companies that were 8(a) certified. The U.S. District Court for the Eastern District of Tennessee enjoined SBA from using a “rebuttable presumption” to determine that companies because of their owner’s race or ethnicity qualified for the 8(a) program. SBA then paused acceptance of new applications for the program and requested that all current participants in the program immediately provide a narrative to prove social disadvantage before they could receive new contract awards.
Ultima claims that it is still suffering from the effects of the government’s use of the 8(a) program, particularly in its industry of administrative and technical support. The three NAICS codes that have been most frequently associated with the administrative and technical support industry – 541611 (Administrative Management and General Management Consulting Services), 561110 (Office Administrative Services), and 561320 (Temporary Help Services) – were all in the top twenty NAICS codes used by the Section 8(a) Program according to the SBA’s 408 Report in 2017. Ultima claims it has lost significant revenue because of it. It is asking for the chance to compete for those contracts. For those of you interested in finding out the names of 8(a) program participants, NAICS codes and revenue, click on the link.
My take is that if the 8(a) program is significantly changed for non-Alaskan Native Corporations (ANCs) then the beneficiaries of those changes will be the ANCs. ANCs are considered small, and economically and socially disadvantaged per the SBA regulations at 13 C.F.R. §124.109(c)(2).
Related Blog Posts: