August 24, 2023
The Federal Government sponsors a program for emerging contractors called the 8(a) program which allows owners who have suffered “social disadvantages” to obtain unique contract opportunities not available to other contractors. This includes sole source contracts and procurements with limited competitors. With the recent seismic shift by the Supreme Court away from presumptions of disadvantage based on race or national origin, the SBA’s 8(a) program is going through its own shift and abandoning a presumption of disadvantage if owners were part of certain races or nationalities.
The SBA halted reviews of applications to the program and is seeking statements from each approved 8(a) contractor which demonstrate that its owners are the victims of social disadvantage. Now each 8(a) contractor’s owner must demonstrate with examples why they believe they were the victim of social disadvantage.
Writing a narrative to demonstrate social disadvantage is a soul searching effort for many owners who have to recount specific instances where they have been disadvantaged in the past because of their personal characteristics. The owner is required to provide detailed recounting of where they suffered social disadvantage, corroborate them if possible and will need to demonstrate that this disadvantage was more likely than not the result of their personal characteristics.
Evidence of individual social disadvantage must include the following elements:
Because the individual needs to have been the victim of “substantial and chronic disadvantage,” it generally means there must be more than one or two specific, significant incidents unless a single incident is so substantial and far-reaching that there can be no doubt. The incidents identified must be presented in sufficient detail and should include: (1) when and where the incident occurred; (2) who discriminated against the business owner; (3) how the discrimination took place; and (4) how the applicant was adversely affected by the incident.
The regulations provide that SBA will consider “any relevant evidence” in assessing negative impact or entry into the business world, but in every case SBA will consider education, employment and business history, where applicable, to see if the “totality of the circumstances” shows such disadvantage. For example,
This is no easy task for any business owner. However, in order to maintain or achieve 8(a) status, it must be undertaken with full view of the interests which are at stake. The SBA’s limited guidance is provided here. In addition, the SBA’s Office of Hearing Appeals has decisions evaluating social disadvantage which provide examples of past efforts to pursue 8(a) status. Those efforts included specific detailed accounts of discriminatory behavior at school and in the industry as well as letters from allies in the industry who have witnessed the discrimination against the individual or in the industry in general.
The SBA has prioritized that contractors with pending awards or contracts will go first. As those decisions occur, additional guidance will come forth. If you need assistance in crafting your statement or in reviewing it prior to submission, you can contact RKW at any time.