Today, the U.S. Small Business Administration released interim guidance regarding the 8(a) Business Development Program in light of a United States District Court ruling in Ultima Servs. Corp. v. Dep’t of Ag. affecting the program’s determination of social disadvantage.
The updated interim guidance for 8(a) Program participants and applicants can be found on the SBA’s website here. The SBA, in conjunction with the Department of Justice, is also providing federal agencies today with detailed interim guidance on how they may continue to issue 8(a) contract awards during this critical acquisitions period at the end of the fiscal year.
“The 8(a) Program has more than a 50-year track record of making contracting with the U.S. government more accessible for thousands of small businesses who in turn provide critical products and services to advance agency missions,” said SBA Administrator Isabella Casillas Guzman. “The SBA is proud of our work to promote equity and level the playing field in federal procurement to attract a diverse supplier base and ensure competition, innovation, and performance. 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.”
The 8(a) program is a robust nine-year program created to help firms owned and controlled by socially and economically disadvantaged individuals expand their footprint in the federal marketplace through training and technical assistance. The 8(a) program enjoys broad bipartisan support, with Congress directing the SBA to continue the program countless times across at least eight different presidential administrations.
In 2021, President Biden set an overall goal of awarding 15% of federal prime contracting to small disadvantaged businesses by fiscal year 2025, representing a 50% increase from spending on these businesses when he first took office. The 8(a) program has helped achieve historic progress towards this goal – under President Biden, federal agencies have achieved record levels of spending on contracts with small businesses overall, and with small disadvantaged businesses specifically. The federal government’s small business prime contracting program supported the creation of 727,800 jobs nationwide in fiscal year 2022 alone.
Background on Ultima Servs. Corp. v. Dep’t of Ag. (E.D. Tenn.)
On July 19, 2023, the United States District Court for the Eastern District of Tennessee issued a ruling (Ultima Servs. Corp. v. Dep’t of Ag. (E.D. Tenn.)) affecting the application process for determining eligibility for SBA’s 8(a) Program.
All current 8(a) participants will receive additional, direct communication from the SBA detailing what, if any, additional information must be provided to SBA in order to continue Program participation. Potential participants who have already initiated an 8(a) application may continue to work on their applications but may be required to incorporate changes in the future. If that is the case, SBA will give them clear indication of the changes needed. Potential participants who have not yet initiated an 8(a) application should wait until the reopening of the application on certify.sba.gov.
The Court’s ruling also scheduled a hearing on August 31, 2023, after which the SBA may issue updated guidance as necessary.