August 21, 2023

SBA Releases Interim Guidance on 8(a) Program in Light of Ultima Decision

Holland & Knight Alert
Robert K. Tompkins | Leila S. George-Wheeler | Hillary J. Freund | Kelsey M. Hayes

As announced by U.S. Small Business Administration (SBA) Associate General Counsel for Procurement Law John Klein in an Aug. 17, 2023, webinar, SBA has issued a press release and interim guidance regarding its implementation of the order issued by the U.S. District Court for the Eastern District of Tennessee in Ultima Services Corp. v. Department of Agriculture. (See Holland & Knight's Government Contracts blog, "SBA Update on 8(a) Program in Light of Ultima Decision," Aug. 18, 2023.)

A Closer Look at the Guidance

According to the guidance, all current 8(a) Business Development Program participants can expect to receive "a direct communication from SBA" on Aug. 21, 2023, that "will detail the process for establishing social disadvantage or will clarify that the participant has already established social disadvantage and may proceed with federal contract awards." Be sure to closely monitor the inbox of your designated SBA point of contact for this important communication.

As forecast by Klein, the guidance states that all individually owned 8(a) participants that relied on the "rebuttable presumption of social disadvantage" to meet the social disadvantage requirements of the 8(a) program will have to establish their individual social disadvantage by completing a social disadvantage narrative as required by 13 C.F.R. § 124.103(c). Specifically, the guidance states:

To receive new 8(a) contracts, an individual-owned 8(a) participant that previously relied on the presumption of social disadvantage to support its eligibility will need to submit information to SBA, through the system, that will allow SBA to determine whether that the individual upon whom eligibility is based has established personal social disadvantage.

To assist impacted firms, SBA has provided a link to its Guide for Writing a Social Disadvantage Narrative.

Consistent with Klein's statements, SBA's guidance makes clear the court's ruling does not impact 8(a) participants whose individual owners established that they were socially disadvantaged by a preponderance of the evidence, nor does it apply to entity-owned firms such as those owned by tribes, Alaska Native Corporations (ANCs) and Native Hawaiian Organizations (NHOs). The guidance expressly states these firms will not need to submit social disadvantage narratives. Firms in these categories can also expect to receive a communication from SBA on Aug. 21, 2023, that will "provide them a letter stating they have met social disadvantage requirements and may proceed with 8(a) federal contract awards."

Finally, the press release notes that SBA, in conjunction with the U.S. Department of Justice (DOJ), is providing federal agencies with detailed interim guidance on how they may continue to issue 8(a) contract awards during this "critical acquisition[ ] period at the end of the fiscal year."

How We Can Help

Holland & Knight's Government Contracts Group will continue to provide future updates regarding the guidance. For specific questions about the guidance or its specific impact on your company, please contact the authors.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.

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