Is SBA bar too high for women in 8(a)?

The Small Business Administration applied inappropriately high legal standards for judging whether a woman business owner was socially disadvantaged in an application for the 8(a) Business Development Program, according to the SBA’s Office of Hearing and Appeals (OHA). The office overturned the SBA’s decision and sent it back for reconsideration.

“The (OHA) concludes that the SBA was unwilling to accept petitioner's account of her social disadvantage, and thus required overwhelming evidence in support of her claims. This is not the correct standard,” the decision states.

It is the latest of several recent cases in which the SBA has applied a higher legal standard to women applicants than what is specified under law, according to Steven Koprince, government contracts attorney, who has been blogging about such cases for more than a year.

“It is very troubling–to say the least–that the same problems OHA has identified in previous decisions keep cropping up,” Koprince wrote in a recent blog entry.

He estimates there have been about six incidents in the last two to three years involving SBA denials of women business owners into the 8(a) program on the basis that the women allegedly did not prove they were disadvantaged.

The most recent case involved Ironwood Commercial Builders Inc., (SBA No. BDPE-532 (2014)) whose owner, Nancy Brinkerhoff, applied to the 8(a) program in February 2012.

The SBA denied Brinkerhoff’s application, then denied her request for reconsideration, because of an alleged lack of proof of social disadvantage. Brinkerhoff then appealed the denials to the OHA.

The OHA said in its decision that the SBA analyzed Brinkerhoff’s claims of social disadvantage under a “clear and convincing evidence” legal standard rather than the appropriate standard of “preponderance of evidence,” which is a looser standard.

“Petitioner has offered examples of gender-motivated bias in all three phases of Mrs. Brinkerhoff's life,” OHA Administrative Judge Alexander Fernandez ruled.

“In dismissing all of these claims, the SBA applied the wrong evidentiary standard, failed to discuss relevant evidence, based its conclusions on the failure to submit tangentially relevant evidence, arrived at conclusions that contradicted credible evidence, arrived at conclusions based on non-existent evidence or unfounded speculation, and omitted necessary analysis and explanation,” Fernandez wrote.

More information: Koprince blog entry: http://goo.gl/k8YGKt
OHA decision: http://www.sba.gov/oha/decisions

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Correction

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