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Federal Market Intelligence for Small Business |
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Judge hits 8(a) eligibilityA Tennessee judge has struck down a significant Small Business Administration rule allowing members of minority groups to be presumed disadvantaged and likely eligible to participate in the SBA’s 8(a) Business Development contracting program for disadvantaged small business owners. The July 19th ruling by District Judge Clifton Corker indicated that the SBA’s application of a “rebuttable presumption” to establish disadvantage for members of specific racial and ethnic groups is unconstitutional and potentially violates other applicants’ rights of equal protection. A rebuttable presumption is a legal term referring to something that is presumed to be true in the absence of evidence to the contrary. SBA has applied the presumption to define Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, Subcontinent Asian Americans, and members of other designated groups as disadvantaged and potentially eligible for the 8(a) program. The court’s decision--unless it is overruled by another court--is likely to have an immediate negative impact on minority group applicants to the 8(a) program. Going forward, minority applicants to the 8(a) program likely will have to provide direct evidence to prove they are socially and economically disadvantaged, which attorneys say may be difficult to do. Read PilieroMazza PLLC’s analysis of the ruling in this issue's Column.
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