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Look Out SBA, Use of A Race-Based Rebuttable Presumption for 8(a) Qualification Is Unconstitutional

Under the United States Small Business Administration’s (SBA) 8(a) program, certain racial and ethnic groups are extended a rebuttable presumption that they are socially disadvantaged to qualify for the program. However, this practice has come to a screeching halt based on a recent decision by the U.S. District Court for the Eastern District of Tennessee. According to the Court, use of this rebuttable presumption was not narrowly tailored nor were the Defendants (SBA and U.S. Department of Agriculture (USDA)) able to show a compelling interest in their use of the rebuttable presumption as it applied to the plaintiff. As a result, the court found that this practice violated the Fifth Amendment’s Due Process Clause and enjoined the SBA and USDA from using this presumption. While this issue is far from being finalized, until it is, this ruling will likely stymie the government’s process for qualifying businesses for the 8(a) program. Click here to learn more.

"Without stated goals for the 8(a) program or an understanding of whether certain minorities are underrepresented in a particular industry, Defendants cannot measure the utility of the rebuttable presumption in remedying the effects of past racial discrimination." - Judge Clifton L. Corker


government relations, litigation