The U.S. Small Business Administration’s 8(a) Program is an incredible platform for economically and socially disadvantaged individuals to succeed as a small businesses. The program provides technical and management assistance, an assigned guide to navigate the world of federal government contracting, and a chance to compete for set-aside contracts—and, perhaps more importantly, receive noncompetitive sole source contracts.
If there is a drawback, it’s that the program can be very hard to get in to. Because of the benefits of the program, SBA is very protective of it. But applicant’s do not have to necessarily take a denial lying down.
SBA reserves this program for businesses with owners who are both socially and economically disadvantaged and puts them through a robust application process. When SBA denies a business’s 8(a) Program application—depending on the denial rationale—that may not be the end of the story. Applicants can often appeal.
SBA can deny an 8(a) applicant’s application for several reasons. But only four, separately or jointly, allow for an appeal: a negative finding of (1) economic disadvantage, (2) social disadvantage, (3) ownership, and/or (4) control. So, if SBA denies an application solely because it was not convinced the individual was economically or socially disadvantaged, and/or failure to demonstrate compliance with requirements governing a disadvantaged individual’s ownership and control over the applicant business, the 8(a) applicant can appeal a denial decision to SBA’s internal, yet independent, adjudicators: the Office of Hearings and Appeals (OHA). Bizarrely, however, if SBA slips in another ground for denial—e.g., it doesn’t believe that a business demonstrated its potential for success—then an appeal isn’t possible. In other words, OHA only has jurisdiction to hear appeals of decisions based on the four denial grounds listed above.
Oh, and one last thing. OHA’s has an inflexible 45-days deadline for appealing 8(a) denial decisions. So, seek out legal advice about pursuing an appeal shortly after receiving OHA’s decision. While an appeal is an additional investment, the payoff can be immense, like access to the billions of dollars in contracts set aside exclusively for 8(a) companies each year.
Here, at Schoonover & Moriarty, we have considerable experience assisting clients in appealing 8(a) Program denials. Give us a call at 913-354-2630 to discuss your options.