“Educating the Government Contracting Community”

Oprah Does Not Work at the SBA - Act Accordingly

SBA had rejected a women-owned, licensed engineering company's application for admission to the SBA's 8(a) Business Development Program because the SBA did not believe that the owner had been previously subjected to gender discrimination where she had 1) received less pay because she was a woman; 2) was told to wear "Daisy Dukes" to a safety class because it will improve male attendance; and 3) was told that the idea of her "driving a backhoe or digging a trench in an excavator" was unfathomable as she was "so gorgeous" that she should be in Hollywood -- SBA reasoned that this last example was simply a compliment, despite the fact that it was made to her by an Air Force Contract Officer... seriously. Arrow S. Company, Inc., SBA No. BDPE-546, March 19, 2015.

After fighting for nearly 2 years, Arrow, a non-minority, women-owned, licensed engineering company won admission into the SBA's 8(a) Business Development Program following a successful appeal to SBA's Office of Hearings and Appeals (OHA). Congratulations to Arrow on a hard won victory. But with a better initial application Arrow could have avoided (and your company can avoid) the fight altogether.

The SBA's 8(a) program is pretty much the Holy Grail for small business government contractors. Once admitted to it, participants can receive sole-source awards (No Bid) of contracts up to $4 Million. SBA does not just hand out those kinds of benefits, particularly not to a company owned by an individual who falls outside the groups identified as presumed to be socially disadvantaged. 8(a) applications need to be as bulletproof as possible.

SBA initially denied Arrow's 8(a) application because it found the application lacked the detailed support necessary to show that the owner experienced social disadvantage due to chronic and substantial gender discrimination. OHA described the application as containing documents regarding the owner's prior experiences of harassment and lower pay due to her gender, as well as showing the required impact of her social disadvantage. OHA ruled that SBA had misapplied the standards when reviewing Arrow's application and improperly required that the instances Arrow offered to show social disadvantage also showed showed that she had suffered negative impact in the business world. OHA reasoned that SBA's interpretation of 13 C.F.R. §124.103(c)(2).

Yes. SBA got it wrong. No Question. But that is not a helpful stopping point. To bemoan the fact that the folks assessing 8(a) applications at the SBA do not fully appreciate the impact of systemic bias and micro-aggressions against women or other individuals subjected to such discriminatory forces in the business world won't get your 8(a) application approved any faster or easier. Nor is it helpful to merely note that the SBA's proposed rule changes would require each instance of alleged discriminatory conduct to be accompanied by a description of the negative impact of the conduct on the individual's entry into or advancement in the business world. 80 FR 6618-01 (February 5, 2015).

Arrow's application was not as bulletproof as it could have been. The application did not include specifics about dates, names and places of certain events for fear that the company would face reprisals. It included generalized claims of gender bias (articles about single-sex education's negative impact on women in general, rather than specific evidence of its impact on the owner beyond her own self-serving statements). The most persuasive documents, letters from third-parties attesting to instances of discrimination and the impacts suffered by the applicant were clearly not tailored to make the points required by the regulations. Arrow's application relied on the SBA to interpret the meaning and significance of the third-party letters in a way that would support Arrow's application.

Don't leave your company's 8(a) certification in the hands of the SBA application reviewers. Your 8(a) application needs to make their approval a "No-Brainer" for them.

If the SBA's 8(a) program is part of your company's business plan, then become a GCARL Member and invest in your success. https://www.gcarl.com/becoming-member/

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