The SBA’s 8(a) program is making a major change to social disadvantage narrative requirements in the wake of a court ruling influenced by the Supreme Court’s decision on affirmative action.

The Small Business Administration’s 8(a) Business Development program was meant to make available billions in government contracting dollars for “historically disadvantaged groups.” But in July, a federal judge in Tennessee struck down a provision of the program that equated race with social disadvantage.

The decision throws into disarray an SBA program that has served minority-owned small businesses for about five decades. Legal experts said it could signal trouble for other programs meant to help underrepresented groups win federal contracts, including veterans and women.

Under the new guidelines, being Black, Hispanic, Asian or Native American is no longer enough to automatically qualify as socially disadvantaged — a key step in making it into the program. Instead, in a mass email distributed Aug. 22 by SBA officials, business owners were instructed to submit an essay demonstrating that race had hindered their success.

On July 19, 2023, the United States District Court for the Eastern District of Tennessee issued a ruling (Ultima Servs. Corp. v. Dep’t of Ag. (E.D. Tenn.) affecting the application process for determining eligibility for SBA’s 8(a) Program. 

All current 8(a) participants will receive additional, direct communication from the SBA detailing what, if any, additional information must be provided to SBA in order to continue Program participation. Potential participants who have already initiated an 8(a) application may continue to work on their applications but may be required to incorporate changes in the future. If that is the case, SBA will give them clear indication of the changes needed.