How Recent Affirmative Action Ruling Will Affect Government Contracting?

Can the recent Supreme Court decision to strike affirmative action law for college admission affect set-aside programs in government contracting?

Recently, a federal judge in Tennessee ruled that the Small Business Administration (SBA) cannot use presumed racial and ethnic disadvantage as a qualification for its business development program known as "8(a)." The ruling, which cites the Supreme Court's recent decision on affirmative action, could have broad implications for the SBA's management of the program across the U.S. government. The judge found that the use of a "rebuttable presumption" violated the Fifth Amendment rights of the company that brought the lawsuit, Ultima Services Corporation, by denying them equal protection under the law.

The SBA and the Department of Agriculture, both defendants in the case, have not yet indicated whether they plan to appeal the decision. The lawsuit was filed by Ultima, a small business government contractor, which claimed that the presumption in the 8(a) program was racially discriminatory. The ruling could require current participants in the program to prove their disadvantage, potentially impacting their eligibility.

The ruling could also have a potential effect on agencies' willingness to award contracts to businesses in the program, as they may fear legal challenges based on this case. The parties involved will meet on August 31 to discuss potential remedies.

As a short-term solution, the SBA is suspending all new 8(a) applications, which includes current applications in the queue. So, you may be asking, What does this mean for the future of government contracting?

It is my recommendation for small businesses to begin the process to shift their strategy by focusing on:

1. Education: Determine your qualifications and identify who you can team with.

2. Reassess: What do you do? How do you do it? Are you capable of doing it? If not, can you utilize your resources to team up with another company that can do “the thing” your buyer (aka agency) is willing to buy?

3. Understand what’s really happening. By Federal law, Federal agencies are required to provide only 5% of all contract actions, also known as Set-asides, such as 8a or woman-owned or minority-owned certifications. All isn’t lost because you still have access to 95% of contract procurements just by being a small business.

4. Identify your top three agencies and crush it, your deals are depending on it.

5. Know your buyer. Offer what they buy. Build strong relationships.

6. Make sure your marketing is on point and visible.

7. Check your NAICS codes. Make sure those codes match what your buyer needs.

I hope this helps you. Don’t lose hope. Keep pushin’ and move forward.

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