September 9th 2023.
The business world is facing a big challenge as a result of the Supreme Court's decision to reject race-conscious admissions systems of Harvard College and the University of North Carolina. This has caused a huge uproar in the minority business communities.
The 8 loan program is a federal initiative designed to narrow the gap between government contracting and historically disadvantaged groups. But this program has been thrown into disarray with the recent ruling on Ultima Services Corp. v. U.S. Department of Agriculture. The judge in this case declared that the 8 loan program violated a contractor's Fifth Amendment right to equal protection.
For the past five years, five percent of all federal contracting dollars have gone to small disadvantaged businesses. Many of these businesses have taken advantage of the 8 loan program, with over 4,800 participants and nearly 4,000 beneficiaries. Last year, 8 participants received $34 billion in federal contracts, including $9.3 billion in 8 set-aside awards and $11.1 billion in sole-source awards.
Unfortunately, businesses will no longer get to qualify as socially disadvantaged and instead must write an essay describing their experience of how their race has impacted their success. This is causing a lot of anxiety among small business owners and contractors. Nicole Pottroff, a government contracts lawyer, has already noticed a "massive influx" of people asking for help with the essay writing portion.
The SBA is doing their best to help out by providing additional support and training for staff. This is all happening at the same time as North Carolina's GOP officials are pushing to remove the only Black Woman Supreme Court Judge for speaking up against racial bias.
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