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Letter to The Honorable Isabella Casillas Guzman, Administrator, U.S. Small Business Administration (December 1, 2023)

Summary

Letter dated December 1, 2023, from the Committee on Small Business to Isabella Casillas Guzman, Administrator of the U.S. Small Business Administration, stating that the Committee is investigating the SBA's implementation of the recent court order on narrative reviews in the 8(a) business development program. It states that on July 19, 2023, the U.S. District Court for the Eastern District of Tennessee enjoined the SBA's use of its "rebuttable presumption" of social disadvantage, and that on September 8, 2023, the SBA told the Committee that 1,278 firms were identified as eligible to receive 8(a) contracts. The Committee requests documents and information, including the SBA's internal review policy and standards for narrative review. The signature block lists Roger Williams, Chairman.

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Issuer
Congressional materials
Document type
405809 2023 12 01 Chairman Williams Pens Letter To Sba Regarding Imp Att0
Date
2023-12-01
Case
405809 2023 12 01 Chairman Williams Pens Letter To Sba Regarding Imp Att0

Cite this document

“Letter to The Honorable Isabella Casillas Guzman, Administrator, U.S. Small Business Administration (December 1, 2023).” Dated 2023-12-01. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2023-12-01-405809-2023-12-01-chairman-williams-pens-letter-to-sba-regarding-imp-att0/, SHA-256 83afa6f728f4cd03bb62e0ee4d73c80f50883a141cb8f3c1bbfd017f16cd4041.

Full text

                                           December 1, 2023

The Honorable Isabella Casillas Guzman
Administrator
U.S. Small Business Administration
409 3rd Street SW
Washington, DC 20416

Dear Administrator Guzman:

        The Committee on Small Business (the Committee) is investigating the Small Business
Administration’s (SBA) implementation of the recent court order related to narrative reviews
within the SBA’s 8(a) business development program (8(a)). The 8(a) program provides
participants with training, technical assistance, and contracting opportunities but is generally
limited to small businesses owned and controlled by socially and economically disadvantaged
individuals. Considering the updated requirements under the court order have a significant
impact on how the SBA administers this program, the Committee seeks information on the
SBA’s compliance with the expanded program obligations.

         On July 19, 2023, the U.S. District Court for the Eastern District of Tennessee enjoined
the SBA’s use of its “rebuttable presumption” of the social disadvantage designation for
eligibility in the 8(a) program.1 Prior to the District Court’s ruling, the SBA presumed
individuals who are members of certain racial and ethnic groups to be socially disadvantaged,
thus meeting a key criteria to enter into the 8(a) program.2 The District Court found this violated
the Fifth Amendment’s Due Process Clause.3 In light of this ruling, the SBA now requires 8(a)
applicants and participants to provide a narrative detailing an individual’s assertion of social
disadvantaged status, unless they previously provided a narrative to the SBA.4 The SBA created
a task force to help review the increased volume of narratives.5 While SBA acknowledges these
individuals have received three trainings, it is imperative to ensure that reviews are being done in
accordance with 13 C.F.R. § 124.103(c) and other relevant statutes.


1
  SBA Issues More Guidance on Use of 8(a) Program During Ultima Injunction, HOLLAND & KNIGHT (Sept. 28,
2023).
2
  SBA Issues Interim Guidance After Ultima Decision Finds 8(a) Program Violates Equal Protection,
MCGUIREWOODS (Sept. 29, 2023).
3
  SBA Issues More Guidance on Use of 8(a) Program During Ultima Injunction, HOLLAND & KNIGHT (Sept. 28,
2023).
4
  SBA Issues Interim Guidance After Ultima Decision Finds 8(a) Program Violates Equal Protection,
MCGUIREWOODS (Sept. 29, 2023).
5
  Ultima Servs. Corp. v. U.S. Dep't of Agric., 2:20-CV-00041-DCLC-CRW (E.D. Tenn. Jul. 19, 2023).
The Honorable Isabella Casillas Guzman
December 1, 2023
Page 2 of 3

        On September 8, 2023, the SBA communicated to the Committee that there were 1,278
firms identified as eligible to receive 8(a) contracts. Given the impact of the District Court’s
ruling and the increased volume of narratives requiring reviews, the Committee is interested in
ensuring the appropriate application of processes and procedures in the 8(a) program. To that
end, the Committee requests the following documents and information:

   1. A copy of the SBA’s internal review policy and standards for narrative review, including
      any training(s) or documents provided to all narrative reviewers.

   2. A copy of the SBA’s internal policy, standards, and documents related to the narrative
      adjudication process.

   3. The total number of narratives reviewed since the District Court’s ruling. Please delineate
      between new entrants and existing 8(a) firms that did not previously need to submit a
      narrative.

   4. The number and percentage of reviewed narratives approved since the District Court’s
      ruling.

   5. The number and percentage of reviewed narratives that required adjudication since the
      District Court’s ruling.

   6. The number of firms removed from the 8(a) program due to an insufficient narrative
      since the District Court’s ruling.

   7. The total number and outcomes of narratives reviewed in the past two years prior to the
      District Court’s ruling. Please provide the total number for each year as well as the
      number of approvals and denials each year.

   8. The total number and percentage of firms that sent a narrative but were denied due to an
      insufficient narrative in the past two years prior to the District Court’s ruling.

   9. The number and percentage of reviewed narratives that required adjudication in the past
      two years prior to the District Court’s ruling. Please provide the number and percentage
      per year.

        To schedule the delivery of responsive documents or ask any related follow-up questions,
please contact Committee on Small Business Majority Staff at (202) 225-5821. The Committee
on Small Business has broad authority to investigate “problems of all types of small business”
under House Rule X. Thank you in advance for your cooperation with this inquiry.”
The Honorable Isabella Casillas Guzman
December 1, 2023
Page 3 of 3

                                    In God We Trust,




                                   Roger Williams
                                       Chairman
                               Committee on Small Business


cc:   The Honorable Nydia M. Velasquez, Ranking Member
      Committee on Small Business

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