White Firms Seek Entry to 8(a)
Three white-owned companies have recently applied to join the controversial 8(a) program, long used to steer roughly $4.5 billion per year in government contracts toward minority-owned companies. The applications follow intensive political and legal pressures for a reform of the program. These pressures have prompted administration officials, led by Deval Patrick, the civil rights chief at the Justice Department, to
Three white-owned companies have recently applied to join the controversial 8(a) program, long used to steer roughly $4.5 billion per year in government contracts toward minority-owned companies.
The 8(a) program now includes 6,002 companies, only 32 of which are owned by non-minorities, including white men and white women. The program is managed by the Small Business Administration.
The program's focus on racial and ethnic minorities has generated intensive legal and political pressure during the last year. For example, the Supreme Court's June 1995 Adarand v. Pena decision curbed the scope of government affirmative action programs, while the House of Representatives may soon approve a bill by Rep. Jan Meyers, R-Kan., that would kill the 8(a) program.
Because of these pressures, "the SBA is really softening. These [non-minority] people won't have any problem getting in," said Marina Laverdy, director of the Washington-based Latin American Management Association, which lobbies on behalf of Hispanic-owned companies.
"I really don't see a huge increase of activity [among non-minority companies trying to get into the 8(a) program]... but I expect that at some point the numbers will increase," said Pamela Mazza, a partner at the Washington-based firm, Piliero, Mazza & Pargament. Mazza handles much 8(a)-related work, including companies' applications to enter the program.
Under the changes suggested by the Justice Department, white company owners could enter the 8(a) program if they show by "a preponderance of the evidence" that they have suffered social discrimination.
Under current rules, company owners must offer "clear and convincing" evidence that they have suffered from bias.
However, "I am not convinced that [change] means anything in practical terms," Patrick said April 3 at a Washington meeting hosted by the Washington-based National Coalition of Minority Businesses.
Carlos Sandoval, a lawyer with Grossman & Sandoval, McLean, Va., also downplayed the affect of the change if it is accomplished. Company owners must show bias and also meet the 8(a) limits on personal wealth and company revenue, said Sandoval, who works with companies seeking entry into the program.
The changes suggested by Patrick have yet to be offered as draft regulatory changes, and are far from final approval.
Until the regulations are changed and Small Business Administration lawyers write rules that describe the difference between the "clear and convincing" evidence and "preponderance of evidence," the entry rules will stay as they are, said SBA official Jodie Stallings.