8(a) Wins Again in D.C. Court
Three judges have backed the 8(a) program, forcing 8(a) opponents to make their next move in the appeals courts and Congress
Supporters of the 8(a) program won their third court victory last week, shifting attention to emerging legal appeals and possible congressional action against the $4.8 billion program.
The program's backers welcomed the victory, while the losers -- Deer Park, N.Y.-based Dynalantic Corp. and its lawyers -- considered plans to appeal the case before a higher court.
Already, the losers of the two earlier 8(a) cases -- SRS Technologies in Newport Beach, Calif., and C.S. McCrossan Construction Co. Inc. in Maple Grove, Minn. -- are preparing for the next stage of their lawsuits.
Also, staff aides to Rep. Jan Meyers, R-Kan., have begun drafting a bill that would eliminate the 8(a) program. The bill may be debated in mid-June, said Craig Orfield, a spokesman for Meyers, who chairs the House Committee on Small Business.
However, "we have not taken a head count in the Senate," he said. The anti-8(a) measure won't become law until it passes the Senate and survives any veto attempt by President Bill Clinton.
Meyers' anti-8(a) bill won't be linked to any other measures, Orfield said, such as the community development plan being pushed by Rep. J.C. Watts, R-Okla., and Rep. James Talent, R-Mo.
Judge Emmet Sullivan of the U.S. District Court for the District of Columbia announced his decision against Dynalantic May 20, and refused Dynalantic's request that he halt a U.S. Navy 8(a) contract for procurement of a helicopter-training device.
To appeal Sullivan's decision before the three-judge appeals court will cost roughly $55,000, said one lawyer working for Dynalantic. "It is the only way we can win.... We've been done wrong by the judge," he said.
To win, "what you want is a very conservative judge," said another lawyer working on an 8(a) appeal. SRS lodged its appeal May 16 with the federal court in Richmond, Va., which is more conservative than other federal courts, he said.
No date has been set for McCrossan's next hearing, which will be heard in Las Cruces, N.M.
Dynalantic's lawyers had asked Sullivan to declare the 8(a) program an unconstitutional race-based program, citing the Supreme Court's Adarand v. Pena decision last June. The 8(a) program unfairly excludes small white-owned businesses from government contracts worth roughly $4.8 billion in 1995, Dynalantic argued.
But "a business concern that had not sought to be certified as a socially and economically disadvantaged business lacks standing to attack the 8(a) program as a race-based program" that excludes applicants because of their race, Sullivan wrote. Without legal standing, Dynalantic can't properly lodge a lawsuit.
"I don't know who has standing if we don't," said one of Dynalantic's lawyers. Dynalantic is a small business, and its owners could have redone their finances to meet the economic tests needed to enter the 8(a) program, he said. Also, Dynalantic suffers when emerging contracts are set aside for the 8(a) program, he said.
Of the roughly 5,300 8(a) companies, only a few are white-owned. About 20 percent of 8(a)s are from the Washington area.