Gender Bias in SBA 8a BD Small Business Programs Certification

SBA Does Make Mistakes When Evaluating Gender Bias for 8a BD Small Business Programs

To gain entry into the 8a Program, a program designed to help small disadvantaged businesses and SBA Minority Owned Business owners compete in the marketplace, the business entity must be unconditionally owned and controlled by one or more socially and economically disadvantaged individuals.  13 CFR 124.101.

While gender is not a protected class under SBA 8(a) certification small business programs, it is an objective distinguishing feature that, if shown to (1) contribute to a substantial and chronic social disadvantage and (2) has a negative impact on your advancement in the business world, can aid in establishing the requisite individual social disadvantage for 8a BD small business programs certification. 

Note: Simply being a minority owned business does not by itself fill the legal requirements.

It should be noted that the standard is not chronic and substantial gender bias but rather chronic and substantial social disadvantage because of the gender bias.  The Small Business Association (“SBA”) should look to at the effects of the acts alleged, and not the acts themselves. Find out more about writing a social narrative.

SBA’s Standard for Gender Bias: The primary question the SBA should be asking, when dealing with gender bias, is “whether the evidence shows that it is more likely than not that the petitioner was discriminated against on the basis of her gender.”  Matter of Ironwood Commercial Builders, Inc. See more information about gender discrimination in your business.

The SBA should first ask if the alleged facts presented as evidence were motivated by gender bias.  If yes, the next question is whether the applicant was negatively affected by that bias.  The SBA cannot answer the second question without first answering the initial question.

8a BD Mistakes Made

Looking to the end result right away: The SBA must decide if the gender bias created a social disadvantage and/or a negative impact, and not look solely to the ‘end result.’  In a recent case, a woman who was claiming social disadvantage on the basis of gender, had obtained an AA and a BA in Business.  The SBA noted that because she eventually earned a degree, her gender could not be seen to have created a social disadvantage. The Office of Hearing and Appeals said the SBA essentially punished her for having the will to persevere and did not look what effects the alleged incidents had on the applicant.

Not considering both social disadvantage and negative impact in gender bias cases: Not every claim needs to prove both social disadvantage and negative impact.  However, in a recent case involving gender bias, the SBA focused their attention solely on the negative impact implications but ignored the social disadvantage context.  The Office of Hearing and Appeals did note that the negative impact assessment implies a finding of social disadvantage because the negative impact cannot exist without the social disadvantage. 

In gender bias case, the SBA should use a preponderance standard and not a clear and convincing standard; the clear and convincing standard is too high of a burden on the applicant to prove.  All this means is that the applicant must prove that the fact, here – gender bias, was more likely than not to have occurred.

Not explaining their findings when considering gender bias: In order to have a chance at approval, the SDB certification applicant must provide enough detail concerning the incident(s).  Sufficient detail will be found if the applicant describes (1) where and when the incident occurred, (2) who was involved, (3) how the incident occurred, and (4) how the applicant was adversely affected by this incident. 

If the SBA denies the 8a bd small business program certification application, it must explain which of the four parameters are missing and explain to the applicant what information would be needed to provide enough detail should she choose to ask for reconsideration. 

On appeal, if it can be shown that the SBA did not properly explain their findings on gender bias and did not provide specific reasoning, for every material issue relating to each eligibility factor, the Office of Hearing and Appeals will likely remand for a more thorough analysis. 

For help with your 8a BD Program Application or to file an appeal based upon gender bias, call our 8a certification consultants and lawyers at 1-866-601-5518.