Company Petitions Supreme Court Over Constitutionality of Section 8(a) Program
Rothe Development, Inc., a woman-owned small business located in San Antonio, recently filed a writ of certiorari with the U.S. Supreme Court arguing the Small Business Administration’s Section 8(a) program that ensures at least 5% of federal contracting goes to “socially and economically disadvantaged individuals” violates the Equal Protections Clause of the U.S. Constitution. At issue in Rothe’s petition is whether or not courts should apply the “strict scrutiny” test to the challenge or the less stringent “rational basis” test to the due process challenge.
The D.C. Circuit previously held that the Section 8(a) program was “race-neutral” and not subject to strict scrutiny because Congress did not list specific racial groups when it defined eligible businesses in the Small Business Act. Instead, Congress limited the program to “socially and economically disadvantaged individuals” defined as “persons ‘who have been subjected to racial and ethnic prejudice or cultural bias due to their identity as a member of a group…’” Without a suspect classification, like race, in the definition, the constitutionality of the Small Business Act is subject to the rational basis test.
Section 8(a) federal contracting is an important sector for Native American-owned small businesses. In 2011, Native 8(a) contractors sold $6.8 billion dollars of goods and services to the federal government accounting for 1.3% of all federal contracting and 40% of all Section 8(a) contracting.