The US Small Business Administration’s (SBA) new rule redefining eligibility for the 8(a) Business Development Program may prompt applicants with pending submissions to consider withdrawing and reapplying, while future applicants will face a new and largely untested evidentiary standard.
Effective September 10, 2026, the rule eliminates the longstanding “rebuttable presumption” that automatically recognized members of certain racial, ethnic, and cultural groups as socially disadvantaged. Instead, applicants must demonstrate that a federal, state, or local government, university, or corporation discriminated against a group of which they are a member, or favored a group of which they are not a member, and that they suffered material harm as a result.
McCarter & English partners Alexander Major and Franklin Turner, co-chairs of the firm’s Government Contracts practice, discussed the rule and its potential implications with Law360.
Alex noted that applicants will now need to build a more substantial evidentiary record to support their eligibility. He explained that under the new rule, applicants must identify the policy at issue, establish a connection between that policy and the alleged discrimination, and demonstrate resulting harm, creating a more significant evidentiary burden than under the prior framework.
The SBA clarified that the new requirements do not apply to individually owned businesses already participating in the 8(a) program, nor do they affect entity-owned small businesses, including those owned by Alaska Native Corporations, Native Hawaiian Organizations, and community development corporations.
Franklin noted that the existing eligibility framework for entity-owned small businesses is established by statute and was designed to expand access to federal contracting opportunities. While acknowledging ongoing discussion about the future of the program, he indicated that he does not anticipate significant changes affecting entity-owned participants in the near or intermediate term.