- Details
- By Brian Edwards
- Native Contracting
The U.S. Small Business Administration has proposed changes to its 8(a) Business Development Program that would eliminate race-based presumptions of social disadvantage for individually owned businesses while leaving eligibility standards unchanged for tribally owned enterprises, Alaska Native corporations and other Native entity-owned participants.
In both the title and summary of the proposed rule published in the Federal Register, SBA emphasized that the changes only apply to individually owned firms and “do not impact entity-owned firms,” including tribes, Alaska Native corporation, Native Hawaiian organizations and community development corporations.
The proposed rule, announced June 11, would require all individual applicants seeking admission to the 8(a) program to submit evidence demonstrating social disadvantage. Membership in a racial or ethnic group alone would no longer establish eligibility, according to the SBA.
For Indian Country, the agency said eligibility standards for businesses owned by federally recognized tribes, Alaska Native corporations, Native Hawaiian organizations and community development corporations would remain unchanged.
The proposal comes after the Department of Defense reaffirmed that participation by tribes and Alaska Native corporations in the 8(a) program is based on their political status under federal law rather than diversity, equity and inclusion initiatives.
In a May 28 letter to Alaska's Republican Sens. Lisa Murkowski and Dan Sullivan, Under Secretary of Defense for Acquisition and Sustainment Michael P. Duffey wrote that participation by federally recognized tribes and Alaska Native corporations in federal programs is “grounded in their political status as Native Americans, not DEI initiatives.”
The SBA proposal follows a 2023 federal court ruling that found unconstitutional the program's rebuttable presumption that members of certain racial and ethnic groups were socially disadvantaged. SBA Administrator Kelly Loeffler said the proposed rule would establish a single standard for individually owned applicants by requiring evidence of social disadvantage.
The 8(a) Business Development Program provides participating firms with business development assistance and access to federal set-aside and sole-source contracting opportunities. The program remains a major source of federal contracting revenue for tribal enterprises and Alaska Native corporations. Native-owned firms received $16.1 billion of the program's approximately $26 billion in federal contract awards during fiscal 2024, according to data previously reported by Tribal Business News.
The proposal also arrives amid ongoing concerns from Native contractors about SBA administration of the program. In May, the Native American Contractors Association and 53 Native-owned businesses urged SBA to address delays in processing 8(a) applications, saying some reviews had stretched beyond regulatory deadlines and appeared to have stalled since August 2025.
The proposed rule is open for public comment through July 13. The Federal Register notice does not reference tribal consultation or indicate whether SBA determined consultation was unnecessary because tribal eligibility standards are unchanged.
The SBA has not announced when the proposed rule would take effect. The agency is expected to accept public comments before issuing a final rule.
