The “8(a) Program” for Small Businesses Owned and Controlled by the Socially and Economically Disadvantaged: Legal Requirements and Issues Page: 6 of 34
30 p.View a full description of this report.
Extracted Text
The following text was automatically extracted from the image on this page using optical character recognition software:
The "8(a) Program" for Small Businesses
and ethnic groups are socially disadvantaged violates the constitutional guarantee of equal
protection. A separate report, CRS Report R43573, Federal Contracting and Subcontracting with
Small Businesses: Legislation in the 113th Congress, by Kate M. Manuel, discusses recently
enacted or introduced legislation regarding the 8(a) Program.
Historical Development
Origins of the 8(a) Program
The current 8(a) Program resulted from the merger of two distinct types of federal programs:
those seeking to assist small businesses in general and those seeking to assist racial and ethnic
minorities. This merger first occurred, as a matter of executive branch practice, in 1967 and was
given a statutory basis in 1978.
Federal Programs for Small Businesses
Congress first authorized a federal agency to enter into prime contracts with other agencies and
subcontract with small businesses for the performance of these contracts in 1942. The agency was
the Smaller War Plants Corporation (SWPC), which was created partly for this purpose, and
Congress gave it these powers in order to ameliorate small businesses' financial difficulties while
also "mobiliz[ing] the productive facilities of small business in the interest of successful
prosecution of the war."' The SWPC's subcontracting authority expired along with the SWPC at
the end of the World War II. However, in 1951, at the start of the Korean War, Congress created
the Small Defense Plants Administration (SDPA), which was generally given the same powers
that the SWPC had exercised.9 Two years later, in 1953, Congress transferred the SDPA's
subcontracting authorities, among others, to the newly created Small Business Administration,10
with the intent that the SBA would exercise these powers in peacetime, as well as in wartime.11
When the Small Business Act of 1958 transformed the SBA into a permanent independent
agency, this subcontracting authority was included in Section 8(a) of the act.'2 At its inception,
the SBA's subcontracting authority was not limited to small businesses owned and controlled by
the socially and economically disadvantaged. Under the original Section 8(a), the SBA could
contract with any "small-business concerns or others,"" but the SBA seldom, if ever, employed
this subcontracting authority, focusing instead upon its loan and other programs.'4
8 Small Business Mobilization Act, P.L. 77-603, 4(f), 56 Stat. 351 (June 11, 1942).
9 Act of July 31, 1951, P.L. 82-96, 110, 65 Stat. 131.
10 P.L. 83-163, 207(c)-(d), 67 Stat. 230 (July 30, 1953).
" See, e.g., H.Rept. 494, 83rd Cong., 1st sess., at 2 (1953) (stating that the SBA would "continue many of the functions
of the [SDPA] in the present mobilization period and in addition would be given powers and duties to encourage and
assist small-business enterprises in peacetime as well as in any future war or mobilization period"); S.Rept. 1714, 85th
Cong., 2nd sess., at 9-10 (1958) (stating that the act would "put[] the procurement assistance program on a peacetime
basis").
12 P.L. 85-536, 8(a)(1)-(2), 72 Stat. 384 (July 18, 1958).
13 Id.
14 Thomas Jefferson Hasty, III, Minority Business Enterprise Development and the Small Business Administration's
8(a) Program: Past, Present, and (Is There a) Future? 145 Mil. L. Rev. 1, 8 (1994) ("[B]ecause the SBA believed that
the efforts to start and operate an 8(a) program would not be worthwhile in terms of developing small business, the
(continued...)Congressional Research Service
2
c11173008
Upcoming Pages
Here’s what’s next.
Search Inside
This report can be searched. Note: Results may vary based on the legibility of text within the document.
Tools / Downloads
Get a copy of this page or view the extracted text.
Citing and Sharing
Basic information for referencing this web page. We also provide extended guidance on usage rights, references, copying or embedding.
Reference the current page of this Report.
Manuel, K. M. The “8(a) Program” for Small Businesses Owned and Controlled by the Socially and Economically Disadvantaged: Legal Requirements and Issues, report, November 26, 2014; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc806963/m1/6/: accessed June 6, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.