The “8(a) Program” for Small Businesses Owned and Controlled by the Socially and Economically Disadvantaged: Legal Requirements and Issues Page: 7 of 34
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The "8(a) Program" for Small Businesses
Federal Programs for Minorities
Federal programs for minorities began developing at approximately the same time as those for
small businesses, although there was initially no explicit overlap between them. The earliest
programs were created by executive orders, beginning with President Franklin Roosevelt's order
on June 25, 1941, requiring that all federal agencies include a clause in defense-related contracts
prohibiting contractors from discriminating on the basis of "race, creed, color, or national
origin."'5 Subsequent Presidents followed Roosevelt's example, issuing a number of executive
orders seeking to improve the employment opportunities of members of various racial and ethnic
groups.16 These executive branch initiatives took on new importance after the Kerner
Commission's report on the causes of the urban riots of 1966 concluded that African Americans
would need "special encouragement" to enter the economic mainstream.'7
Presidents Lyndon Johnson and Richard Nixon laid the foundations for the present 8(a) Program
in the hope of providing such "encouragement." Johnson created the President's Test Cities
Program (PTCP), which involved a small-scale use of the SBA's authority under Section 8(a) to
award contracts to firms willing to locate in urban areas and hire unemployed individuals, largely
African Americans, or sponsor minority-owned businesses by providing capital or management
assistance. However, under the PTCP, small businesses did not have to be minority-owned to
receive subcontracts under Section 8(a).19 Nixon's program was larger and focused more
specifically on minority-owned small businesses.20 During the Nixon Administration, the SBA
promulgated its earliest regulations for the 8(a) Program. In 1970, the first of these regulations
articulated the SBA's policy of using Section 8(a) to "assist small concerns owned by
disadvantaged persons to become self-sufficient, viable businesses capable of competing
effectively in the market place."2 A later regulation, promulgated in 1973, defined
"disadvantaged persons" as including, but not limited to, "black Americans, Spanish-Americans,
oriental Americans, Eskimos, and Aleuts."22 However, the SBA lacked explicit statutory authority
for focusing its 8(a) Program on minority-owned businesses until 1978,23 although courts
(...continued)
SBA's power to contract with other government agencies essentially went unused. The program actually lay dormant
for about fifteen years until the racial atmosphere of the 1960s provided the impetus to wrestle the SBA's 8(a) authority
from its dormant state.").
15 Exec. Order No. 8802, 6 Federal Register 3,109 (June 25, 1941). Similar requirements were later imposed on non-
defense contracts. See Exec. Order No. 9346, 8 Federal Register 7,182 (May 29, 1943).
16 See, e.g., Exec. Order No. 10308, 16 Federal Register 12,303 (December 3, 1951) (Truman); Exec. Order No. 10557,
19 Federal Register 5,655 (September 3, 1954) (Eisenhower); Exec. Order No. 10925, 26 Federal Register 1,977
(March 6, 1961) (Kennedy); Exec. Order No. 11458, 34 Federal Register 4,937 (March 7, 1969) (Nixon).
17 Report of the National Advisory Commission on Civil Disorders 21 (1968).
18 See, e.g., Hasty, supra note 14, at 11-12.
19 See, e.g., Jonathan J. Bean, BIG GOVERNMENT AND AFFIRMATIVE ACTION: THE SCANDALOUS HISTORY OF THE SMALL
BUSINESS ADMINISTRATION 66 (2001).
20 See Exec. Order No. 1625, 36 Federal Register 19,967 (October 13, 1971).
21 13 C.F.R. 124.8-1(b) (1970).
22 13 C.F.R. 124.8(c) (1973).
23 S. Rep. No. 95-1070, 95th Cong., 2nd sess., at 14 (1978) ("One of the underlying reasons for the failure of this effort is
that the program has no legislative basis."); H.Rept. 95-949, 95th Cong., 2nd sess., at 4 (1978) ("Congress has never
extended legislative control over the activities of the 8(a) program, save through indirect appropriations, thereby
permitting program operations.... [The] program is not as successful as it could be.").Congressional Research Service
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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/m1/7/: accessed June 6, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.