On August 29, 2023, the Department of Defense (“DoD”), the Civilian Agency Acquisition Counsel, and the Government Services Administration (“GSA”) took definitive steps to address the Small Business Administration’s (“SBA”) response to the constitutional concerns raised by the Ultima ruling. By issuing class deviations, they aim to navigate the prickly issue of a rebuttable presumption of social disadvantage application to certain groups – a practice ruled to be unconstitutional by the Ultima decree.
This decision comes in the wake of increasing debates around the constitutionality of certain actions and policies of federal agencies. The Ultima ruling, in particular, has been momentous due to the implications it has had on the operational guidelines of the SBA and its commitment towards fostering small businesses.
The primary concern hinges on the issue of constitutionality and social disadvantage. The SBA, in its regular operations, has often applied a rebuttable presumption of social disadvantage to certain groups. This practice, although aimed at fostering and promoting small businesses, was believed to contravene constitutional provisions, leading to the landmark Ultima ruling, which deemed this practice unconstitutional.
As part of their response, the DoD, the Civilian Agency Acquisition Counsel, and the GSA have issued these class deviations – a move that effectively challenges the SBA’s traditional stance on the social disadvantage presumption. By taking this decisive action, these organizations hope to address the findings of the Ultima ruling, tackling head-on the constitutional concerns that have been brewing for years.
These actions demonstrate the growing commitment of these entities to uphold, respect, and work in alignment with the constitutional framework that guides all operational aspects of governance, policy implementation, and public service. However, as with any bold and uncharacteristic action, how this move will shape the landscape of small businesses, and by extension the US economy, remains to be seen.
You can find more on the class deviations and the story surrounding the SBA’s response to the Ultima ruling here.
Contributions by: Schwabe, Williamson & Wyatt PC