SBA Proposes Major Changes to 8(a) Program Eligibility Requirements

On June 11, 2026, the U.S. Small Business Administration (SBA) proposed significant changes to the 8(a) Business Development (BD) program's requirements for establishing social disadvantage in a new rule, "Reforms To Remove SBA's 8(a) Program's Rebuttable Presumption of Social Disadvantage for Individually Owned Firms Only; Reforms Do Not Impact Entity-Owned Firms." The proposed rule does not affect entity-owned businesses, including Alaska Native corporations and Tribal organizations, or individually owned firms currently participating in the program.

A New Test for Social Disadvantage

The centerpiece of the proposed rule is a new framework for determining social disadvantage. Under the proposal, any U.S. citizen could establish social disadvantage by showing:

1. The government or a private entity—such as a state, university, or corporation— discriminated against a racial, ethnic, or cultural group to which the individual belongs, or favored another group; and
2. That discrimination caused the individual material harm related to economic opportunity.

Examples of qualifying discrimination could include:

• Race-based quotas or hiring targets
• Unlawful diversity, equity, and inclusion (DEI) policies
• Unlawful affirmative action programs
• Policies that favored certain racial or ethnic groups over others

Applicants would also need to self-certify that:

• They were a member of the affected group at the relevant time; and
• They personally experienced material harm (for example, being denied access to a government program or opportunity).

Evidence supporting a claim could include public policies, government or corporate documents, court decisions, or official statements. The rule's commentary cites recent court decisions, including Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, 600 U.S. 181 (2023), and Ames v. Ohio Department of Youth Services, 605 U.S. 303 (2025), as examples of the types of discrimination that may be relied upon. Applicants would still need to satisfy the program's economic disadvantage requirements.

Notably, under the revised standard, individuals previously denied entry to the 8(a) program under the prior requirements may be able to qualify based on that earlier denial.

How the 8(a) Program Reached This Point

Congress created the 8(a) BD program under the Small Business Act of 1953 to support small businesses owned by socially and economically disadvantaged individuals and to help ensure they receive a fair share of federal contracting opportunities. The program sets a goal that at least 5% of federal contracting dollars each year go to small disadvantaged businesses. For decades, the program operated under a rebuttable presumption that certain racial and ethnic groups were socially disadvantaged. In Ultima Servs. Corp. v. United States Dep't of Agric., 683 F. Supp. 3d 745, 774 (E.D. Tenn. 2023), a federal court held that presumption unconstitutional. Following the Ultima decision, the SBA required firms admitted to the program under that presumption to provide a detailed narrative explaining their individual experiences with social disadvantage. The new rule would eliminate that narrative option as a way to establish social disadvantage.

Application Processing Delays

For nearly a year, the SBA has not processed 8(a) applications, leaving entry into the program at a standstill. The SBA has indicated that it may begin processing applications again after the new rule is finalized, a process that could take several months. In the meantime, applicants already waiting in the queue may need to update financial and other information that will be outdated by the time the SBA reviews their applications.

What Comes Next

The rule is currently in the proposal stage, and the SBA is seeking public comments before issuing a final version. The agency is also evaluating how the changes may affect applicants and current participants. Comments may be submitted through Regulations.gov until July 13, 2026.

If finalized, the rule would represent one of the most significant shifts in the 8(a) program's eligibility framework in decades, moving the program away from race-based presumptions toward a case-by-case standard based on documented discrimination and individual harm.

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Anne Marie Tavella is a partner in DWT's Anchorage office. For questions or more insights, please reach out to Anne Marie or another member of our government contracts and Federal Indian & Tribal law teams. To stay informed, sign up for our alerts.