by GCP Team
Final Rule changes 8(a) eligibility standards while leaving key questions unresolved for applicants and current program participants.
Rather than meaningfully address the myriads of issues raised in the timely 114 comments, including GCP’s comment, the SBA received last month, the SBA has opted to barrel forward with its changes to the eligibility standards for all 8(a) program applicants, including those whose applications are pending. The SBA’s Final Rule, effective September 10, 2026, disposes of the rebuttable presumption (which has not been used since 2023) and the social disadvantage narrative. It authorizes 8(a) eligibility that is divorced from any kind of individualized harm or economic disadvantage, which was one of Congress’ guiding principles in establishing the program.
Instead, the SBA has authorized applicants to submit, and potentially be approved, for 8(a) participation where the applicant’s disadvantage, at most, can be said to be the “impact” to a group of which the applicant self-certifies their membership. The potential for fraud and abuse is significant, especially here where the SBA rejected GCP’s and other commenters’ proposal to retain the individual narrative requirement, which through individualized scrutiny would have safeguarded against these abuses.
Meanwhile, despite confirming yet again in the Final Rule that this rulemaking does not impact entity-owned firms’ eligibility, the SBA has failed to state affirmatively that it will reopen entity-owned applications immediately, much less offer an apology for ceasing such approvals since August of 2025. GCP has publicly called for the SBA to resume both entity-owned applications and individually-owned applications since the “freeze.”
While the SBA states that it is not its “intent” for the Final Rule to apply to current 8(a) participants, it did not address GCP’s concerns that the structure of the regulations, including those not involved in this rulemaking, require current 8(a) participants to certify as part of their annual review that the firm “meets the 8(a) BD program eligibility requirements as set forth in” multiple regulations, including 13 CFR § 124.103, which the SBA just changed. As many 8(a) participants may recall, the SBA required all 8(a) program participants to submit a social disadvantage narrative following the Ultima decision in 2023 to ensure the firms’ continued compliance with the regulations. Now, the SBA has taken a novel approach, and unfortunately, current 8(a) participants may be penalized through no fault of their own, solely due to the SBA’s rushed and haphazard approach.
The SBA did clarify that, despite removing language that has permitted individual-firm owners to apply for the 8(a) program due to gender-based and disability-based discrimination, the New Rule would permit these business owners to apply for the 8(a) program. At odds with this clarification, the SBA did not change the language of the Final Rule, which still states it applies to discrimination experienced by “racial, ethnic, or cultural group[s].” Further, SBA did not address GCP’s request that it provide a definition for the term “cultural group.”
In terms of what rises to “material harm” under the Final Rule, the SBA stated that it is “broader than the current regulatory scheme,” because it includes situations where a potential applicant took no action due to its interpretation of bias against his or her racial, ethnic, or cultural group. In other words, the SBA confirmed that the existence of “inherent barriers experienced by members” of racial, ethnic, or cultural groups will be imputed to the potential applicant, such that the potential applicant suffered a “material harm.”
Simply put, the Final Rule is extremely problematic and will cause much confusion for both the agency and potential applicants for the 8(a) program. The Final Rule will do nothing to address the SBA’s self-imposed suspension of processing 8(a) applications since August 15, 2025. Yet again, the SBA is its own worst enemy.
If you are a current 8(a) participant, or considering an application to the 8(a) program, please contact Anna Sanders to discuss your options and obligations under the soon to be Final Rule.
