IMPACT NEWS

Tennessee Court declares Disadvantage Based on Race Violates 5th Amendment
Published July 21st 2023  Arnold Huff ahuff@govmarkassoc.com

On July 19th 2023, the Tennessee District Court has enjoined the operation of the race conscious presumption for the 8(a) program nationwide. Unfortunately, my initial read is that it essentially eliminates the presumption of race as a basis of disadvantage in 8(a) set-asides.
 
 Ultima Services Corp v Department of Agriculture 
“The Court DECLARES that Defendant’s use of the rebuttable presumption violates Ultima’s Fifth Amendment right to equal protection of the law. It is ORDERED that Defendants are ENJOINED from using the rebuttable presumption of social disadvantage in administering Defendant SBA’s 8(a) program.”
 
The “rebuttable presumption” is a particular rule of law that may be inferred from the existence of a given set of facts and that is conclusive absent contrary evidence. In this case, it is the inclusion of a business owner in a specified set of racial/ethnic groups being the basis of “socially disadvantaged.” Therefore, simply being in one of those designated race classifications cannot be used as a presumption of disadvantage.
Case 2:20-cv-00041-DCLC-CRW   Document 86

Attracting Small Businesses
Executive Order 14091, “Further Advancing Racial Equity and Support for Underserved Communities Through the Federal Government”

Executive Order 14091, titled “Further Advancing Racial Equity and Support for Underserved Communities Through the Federal Government,” represents a pivotal step toward creating a more inclusive and equitable economic landscape in the United States. Signed into effect on February 16, 2023, by President Joe Biden, this executive order builds upon previous initiatives aimed at addressing systemic inequities and ensuring that the benefits of federal policies and programs are accessible to all Americans, particularly small businesses in underserved communities.
The Foundation of Executive Order 14091Executive Order 14091 is part of a broader effort by the Biden administration to promote equity and inclusion across various sectors of society. This initiative acknowledges the historical and ongoing disparities faced by racial and ethnic minorities, women, LGBTQ+ individuals, people with disabilities, and other marginalized groups. The order mandates federal agencies to take deliberate actions to dismantle barriers and create opportunities for these communities.
Key Provisions and Goals
The executive order outlines several critical provisions aimed at promoting racial equity and supporting underserved communities. These include:

1. Equity Action Plans: Federal agencies are required to develop and implement Equity Action Plans. These plans must identify barriers to accessing agency programs and services and outline strategies to remove these barriers. The goal is to ensure that federal resources are distributed more equitably and effectively.
2. Data Collection and Transparency: The order emphasizes the importance of collecting, analyzing, and reporting data on the effectiveness of equity initiatives. This data-driven approach allows for greater transparency and accountability, enabling the federal government to measure progress and make necessary adjustments.
3. Support for Small Businesses: Recognizing the crucial role of small businesses in economic growth and job creation, the order directs federal agencies to increase support for small businesses in underserved communities. This includes improving access to federal contracts, grants, and loans.
4. Community Engagement: The order encourages federal agencies to engage directly with underserved communities. This involves soliciting feedback, understanding unique challenges, and co-developing solutions that address specific needs.

Attracting Small Businesses through Federal Support
Small businesses are the backbone of the American economy, and their success is vital for the prosperity of local communities. However, small businesses in underserved areas often face significant challenges, including limited access to capital, fewer networking opportunities, and less access to federal procurement contracts. Executive Order 14091 aims to mitigate these challenges through several mechanisms:
Access to Capital and Resources
One of the primary barriers for small businesses, particularly those owned by minorities and women, is access to capital. Executive Order 14091 directs federal agencies to enhance their support for Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs). These institutions are critical in providing financial services to underserved communities. By strengthening these institutions, the executive order helps ensure that small businesses have access to the funding they need to grow and thrive.
Federal Contracting Opportunities
The federal government is one of the largest purchasers of goods and services in the world. Executive Order 14091 seeks to level the playing field by increasing the participation of small businesses from underserved communities in federal procurement. Agencies are tasked with identifying and eliminating barriers that prevent these businesses from competing for federal contracts. This includes simplifying the application process and providing technical assistance to help small businesses navigate the complexities of federal procurement.
Capacity Building and Technical Assistance
In addition to financial support, small businesses often require technical assistance and capacity-building resources. Executive Order 14091 emphasizes the need for federal agencies to provide training, mentorship, and other resources to help small businesses enhance their capabilities. This support can be instrumental in helping small businesses scale up, improve their operations, and compete more effectively in the marketplace.
Community Partnerships and Networking Building strong networks and partnerships is crucial for small business success. The executive order encourages federal agencies to foster collaborations between small businesses and other stakeholders, including large corporations, non-profits, and community organizations. These partnerships can create new opportunities for small businesses to access markets, share resources, and gain valuable insights.
Conclusion
Executive Order 14091 represents a comprehensive approach to promoting racial equity and supporting underserved communities through federal actions. By focusing on key areas such as access to capital, federal contracting, capacity building, and community partnerships, the executive order aims to create a more inclusive and equitable economic landscape. Small businesses in underserved communities stand to benefit significantly from these initiatives, leading to broader economic growth and prosperity.
As federal agencies implement the provisions of Executive Order 14091, continuous engagement with stakeholders and rigorous evaluation of outcomes will be essential. By fostering an environment where all small businesses can thrive, the United States takes a significant step toward achieving true economic equity and inclusivity.

The Current Impact of the US Congress on Minority-Owned Businesses in the United States
Published June 5th 2023  Arnold Huff ahuff@govmarkassoc.com

In recent years, minority-owned businesses in the United States have become crucial drivers of economic growth and job creation. Recognizing their significance, the US Congress has undertaken various initiatives to support and uplift these enterprises. Through legislation and policy efforts, lawmakers have sought to address the historical disparities faced by minority entrepreneurs and foster an inclusive economic environment. However, the effectiveness and overall impact of these efforts remain subjects of debate.

One significant development in support of minority-owned businesses was the introduction of the Minority Business Development Agency (MBDA) within the Department of Commerce. The MBDA's primary mission is to promote the growth and competitiveness of minority-owned businesses through targeted resources, technical assistance, and access to capital. The US Congress has played a vital role in allocating funding for MBDA programs, enabling them to reach more minority entrepreneurs and provide critical support during their early stages of growth.

Furthermore, lawmakers have implemented legislation to promote diversity and inclusion in government contracts. The Small Business Act of 1953 and the subsequent amendments have stipulated that a portion of government contracts be awarded to small disadvantaged businesses, including those owned by minorities. This affirmative action aims to level the playing field and increase opportunities for minority-owned enterprises to compete for lucrative government contracts.

Moreover, the US Congress has actively supported access to capital for minority entrepreneurs through legislation like the Community Reinvestment Act (CRA). The CRA encourages banks to invest in low- and moderate-income communities, increasing the availability of loans and financial resources for minority-owned businesses. Additionally, various federal agencies have established grant and loan programs specifically targeted at minority entrepreneurs, providing them with much-needed capital to expand their ventures.

Despite these positive steps, challenges persist for minority-owned businesses. For instance, many minority entrepreneurs still face difficulties in accessing traditional bank loans due to stringent lending criteria. While the US Congress has taken measures to improve access to capital, ongoing efforts are required to ensure that these resources reach the intended recipients.

Furthermore, issues such as systemic racism and implicit biases in various sectors continue to hinder the growth of minority-owned businesses. Addressing these deep-rooted problems requires comprehensive legislative solutions, proactive enforcement of existing anti-discrimination laws, and fostering a culture of diversity and inclusion in the business community.

In conclusion, the US Congress has made significant strides in supporting minority-owned businesses through various initiatives and legislation. The establishment of the MBDA, promotion of diversity in government contracts, and increased access to capital are commendable efforts in fostering an inclusive economic environment. However, challenges such as access to capital and systemic barriers still persist, necessitating continued legislative efforts and a commitment to addressing deep-seated issues. By doing so, the US Congress can create a more equitable and prosperous business landscape for minority entrepreneurs, positively impacting not only their businesses but also the overall economy.