On Friday, September 29, 2023, the federal government issued its response to Ultima Services Corporation’s filing from September 15th in the ongoing Ultima case. To recap, in its September 15th submission, Ultima Services Corporation had requested the court to take several actions:
1. Enjoin the federal government from utilizing the 8(a) program in the administrative and technical support industry, which includes NAICS Codes 541611 (Administrative Management and General Management Consulting Services), 561110 (Office Administrative Services), and 561320 (Temporary Help Services).
2. Either appoint a monitor to assess the Small Business Administration’s (SBA) certification of 8(a) program participants who had previously benefited from the rebuttable presumption, or make public the narrative essays of social disadvantage (along with the SBA’s decisions regarding each case) with appropriate redaction of personal information.
3. Immediately and temporarily halt the federal government from awarding, modifying, or exercising options on any 8(a) contracts involving 8(a) entities that entered the program based on the rebuttable presumption until the District Court resolves Ultima’s new request for equitable relief.
In response, the federal government strongly contested Ultima’s motion, arguing that it lacked a factual or legal basis. The government emphasized that Ultima’s requested remedy would extend beyond the scope of its alleged harm and affect 8(a) entities that did not rely on the rebuttable presumption for program entry, including Tribes and Alaska Native Corporations.
The federal government took a firm stance against Ultima’s request to enjoin the use of the 8(a) Program in the administrative and technical support industry, arguing that Ultima could not demonstrate entitlement to an injunction against a program that did not employ a race-based presumption or classification. Furthermore, it pointed out that Ultima had not shown any discernible harm from an 8(a) program that operated without the use of a rebuttable presumption.
The government also highlighted that Ultima’s requested order would impact Alaska Native Corporations and Indian Tribes that had never relied on the rebuttable presumption, which would extend far beyond Ultima’s stated injury.
Regarding Ultima’s concerns about how the SBA determines social disadvantage, the federal government clarified that the SBA is assessing submissions under the “preponderance of the evidence standard” and that all social disadvantage determinations had been made using the same standard for applicants not belonging to designated groups entitled to the presumption.
The government responded to Ultima’s assertion that the District Court’s injunction prevented federal agencies from exercising options on contracts awarded before the injunction date by referring to the Federal Acquisition Regulations (FAR), stating that it adhered to the FAR’s guidelines.
The federal government also voiced strong objections to Ultima’s request for the appointment of a monitor to oversee the SBA’s social disadvantage determinations or to bar the SBA from making such determinations, arguing that Ultima had not challenged the SBA’s application of the regulation requiring proof of social disadvantage.
In addition, the government objected to Ultima’s alternative request to make social disadvantage narratives public, citing privacy concerns and the potential deterrent effect on small business owners.
Lastly, the federal government argued that Ultima’s motion for an order barring the federal government from completing additional reviews of social disadvantage narratives had no basis in the court’s order and would unfairly impact minority-owned businesses.
Ultima’s reply brief is scheduled for submission on October 5, 2023. Stay tuned for further updates on this evolving legal case. Please note that this article is a summary of legal proceedings and should not be considered legal advice.
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