The U.S. Small Business Administration announced a proposal to eliminate race as a criterion for individuals seeking entry into the 8(a) Business Development Program. The change, aimed at creating a more objective admissions process, would leave tribes and Alaska Native corporations untouched, but could reshape competition for federal contracts .

Race‑Based Admissions Replaced by Objective Standards

According to the SBA proposal, individuals will no longer be classified as socially disadvantaged on the basis of race, shifting to a metric that relies on documented socioeconomic hardship. the agency says the move is intended to “dismantle the past’s race‑based addmissions framework” and adopt an evidence‑based approach.

Native Entities Remain Eligible Under the New Rule

The rule explicitly preserves eligibility for tribes, Alaska Native corporations, and Native Hawaiian organizations, which have historically benefited from the 8(a) program. This exemption means that collective entities can cotinue to compete for set‑aside contracts even as individual eligibility criteria tighten.

Potential Surge in 8(a) Firms and Contract Competition

The SBA estimates that the revised standards could increase the total number of 8(a) certified companies, intensifying competition for the limited pool of 8(a) contracts. Analysts warn that a larger applicant base may dilute contract awards for existing participants, especially smaller Native firms.

Native Contractors Voice Concern Over Program Slowdown

Haven Harris , board co‑chair of the Native American Contractors Association, warned that the proposal could exacerbate a “slowdown of the program” and accelerate the government’s push to streamline awards .. He added that recent dialogues with SBA leadership have been constructive, suggesting a possible avenue for mitigation.

Who Will Decide the Final Rule?

The proposed rule is open for public comment, and the final decision will rest with the SBA after reviewing stakeholder feedback. As the agency balances DEI goals with calls for a merit‑based system, the outcome will likely set a precedent for other federal contracting programs.