Who is a Socially Disadvantaged Individual?
For purposes of the 8(a) Program, socially disadvantaged individuals are those who have been subjected to racial, ethnic prejudice or cultural bias within the American society because of their identities as members of groups and without regard to their individual qualities. The social disadvantage must stem from circumstances beyond their control.
The SBA presumes that members of SBA “designated groups” are socially disadvantaged, and consequently, if you are recognized as a member of one of these groups, you will be “spared” from having to complete a Social Disadvantage Narrative. The following individuals are presumed to be socially disadvantaged for 8(a) certification purposes:
Black Americans, Hispanic Americans, Native Americans (American Indians, Eskimos, Aleuts, or Native Hawaiians), Asian Pacific Americans (persons with origins from Burma, Thailand, Malaysia, Indonesia, Singapore, Brunei, Japan, China, Taiwan, Laos, Cambodia (Kampuchea), Vietnam, Korea, The Philippines, U.S. Trust Territory of the Pacific Islands (Republic of Palau), Republic of the Marshall Islands, Federated States of Micronesia, the Commonwealth of the Northern Mariana Islands, Guam, Samoa, Macao, Hong Kong, Fiji, Tonga, Kiribati, Tuvalu, or Nauru); or Subcontinent Asian Americans (persons with origins from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives Islands or Nepal).
Being born in a country does not by itself, suffice to make the birth country an individual’s country of origin for purposes of being included within a designated group. An individual must demonstrate that he or she has held himself or herself out, and is currently identified by others, as a member of their designated group if the SBA requires it. Native Americans and Hispanics with Anglo-names can expect their inclusion in their respective “designated groups” to be challenged, from time-to-time.
What if I am not a Member of an SBA “Designated Group?
If you are an individual who is not a member of the groups presumed to be socially disadvantaged defined by the SBA, you must establish your individual social disadvantage by a “preponderance of the evidence”.
The “preponderance of the evidence” is a standard of proof in civil law cases, that is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it. That is, evidence which as a whole shows that the fact (in this case your “social disadvantage”) sought to be proved is more probable than not.
What generic evidence do I have to provide to prove my Social Disadvantage?
Evidence that you must provide of your individual social disadvantage must include the following:
- At least one objective distinguishing feature that has contributed to your disadvantage, such as race, ethnic origin, gender, handicap, long-term residence in an environment isolated from the mainstream of American Society, or other similar causes not common to individuals who are not socially disadvantaged.
- Personal experiences of substantial and chronic social disadvantage in American Society, not in other countries, and;
- Negative impact on entry into or advancement in the business world because of the disadvantage. SBA will consider any relevant evidence in assessing this element. In every case, however, SBA will consider education, employment and business history, where applicable, to see if the totality of circumstances shows disadvantage in entering into or advancing in the business world.
- Education. SBA considers such factors as denial of equal access to institutions of higher education, exclusion from social and professional association with students or teachers, denial of educational honors rightfully earned, and social patterns or pressures, which discouraged the individual from pursuing a professional or business education.
- Employment. SBA considers such factors as unequal treatment in hiring, promotions and other aspects of professional advancement, pay and fringe benefits, and other terms and conditions of employment; retaliatory or discriminatory behavior by an employer; and social patterns or pressures which have channeled the individual into nonprofessional or non-business fields.
- Business history. SBA considers such factors as unequal access to credit or capital, acquisition of credit or capital under commercially unfavorable circumstances, unequal treatment in opportunities for government contracts or other work, unequal treatment by potential customers and business associates, and exclusion from business or professional organizations.
How Do I Go About Preparing the Required Social Disadvantage Narrative?
We recognize that most clients are not social scientists or civil rights attorneys, and really don’t know how to go ahead and prove something as complex and elusive as their “social disadvantage”. However, most clients can remember those hurtful, embarrassing and unfortunately sad experiences that have plagued minority and women business owner’s due to the lingering prejudices and bias that persist in today’s business environment. Consequently, our approach is to “jog-your-memory” concerning these experiences in each of three areas that the SBA requires that you consider in providing meaningful examples of the prejudice or bias that has affected your business life. These areas are:
- Education
- Employment
- Business History
The way to “jog-your-memory” is to ask you questions under each of the above areas regarding whether or not you have been negatively affected by the prejudiced or biased actions of other individuals or institutions. If you answer YES to any of these questions, then ask you to select the “nature” of this prejudice or bias. For SBA purposes, the “nature” categories include:
- Cultural Bias
- Ethnic Prejudice
- Gender Prejudice
- Handicapped Prejudice
- Racial Prejudice
- Residential Prejudice
Each of these categories are defined for you below.
The incidents you provide MUST have allegedly occurred because of the prejudices outlined above and described below. Please keep in mind that the SBA will not accept the justification that you have been discriminated against because you are a small business and “can’t compete with the big guys.” Furthermore, you cannot claim that you (or your firm) are being discriminated against because you are not 8(a) certified. All incidents must connect back to your “distinguishing feature,” whether it is your race, gender, ethnicity, handicap, or culture.
How Do I Document My Social Disadvantage?
The social disadvantage narrative requires that you record and describe, in detail, your personal experiences stemming from the form(s) of prejudice or bias that you identified. These experiences must have been experienced in American Society, and be substantial and chronic. Only one major negative experience is necessary to convince the SBA that you have been subjected to unfair social disadvantages, but it must be accompanied by a convincing narrative. You must provide at least the following information:
- Dates or periods involved
- Names of persons and/or entities involved
- Description of the specific instances or experiences
- Description of the specific actions taken by you
- Description of the actions taken by the initiator of prejudice/bias
- Identification of the specific negative impact on your business
Do not be hesitant to name persons or companies or to use precise wording of what you were told or heard, despite its tastelessness. The SBA requires specific details, but will not generally investigate your claims. Most of all, be truthful and be prepared to back-up your claims.
OK, i’ve recalled my experiences, but what type of evidence of my claim will the SBA accept?
The SBA requires that you provide some form of physical evidence of your claim to be socially disadvantaged. The types of evidence, in descending order of “power” to convince the SBA of your claims include:
- Court or administrative findings of the prejudice or bias.
- Statements made under oath to an investigator or in a court or administrative proceeding that support your claim.
- Affidavits or certified statements by an applicant, which have specific recurring incidents of prejudice or bias over a significant period of time.
- Sworn affidavits or statements from independent third parties corroborating or supporting assertions made by you. documentary evidence, which corroborates your claims, such as:
- Personnel Records
- Payroll Records
- Rejections Letters on Job Applications
- Denials of Credit Applications
- Documents relating to rejected contract offers, i.e., bid abstracts, solicitations, etc.
- Contemporaneous records memorializing meetings, conversations, negotiations, telephone calls, etc.
- Documents setting forth company policies, which are alleged to be discriminatory
- Evidence which tends to show generalized patterns of discrimination against the group that you are associating with (e.g. Women, handicapped, etc.) or statistical data showing that businesses owned by persons in these groups are disproportionately underrepresented in your particular industry.
The SBA will consider any relevant evidence in assessing this element. In every case however, SBA will consider the experiences of the individual, where applicable, in education, employment, and business history to see if the totality of the circumstances shows disadvantage in entering into or advancing in the business world. Evidence relating to all three should be addressed, if applicable. Each applicable circumstance should demonstrate how it has affected the individual’s entrance into and advancement in the business world. The failure to establish disadvantage in any one or even two areas (i.e., education, employment, or business history) does not prevent an individual from meeting the negative impact requirement as long as the totality of the circumstances experienced by the individual demonstrates
such disadvantage.
Questions to ask yourself in each of the three areas:
Area – Education:
- Have you ever been denied admission to any school, college, or university because of your distinguishing feature?
- Have you ever been excluded from membership in any educational clubs, fraternities, or professional organizations because of your distinguishing feature?
- Did the school, college, or university that you attended seriously lack qualified teachers, staff, facilities, or equipment to the extent that it had a negative effect on the quality of your education?
- Have you ever been denied a scholastic honor or recognition only because of your distinguishing feature?
- Have you ever been denied a scholarship or other forms of financial support required to finance your education because of your distinguishing feature?
- Have you ever been channeled into a specific “learning track” because of your distinguishing feature?
- Have you been denied attendance or admission to any school, college or university because of your long-term residence in a community isolated from the mainstream of American Society?
- Have you ever been denied professional training in your work that has impaired your entry or advancement in your professional career, only because your management thought it would be a waste of time to train a person with your distinguishing feature?
- Have you ever been subjected to harassment in your educational environment such that it had a dramatic effect on your learning?
- Have you ever been subjected to extreme social pressures that have discouraged you from pursuing professional or higher education or selected career fields that would naturally prepare you for business ownership?
Area – Employment:
- Have you ever been denied access to mentoring, on-the-job training, apprenticeships, etc., required to gain the necessary skills to advance in your field, only because of your distinguishing feature?
- Have you ever been subjected to significant variations in salary from those of your equally qualified contemporaries because your distinguishing feature?
- Have you ever been unfairly denied salary increases, bonuses, or commissions?
- Have your fringe benefits been out of concert with your position, tenure, and other factors commonly applied to all employees, only because of your distinguishing feature?
- Have you ever been terminated for what you consider to be unjust reasons, based solely on your distinguishing feature?
- Have you ever been subjected to harassment in your work environment such that it had a dramatic effect on your job performance?
- Have you ever been subjected to a glass ceiling that kept you from advancing into management positions?
- Have you ever been excluded from participation in company groups or functions that a person of your level would otherwise have been included?
- Have you ever been subjected to unfair or inequitable performance evaluations or merit reviews that had a negative impact on your professional progression?
- Have you ever been denied employment opportunities on bases different than those applied to other non-socially disadvantaged individuals, such as being denied an interview or job only because of your distinguishing feature?
Area – Business History:
- Have you ever been denied access to contract bidding opportunities only because an opinion of your distinguishing feature?
- Have you ever been unfairly denied the award of a contract, due to factors only related to your distinguishing feature?
- Have you ever been unfairly kept from joining in teaming or subcontracting relationships because of your distinguishing feature?
- Have you ever been subjected to unfair negotiations because of your distinguishing feature?
- Have you ever been systematically excluded from access to facilities where business is normally conducted due to your distinguishing feature?
- Have you ever been unfairly excluded from participation in professional or business groups only because your distinguishing feature?
- Have you or your firm been unfairly characterized for unsatisfactory past performance?
- Have you unfairly been denied access to private sector or Government decision makers, contracting officers, or buyers only because they couldn’t see that your distinguishing feature could be qualified to have them waste their time talking to?
- Have you ever been unfairly denied access to the capital or credit necessary to operate and grow your business due to your distinguishing feature?
- Have you ever unfairly denied bonding, licenses, or leases necessary to operate and grow your business, only because the grantor thought that your distinguishing feature represented an unreasonable risk over male-owned companies for the same bond, license or lease?
If you answer YES to the above question, you must provide the following responses to each question.
- What were the dates or periods of time over which the above prejudice or bias persisted?
- Who are or were the person(s) and/or entities (i.e., organizations) involved and their respective positions or titles?
- Identify and describe the specific instances that you claim represent the substantial and chronic prejudice or bias you have identified above? Be very specific, using the “street language” that may have been used.
- What specific actions are being taken or were taken by you to overcome the effects of the prejudice or bias experienced by you or your company?
- Identify and discuss the specific negative impact (economic, loss of professional development, damage to your personal or company reputation) on you and/or your firm on the entry or advancement in the business world because of this disadvantage experienced by you. For example, the loss of revenue, profits or salary.
- What type of physical evidence (e.g. payroll records, a letter or two from a co-worker that observed the above incident) will you or can you provide to substantiate your claims of prejudice or bias?
- What additional facts do you consider relevant to claiming and/or evidencing the prejudice or bias that you claim? For example, were there other incidents involving others who may have been subjected to the same types of prejudice or bias as you?
DEFINITIONS
Cultural Bias – The unreasonable preference or inclination against an individual that inhibits the impartial or fair judgment of that individual. Causing an act or policy to be implemented that negatively affects that person’s ability to enter into and/or advance in the American Free Enterprise System. An irrational prejudice based on the individual’s normal social, behavior patterns, beliefs, religion, dress, or appearance, rather than on the merits of the individual related to the specific issues at hand.
Ethnic Prejudice – The unreasonable preference or inclination against an individual that inhibits the impartial or fair judgment of that individual. Causing an act or policy to be implemented that negatively affects that person’s ability to enter into and/or advance in the American Free Enterprise System. An irrational prejudice based on the individual’s national, linguistic, racial, religious, or cultural heritage rather than on the merits of the individual related to the specific issues at hand.
Gender Prejudice – The unreasonable preference or inclination against an individual that inhibits the impartial or fair judgment of that individual. Causing an act or policy to be implemented that negatively affects that person’s ability to enter into and/or advance in the American Free Enterprise System. An irrational prejudice based on the individual’s sexual identity rather than on the merits of the individual related to the specific issues at hand.
Handicapped Prejudice – The unreasonable preference or inclination against an individual that inhibits the impartial or fair judgment of that individual. Causing an act or policy to be implemented that negatively affects that person’s ability to enter into and/or advance in the American Free Enterprise System. An irrational prejudice based on the individual’s physical or mental disability rather than on the merits of the individual related to the specific issues at hand.
Racial Prejudice – The unreasonable preference or inclination against an individual that inhibits the impartial or fair judgment of that individual. Causing an act or policy to be implemented that negatively affects that person’s ability to enter into and/or advance in the American Free Enterprise System. An irrational prejudice based on the individual’s genetically-based physical appearance or skin pigmentation characteristics rather than on the merits of the individual related to the specific issues at hand.
Residential Prejudice – The unreasonable preference or inclination against an individual that inhibits the impartial or fair judgment of that individual. Causing an act or policy to be implemented that negatively affects that person’s ability to enter into and/or advance in the American Free Enterprise System. An irrational prejudice based on the individual’s birthplace, or current or previous geographical area of domicile or upbringing rather than on the merits of the individual related to the specific issues at hand.