SBA OHA rejects appeal of company’s termination from 8(a) over disadvantage narrative rejections

In CTS Group LLC (SBA No. BDPT-621), CTS Group appealed its termination from the SBA's 8(a) Business Development program, which occurred after their owner failed to adequately demonstrate individual social disadvantage through multiple social disadvantage narrative (SDN) submissions. Despite receiving multiple opportunities to revise their SDN between September 2023 and March 2024, and guidance from the SBA on improving their submissions, CTS Group's final narrative failed to establish that their owner suffered chronic and substantial social disadvantage as required by regulations. The appeal was ultimately denied by SBA’s Office of Hearings and Appeals on 29 April 2025.

• Background: After the Ultima decision, SBA required all 8(a) participants who had previously relied on the presumption of social disadvantage to submit Social Disadvantage Narratives (SDNs) to maintain program eligibility.
• Petitioner's arguments: CTS Group argued that SBA failed to provide adequate feedback on their final SDN submission and didn't give them proper opportunity to address deficiencies before termination.
• SBA's position: The agency maintained that the submitted SDNs failed to demonstrate chronic and substantial social disadvantage as required by regulations, and that they had no obligation to provide ongoing guidance.
• Court's finding: The appeal was denied, with OHA determining that the SBA's termination decision was neither arbitrary, capricious, nor contrary to law.

The case establishes that SBA is not required to provide detailed guidance on SDN submissions, placing the burden on participants to adequately document their claims of social disadvantage.