In a memo release on July 10, 2009 the Office of Management and Budget ordered executive agencies to ignore two recent GAO decisions holding the HUBZone set-aside mandatory and entitled to preference over 8(a) and Veteran owned business set-asides. OMB ordered the agencies to follow "parity" regulations from SBA giving wqual treatment to all three programs. In doing so OMB relied only upon the GAO decisions and ignored, or was simply unaware of, the Hawaii district court and Ninth Circuit Court of Appeals decisions predating the GAO decisions in declaring the HUBZone set-aside as mandatory and entitled to a preference. The OMB memo can be seen here. Download District Court HUBZone decision. Court of appeals decision Download Cmiccafc.
I was involved in the Hawaii case and the SBA argued, contrary to its "parity" position that the HUBZone set-aside was mandatory under the Small Business Act. That position was upheld by the Ninth Circuit Court of Appeals. As a mandatory program under the Small Business Act, OMB and SBA do not have authority to change this to a program that is equal to 8(a) and SDVOB, no matter how beneficial those programs are. If there is a change, it has to come from Congress.
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