U.S. District Court Judge Gerhard A. Gesell has ordered the Small Business Administration to permanently reinstate a Bethesda research firm headed by a white woman into its 8(a), set-aside contracting program for socially or economically disadvantaged business owners.
Marilyn Andrulis, who owns 51 per cent of Andrulis Research Corp., was dropped last September from the program, under which her firm had secured about $500,000 in Defense Department contracts, and reinstated temporarily at Gesell's order two months later.
The Andrulis firm, 49 per cent of which is owned by Dr. Andrulis' husband, was dropped from the 8(a) program after the SBA reconsidered and decided that she was not disadvantaged. The notification came during a review of all 8(a) companies sparked by hearings that uncovered alleged abuses of the program. Marilyn Andrulis had contended that, as a woman in the "fraternal, male environment of defense contracting," she was, in fact, socially disadvantaged.
SBA and Andrulis recently reached an agreement under which her firm would be reinstated in the program, an agreement Gesell embodied in a consent agreement.
His order noted that any grounds used to terminate the Andrulis firm as a contractor would have to be applied consistently by SBA to all 8(a) firms.
Gesell had found earlier that Andrulis' contracting eligibility was taken away from her with no notice and without adequate hearing or established standards. SBA administrators in the past have openly declared that they believe white woman are in no sense economically or socially disadvantaged as a class. The contracts are set aside largely for business owners who belong to racial minorities.
Andrulis said yesterday that SBA has effectively admitted . . . that it will consider sex discrimination experienced by a woman in developing and maintaining a business as a justifiabel criterion for eligibility to participate in the 8(a) program."
While it is unclear what effect the Andrulis ruling may have on the eligibility of other white woman for 8(a) contracts, SBA Deputy Administrator Patricia M. Cloherty said yesterday that the agency is "very pleased that (the case) is settled." She said SBA would "continue to admit people (to the 8(a) program) on an individual basis, irrespective of race, sex, religion and other distinguishing characteristics. That's the way the program is supported to be administered."
Out of 1,400 firms eligible for the set-aside contracts, which are awarded out of the mainstream of competitve bidding, nearly 50 firms are headed by women, Cloherty said. Of those, eight are headed by white woman, she said.