U.S. District Judge Gerhard A. Gesell ordered the Small Business Administration yesterday to reinstate at least temporarily a Washington research firm headed by a white woman to a special minority government contract program.
The temporary reinstatement means the woman's firm will continue to be eligible for about $645,000 in government contracts awarded under the program.
Last summer, the SBA had ruled that Dr. Marilyn Andrulis, the 51 per cent owner of Andrulis Research Corp., was eligible for the program under which the SBA handles certain contracts for other government agencies in an attempt to spread them among minority groups.
However, in the middle of September the SBA notified Dr. Andrulis that she had been dropped from the program because she did not fit SBA's description of being socially or economically disadvantaged.
In issuing the temporary ruling yesterday. Gesell said the hearing that resulted in Dr. Andrulis' removal from the program was improper.
Gesell said that based on the limited hearing held before him yesterday in connection with a suit filed by Dr. Andrulis, her contract eligibility has taken away from her with no notice, no adequate hearing, and no established standards.
"The findings were submerged and kept out of sight," Gesell said. "That's not a hearing in the United States of America."
Dr. Andrulis said in her suit that her application for entrance into the SBA's minority contracting program passed all early tests within the agency. She said she was prepared to enter into actual contracts when she heard a "rumor" that she was being removed from the program.
Dr. Andrulis said she checked out the rumor and found out that it was true. A few days later, the SBA informed her that she had been removed from the program because she was a "nonminority," because her partner-husband also is nonminority, because her firm's problems are similar to other small research firms, because she and her husband are worth probably $200,000 or more, and because her sex did not deny her "social or economic contacts" necessary for her field.
Dr. Andrulis claims that, as a woman, she is a minority in her field of research, which includes projects as diverse as anticancer research and antisubmarine warfare. She also claims that the other criteria under which she was removed from the program were either inaccurate or not applied to other similar participants in the program.
She appealed the decision within the SBA, but her appeal was rejected at a hearing at which no transcript was kept.
Gesell said he would issue the temporary order yesterday because Dr. Andrulis's business would be irreparably harmed if she were not eligible for the contracts and because the probability was high that she would ultimately succeed in her suit.