Samarth Barot

Summary The U.S. Small Business Administration (“SBA”) published a proposed rule on June 11, 2026, that would reshape how individually owned small businesses establish social disadvantage for purposes of the 8(a) Business Development program. The proposed rule would eliminate the longstanding rebuttable presumption that members of certain designated racial and ethnic groups are socially disadvantaged.

In December 2022, we discussed the passage of Section 5949 of the Fiscal Year 2023 National Defense Authorization Act (“NDAA”), which introduced prohibitions on certain semiconductor products and services from designated Chinese manufacturers. At the time, the statute’s scope remained unclear, particularly regarding whether the restrictions would apply only to federal sales or extend to contractor “use” of covered technologies, similar to Section 889’s Part B prohibition.

In our August 1 post, we discussed how companies that acquire government contractors can inherit the False Claims Act (“FCA”) exposure based on their targets’ cybersecurity violations. Now, the Department of Justice (“DOJ”) delivered another vivid real-world example: a $1.75 million settlement in which a private equity (“PE”) firm, Gallant Capital Partners LLC, was named jointly and severally liable for its portfolio company’s cybersecurity violations on a U.S. Air Force contract.