Improvements Needed in SBA’s Oversight of 8(a) Continuing Eligibility Processes

Continuing eligibility processes with the objective to determine whether SBA’s oversight ensured 8(a) program participants met continuing eligibility requirements. The purpose of this program is to promote the business development and competitive viability of small business concerns owned and controlled by socially and economically disadvantaged people.

We found that SBA did not consistently identify ineligible firms in the 8(a) program and did not always act to remove firms it determined were no longer eligible for the program. In addition, SBA did not perform required continuing eligibility reviews when it received specific and credible complaints regarding firms’ eligibility and did not log all complaints. We found that 20 of 25 firms we reviewed should have been removed from the 8(a) program. These firms received $126.8 million in new 8(a) set-aside contract obligations in FY 2017 at the expense of eligible disadvantaged firms.

We made 11 recommendations to improve the overall management and effectiveness of 8(a) program continuing eligibility processes. Management either agreed or partially agreed to address these recommendations; however, six recommendations are pending resolution. The OIG will work with SBA management to resolve these recommendations through the audit follow-up process.