The Small Business Administration (SBA) is failing to adequately screen the eligibility of small businesses applying for the federal government’s longest-standing contract preference program.
The Office of Inspector General’s (OIG’s) Audit Report 16-13, SBA’s 8(a) Business Development Program Eligibility, presents the results of the OIG’s audit of the 8(a) Program. The 8(a) Program provides economically and socially disadvantaged, small business owners with business development assistance and preference-based Federal contracts.
SBA’s Director of the Office of Certification and Eligibility (OCE) and the Associate Administrator for Business Development (AA/BD) gathered additional information for 18 firms and, based on this information, approved the firms into the 8(a) Program. However, for the remaining 30 firms, the AA/BD approved the firms without full documentation in the agency’s Business Development Management Information System (BDMIS) on how all areas of concern regarding eligibility raised by lower-level reviewers were resolved. As a result, it was not clear whether these 30 firms should have been approved into the 8(a) Program.
During the past year within SBA, the 8(a) Program has experienced a change in leadership, identified an aggressive growth plan for the coming years, began testing a streamlined application process, and shifted responsibilities for continuing eligibility reviews. In its report to SBA leadership, the OIG encourages management to ensure the documentation supporting 8(a) Program application approvals is maintained in a method ensuring clear eligibility of the applicant.
The OIG made two specific recommendations to improve SBA’s eligibility determination process for the 8(a) Program:
- Update policy to require the AA/BD and OCE’s director to clearly document their justification for approving or denying applicants into the 8(a) Program, particularly when those decisions differed from lower-level recommendations.
- Provide documentation on how eligibility concerns raised by lower-level reviewers were resolved for the 30 firms not documented in BDMIS by April 11, 2016.
A copy of the full report by the SBA’s OIG can be found here: https://www.sba.gov/sites/default/files/oig/16-13_SBAs_8a_Business_Development_Program_Eligibility.pdf