8(a) | The Contracting Education Academy

April 14, 2016 By AMK

SBA gets 8(a) applications right only 37% of the time in sample by OIG

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.

In an examination of applications for the 8(a) Program by the SBA’s Inspector General, 30 of 48 applicants did not meet one or more areas of eligibility,

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

October 30, 2015 By AMK

SBA watchdog warns of IT security risks, poor data in contracting goals

The Small Business Administration (SBA) has made solid headway in addressing most of its 10 major management and performance challenges, but took a step backward on information technology security, its inspector general reported.

SBA also falls short in verifying data and toughening enforcement to curb the number of large companies that improperly win contracts intended for small businesses, according to a report and score card released Oct. 15.

Noting that recent governmentwide security breaches have “heightened the importance of continuously monitoring networks and software applications,” the IG and an external auditor identified IT security “weaknesses when on-boarding and separating SBA personnel,” the report said. The agency lost ground over the past year in implementing such recommendations as reporting IT security weaknesses, segregating duty controls and assuring that “access controls are in place and operating effectively, and contractors are not granted system access until they have obtained the required background investigations and/or security clearances.”

On the SBA-led governmentwide effort to award 23 percent of all prime contracts to qualified small businesses, the score card provides ammunition to outside critics who argue that too many large firms are siphoning off contract set-asides.

Keep reading this article at: http://www.govexec.com/oversight/2015/10/sba-watchdog-warns-it-security-risks-poor-data-contracting-goals/122919

April 2, 2015 By AMK

Push is on for analysis of approval process required of 8(a) Native American sole-source contracts

Alaskan Congressman Don Young is enlisting a bipartisan group in the House of Representatives to urge Secretary of Defense Ash Carter to swiftly and diligently complete a Department of Defense (DOD) study examining the negative impacts of Section 811 of the Fiscal Year 2010 National Defense Authorization Act (NDAA) on Native community owned contractors.

“The 8(a) program has been extremely successful in creating an efficient and cost effective contracting option for the government while supporting economic opportunity for some of the most disadvantaged and underemployed populations in the nation,” said Congressman Young. “Since Senator Stevens left the Senate, Native contractors have been under constant attack. Section 811 was snuck into the 2010 NDAA negotiations by the Senate, and ever since then I have repeatedly heard about the confusion, difficulty and damage this Act has caused to our Native contractors.”

Section 811 requires that any 8(a) Native American sole-source contract, in excess of $20 million, go through an overly burdensome approval process. While the measure was sold as a “good governance” provision and did not prohibit or discourage the awarding of such contracts, this heightened scrutiny, not required for any other contractors, has had a chilling effect for contracts.

Keep reading this article at: http://alaska-native-news.com/young-pushes-for-analysis-on-negative-impacts-of-section-811-on-native-owned-contractors-16415

January 9, 2015 By AMK

Former security contractor CEO agrees to pay $4.5 million to settle civil claims

Keith Hedman, 55, of Arlington, Virginia, the former chief executive officer of a Virginia-based security contracting firm, Protection Strategies, Inc. has agreed to pay $4.5 million to settle civil claims relating to his involvement in a fraudulent scheme to create a front company to obtain contracts through the Small Business Administration’s Section 8(a) program. The Section 8(a) program allows qualified small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, made the announcement after the settlement agreement was signed by both parties. “The civil settlement illustrates the importance of not stopping at a criminal resolution when a defendant has pled guilty to fraud against the government,” said U.S. Attorney Boente.

The settlement resolves civil claims against Hedman relating to the criminal plea entered by him in U.S. v. Hedman,1:13cr74. According to court records, in or about 2001 Hedman formed PSI, which was approved to participate in the 8(a) program based on the 8(a) eligibility of its listed president and CEO, an African-American female. When the listed president and CEO left PSI in 2003, Hedman became its sole owner, and the company was no longer 8(a)-eligible.

Keep reading this article at: http://www.alexandrianews.org/former-security-contractor-ceo-agrees-to-pay-4-5-million-to-settle-civil-claims/

October 16, 2014 By AMK

The small-business conundrum

Recent news reveals that federal agencies overstated their success last year in contracting with small businesses that face socioeconomic disadvantages. It turns out that the Small Business Administration’s inspector general identified over $400 million of contract actions awarded to ineligible firms, thus overstating SB goaling performance in FY13.

Download the IG report here.

While reasons for misreporting are one issue, the perennial issue of meeting SB goals persists. Some people joke that when an agency fails to meet their SB target, the response is to increase it. Does goal setting work? Everyone agrees with fundamental ideals of small entrepreneurs and businesses bringing fresh ideas, outlooks, and solutions to government and societal problems.

Keep reading this article at: http://www.federaltimes.com/article/20141008/BLG06/310080012/The-small-business-conundrum

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 Small Business Administration (SBA) has made solid headway in addressing most of its 10 major management and performance challenges, but took a step backward on information technology security, its inspector general reported.

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