Report 16-13: SBA’s 8(a) Business Development Program Eligibility

OIG's Audit Report 16-13, SBA’s 8(a) Business Development Program Eligibility, presents the results of our audit of the Small Business Administration’s (SBA) 8(a) Business Development Program Eligibility [8(a) Program].  The 8(a) Program provides economically and socially disadvantaged, small business owners with business development assistance and preference-based Federal contracts. 

Thirty of the 48 8(a) Program applicants we evaluated did not meet one or more areas of eligibility, based on information in the Business Development Management Information System (BDMIS).  The director of the Office of Certification and Eligibility 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 fully documenting in BDMIS 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.  As new management works to improve the program, we encourage SBA management to ensure the documentation supporting 8(a) Program application approvals is maintained in a method ensuring clear eligibility of the applicant.  OIG made two recommendations to improve SBA’s eligibility determination process for the 8(a) Program.  SBA management’s planned actions resolve these recommendations.