Government Contracts Monitor

Short Take: SBA Releases Audit Report on 8(a) Eligibility Reconsiderations

April 26, 2016

Earlier this month, the SBA’s Office of the Inspector General released an audit report detailing findings regarding SBA determinations of eligibility for the 8(a) Business Development Program. Ensuring good performance in this area is critically important because Government contracting officers rely on the SBA’s eligibility determination process to ensure that an 8(a) contractor will be able to perform. Of course, 8(a) applicants also count on the SBA to make the “right” decision concerning their applications.

In the audit report, the OIG analyzed 48 cases in which contractors were accepted into the 8(a) program after initially having been rejected at a lower level within the SBA. Of the 48 contractors ultimately found eligible for the program, OIG found that 30 did not appear clearly eligible based on documents and notes in the SBA’s automated application document management system. For 16 of those 30 applicants, the decision making authority partially resolved eligibility concerns raised by lower level reviews, and for the remaining 14, no resolution of the eligibility concerns was provided.

The SBA’s Office of Government Contracting and Business Development (GCBD) responding by opining that the SBA’s automated system, upon which the OIG office relied heavily for its review, did not adequately capture the facts used in the eligibility determination, because the determining official either did not have an opportunity to include comments or had the opportunity but for some reason did not include them. The GCBD also claimed that the determining official had, in many cases, engaged in additional fact-finding with the applicant in an effort to give each 8(a) applicant the maximum opportunity to prove its eligibility.

The audit recommended that the official determining eligibility provide more fulsome commentary on its decision, particularly where the ultimate decision differed from the recommendation at a lower level. In other words, SBA was faulted for a lack of information supporting its decisions. These audit findings are just one more reason for companies applying for admission into the 8(a) program to make sure their applications provide SBA with all the required information in an organized, easy-to-use format. The more you can do to make the lives of SBA officials easier, the better off you (and they) will be.