8(A) Contractors Must Maintain Eligibility for the Life of the Program—or Else!

The Small Business Administration’s (SBA) 8(A) program allows the government to award contracts to eligible 8(A) firms on a set-aside basis. Firms owned by socially and economically disadvantaged individuals that meet certain other requirements can qualify to participate in the program. Once admitted, the firms have to meet certain ongoing eligibility requirements, which are set forth in 13 CFR 124, to remain in the program.

However, the SBA Inspector General recently sampled 25 8(A) contracts awarded in GFY 2017 and found that 20 of those contracts, valued at $126.8 million, were awarded to ineligible firms. If one can extrapolate these findings, this would mean that a staggering 80% of 8(A) contracts are awarded to ineligible firms. The Inspector General attributed this to SBA’s failure to effectively monitor whether the 8(A) firms meet the ongoing eligibility requirements.

In response to this audit, the SBA has drafted new procedures for monitoring eligibility, which will be implemented soon. 8(A) contractors can expect greater scrutiny and should immediately review the eligibility requirements to ensure they will not be terminated from this very beneficial program.

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