SBA’s Business Development Assistance to 8(a) Program Participants

Submitting OIG:

Report Description:

The 8(a) Business Development Program helps small businesses owned by socially and economically disadvantaged individuals gain business skills and access to federal contracting opportunities so that they can better compete in the open marketplace. We set out to determine to what extent SBA measures and monitors an 8(a) firm’s progress and ensures 8(a) firms receive the help needed to meet their goals. We also examined whether the program adapted successfully during the Coronavirus Disease 2019 pandemic to help firms. We reviewed the business development assistance SBA provided 8(a) program participants from 2011-2020, which included reviewing the files for 40 of the firms assigned to 5 district offices. We also reviewed applicable public laws, regulations, policies, and procedures and interviewed program officials. We found that 15 of the 40 firms we tested did not have approved business plans, making these firms ineligible to receive $93 million in 8(a) awards. We also found SBA did not consistently document that its staff assessed the needs, counseled, or conducted field visits with 8(a) firms to ensure they received the assistance needed to be prepared to compete for contracts without further 8(a) assistance. However, we found SBA program officials offered program flexibilities to all 8(a) participants during the pandemic, adapting business development assistance to help firms stay in business and remain in the program. We made eight recommendations for the agency to measure, monitor, and better deliver training and other business development assistance to 8(a) firms.

Date Issued:

Monday, February 14, 2022

Agency Reviewed / Investigated:

Small Business Administration

Submitting OIG-Specific Report Number:

22-08

Location(s):

Agency-Wide

Type of Report:

Audit

Questioned Costs:

$93,000,000

Funds for Better Use:

Number of Recommendations:

View Document:

Attachment	Size
SBA-OIG-Report-22-08.pdf	1.26 MB

Recommendation Number	Recommendation Status	Significant Recommendation
1	Open	Yes
Implement a standard process to approve initial business plans and monitor to ensure that business plans are reviewed annually, to include appropriate updates for specific targets, objectives, and goals for the business development of program participants, in accordance with 13 CFR 124.403(a) and section 7(j)(10)(D) of the Small Business Act.
2	Open	Yes
Implement a standard process to capture, track, and recognize substantial achievement of the specific targets, objectives, and goals for the areas of finance, marketing, and management on 8(a) program participant business plans, in accordance with 13 CFR 124.112(f) and section 7(j)(10)(A) of the Small Business Act.
3	Open	Yes
Establish outcome-based performance goals and measurements to assess whether the program achieved business development objectives, including the number of graduated 8(a) firms in accordance with the measure of success in section 101(b)(2) of the Business Opportunity Development Reform Act of 1988.
5	Open	Yes
Implement a process to ensure the systematic collection of accurate and complete data on program results and operations to make sure all program reporting requirements are met, in accordance with section 7(j)(16)(A) of the Small Business Act and Standards for Internal Control in the Federal Government Principles for Information and Communication.
6	Open	Yes
Implement requirements for management to monitor that Business Opportunity Specialists consistently assess program participant’s development needs, counsel participants, conduct annual field visits, and maintain required documentation, as required by standard operating procedures.

Recommendation Number

Recommendation Status

Significant Recommendation

Additional Details

Open

Yes

Implement a standard process to approve initial business plans and monitor to ensure that business plans are reviewed annually, to include appropriate updates for specific targets, objectives, and goals for the business development of program participants, in accordance with 13 CFR 124.403(a) and section 7(j)(10)(D) of the Small Business Act.

Open

Yes

Implement a standard process to capture, track, and recognize substantial achievement of the specific targets, objectives, and goals for the areas of finance, marketing, and management on 8(a) program participant business plans, in accordance with 13 CFR 124.112(f) and section 7(j)(10)(A) of the Small Business Act.

Open

Yes