Letter underscores obligation to report fraud, waste, and abuse in 8(a) Program
This week, the U.S. Small Business Administration (SBA) issued a formal letter to contracting officers across the federal government, strengthening oversight of the SBA 8(a) Business Development Program and reinforcing the officers’ legal responsibility to report suspected fraud, waste, and abuse.
“Our 8(a) contracting officers have a legal responsibility to uphold the law and protect taxpayer dollars, ensuring that federal awards go to legitimate, eligible small businesses. Today, we’re putting them on notice – that we will no longer tolerate the self-dealing and fraud that was allowed to proliferate under the Biden Administration,” said SBA Administrator Kelly Loeffler. “This notice is part of our effort to ensure officers understand their obligation – and the SBA’s renewed commitment to rigorous oversight of their work.”
The letter comes after a U.S. Department of Justice (DOJ) investigation uncovered a years-long fraud and bribery scheme involving a former federal contracting officer and two 8(a) contractors. The DOJ investigation revealed that over $550 million in government contracts were fraudulently steered through bribery and abuse of a U.S. Agency for International Development (USAID) contracting officer. One 8(a) contractor, despite being officially flagged by USAID as lacking “honesty or integrity,” went on to receive an additional $800 million in federal contracts to evaluate “issues affecting the root causes of irregular migration from Central America.”
Earlier this month, Administrator Loeffler ordered a full-scale audit of the 8(a) Program. As part of that effort to restore accountability, the SBA is formally directing all contracting officials involved in 8(a) procurement to fulfill their obligation to report potential misconduct, including entities that knowingly submit false information, conceal disqualifying facts, or other abuse.