The General Services Administration and Small Business Administration announced an audit of federal contracts held by 689 firms suspended from the 8(a) Business Development Program. The firms received contracts with a collective ceiling of $5.5 billion despite not demonstrating compliance with program requirements, according to the SBA.
The 8(a) Business Development Program helps eligible small, disadvantaged businesses compete for federal contracts. To qualify, a firm generally must be a small business and meet SBA requirements related to personal net worth, adjusted gross income, total assets, good character, potential for success, and other eligibility criteria.
The SBA's assessment found that hundreds of program participants had not met compliance standards yet still received federal benefits and procurement priority. GSA will examine the noncompliant businesses' federal contracts and refer suspected fraud to the Office of Inspector General and the Department of Justice.
The audit is part of a broader fraud detection effort at GSA. Since August, the agency has identified more than $13 billion in potential fraud, including $1.2 billion identified in coordination with the Department of Health and Human Services. The effort also contributed to the placement of Onur Simsek on the FBI's Most Wanted Fraudsters list.