154 firms face ouster from 8(a) program after failing financial eligibility test
Gettyimages.com/ Chip Somodevilla / Staff
By
Nick Wakeman
The Small Business Administration's crackdown targets companies that have exceeded net worth, income and asset thresholds.
The Small Business Administration plans to terminate 154 8(a) small businesses from the program for failing to meet the “economic disadvantage” requirements to be eligible.
SBA has sent letters to the firms notifying them of their suspension, 30 days before final termination.
Each company is headquartered in the Washington, D.C. area. SBA said they exceed statutory net worth limits, adjust gross income gaps or total asset limits.
“These firms received nearly $1.3 billion 8(a) set aside and sole-source contracts during the Biden Administration,” SBA wrote in its announcement.
The termination proceedings come after a review by SBA’s Office of Government Contracting and Business Development.
SBA began auditing the 8(a) program in June and followed that with a December order for 8(a) companies to turn over three years of financial information. In January, 1,000 of the 4,800 companies in the program were suspended for not complying with the data request.
Also in January, the Defense Department also launched a review of all of its 8(a) contracts.
The Trump administration has described the 8(a) program as rife with corruption and a bastion of diversity, equity and inclusion. Program defenders have argued that it is not a race-based program, but a powerful tool for economic development and flexible procurement.