The 8(a) Pilot Program for Disadvantaged Small Businesses Has Not Been Effective

Gao ID: CED-81-22 January 23, 1981

The implementation of the 8(a) pilot contracting program of the Small Business Administration (SBA) is discussed. SBA awards procurement contracts under this program to socially and economically disadvantaged small businesses for the purpose of helping them become competitive. When SBA uses the pilot program, it has the exclusive authority to designate procurement requirements. The Department of the Army was selected as the pilot agency in 1979; however, the Army and SBA disagree over the manner in which this program can be most effective. In 1980, the President designated three other agencies to participate in the pilot program. GAO sees no basis for these designations.

The stated objective of the pilot program was to seek procurement opportunities which were not currently offered by the Army under the regular 8(a) program. The pilot program has not met this objective. The three initial contracts awarded under the pilot program could have been handled under the regular 8(a) program, and GAO questioned the contribution the contracts would make for the firms that received them. In an attempt to upgrade the quality of procurements available to participants in the program, SBA issued criteria that firms must meet before they can be selected for the 8(a) program. It also issued criteria for contracts selected for the pilot program. Better program controls are needed in order for SBA to properly assess and match 8(a) firms' capabilities with procurement opportunities. Additional program testing is necessary in an agency that has not yet demonstrated its complete support for the 8(a) program. The Army has had a history of fully supporting the program.


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