The SBA 8(a) Procurement Program--A Promise Unfulfilled

Gao ID: CED-81-55 April 8, 1981

The 8(a) Procurement Program of the Small Business Administration (SBA) is designed to channel noncompetitive federal contracts to disadvantaged small businesses to help them to become self-sufficient. The program also provides management, technical, marketing, and financial aid. A review was made of the program's implementation.

The program has had some benefits: the formation of many disadvantaged firms, continued operation of these firms, providing experience in business management, and assistance in getting commercial and non-8(a) government work. But the program has fallen short of its intended goal. Only 166 of the participating firms have graduated from the program as competitive businesses. A large volume of 8(a) contracts went to 50 firms which continue to be active participants. Over three-fifths of the firms have been in the program between 7 and 11 years. More than half of the participants that GAO interviewed were dissatisfied with or did not need the provided management, technical, and marketing aid. Removing inappropriate 8(a) firms from the program would give other disadvantaged firms an opportunity to participate. Often assessments of whether 8(a) contract awards will have an impact on other small businesses were not always made or were superficial. Several interrelated factors have limited the program's effectiveness: the President's yearly 8(a) contract goal imposed on SBA, vague program graduation criteria, missing business plan and financial statement data, and limited staff resources. Redirecting the program could free the limited staff to better serve program participants, provide an opportunity for other disadvantaged firms to participate, and enhance the program's credibility within the business community.


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