Small Business

Concerned that gaining access to the 8(a) business development program was a lengthy and burdensome process, that the program's administration was inefficient, and that few firms were able to compete successfully in the open market, Congress mandated wholesale changes to the program in 1988. Although the Small Business Administration (SBA) has made some changes to the program, which promotes the development of small businesses owned by socially and economically disadvantaged persons, the program still falls short in several areas. SBA's latest estimate for completing the redesign work is late 1995, 5 years later than originally projected. The program lacks a management information system, developed in accordance with federal guidelines, that yields complete and accurate information. As a result, Congress and program managers are in the dark about what assistance is being provided to 8(a) firms and whether the program is effective. In addition, access to the program still needs improving. Although SBA must provide 8(a) program applicants with timely feedback on their eligibility to participate in the program, it continues to operate without an application-tracking system that provides timely information on where and why application-processing problems are occurring. Finally, SBA needs to periodically review the business plan of each 8(a) firm. Without such a review, SBA cannot be sure that each plan is up-to-date, that the 8(a) firms' business development goals are realistic, and that the firms are making progress toward these goals. GAO summarized this report in testimony before Congress; see: Small Business: The Small Business Administration's Progress in Restructuring Its Business Development Program, by Jacquelyn Williams-Bridgers, Associate Director for Housing and Community Development Issues, before the House Committee on Small Business. GAO/T-RCED-93-56, Sept. 22, 1993 (23 pages).

GAO found that: (1) the 8(a) program still lacks a management information system that provides complete and accurate information on all 8(a) program aspects, including data on the type and amount of financial, management, and technical assistance provided to 8(a) firms; (2) SBA also lacks an application tracking system that can provide it with timely information on processing problems; (3) SBA does not effectively review the business plan of each 8(a) firm to ensure that it is up-to-date, the firm's business development goals are realistic, or that the firm is progressing toward achieving its goals; (4) SBA certification time for 8(a) program participants continues to exceed the mandated 90-day period; and (5) SBA has made improvements in tracking management and technical assistance, but the extent of financial assistance provided to 8(a) firms is not fully known.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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