On June 27, 2025, the Administrator of the Small Business Administration (“SBA”), Kelly Loeffler, announced that she is directing an “immediate and full-scale audit of the agency’s 8(a) Business Development Program.” The impetus for this audit is a Department of Justice (“DOJ”) investigation that, according to a DOJ press release, discovered “over $550 million in government contracts were fraudulently steered through bribery and abuse of a U.S. Agency for International Development (USAID) contracting officer,” including to an 8(a) contractor.
Administrator Loeffler stated:
“Effective immediately, I am launching a full-scale audit of the program to stop bad actors from making the kind of backroom deals that have already cost taxpayers hundreds of millions of dollars. We must hold both contracting officers and 8(a) participants accountable – and start rewarding merit instead of those who game the system.”
The SBA’s announcement did not contain many specifics as to the scope and elements of the audit, other than stating that:
- The audit will be led by the SBA’s Office of General Contracting and Business Development;
- It will begin with high-dollar and limited-competition contracts, going back over a period of fifteen years; and
- Findings will be referred to the SBA Office of Inspector General and DOJ for enforcement, and the SBA will pursue all available actions to recover misused funds.
