WASHINGTON, June 27, 2025 (GLOBE NEWSWIRE) -- Today, Kelly Loeffler, Administrator of the U.S. Small Business Administration (SBA), announced that she has directed the SBA’s Office of General Contracting and Business Development to launch an immediate and full-scale audit of the agency’s 8(a) Business Development Program after a U.S. Department of Justice (DOJ) investigation uncovered a years-long fraud and bribery scheme involving a former federal contracting officer and two 8(a) contractors.
“In recent years, SBA’s 8(a) Business Development Program has seen rampant fraud – and increasingly egregious instances of abuse,” said Loeffler. “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 DOJ investigation revealed that over $550 million in government contracts were fraudulently steered through bribery and abuse of a U.S. Agency for International Development (USAID) contracting officer. One 8(a) contractor, despite being officially flagged by USAID as lacking “honesty or integrity,” went on to receive an additional $800 million in federal contracts to evaluate “issues affecting the root causes of irregular migration from Central America.”
The audit will be led by the SBA’s Office of General Contracting and Business Development, beginning with high-dollar and limited-competition contracts and going back over a period of fifteen years – in collaboration with various federal agencies that award contracts to 8(a) participants.
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. Anyone with information about fraud, waste, mismanagement, or misconduct may report it to the SBA OIG at 800-767-0385.
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About the 8(a) Business Development Program
The SBA certifies small businesses considered to be socially and economically disadvantaged under its nine-year 8(a) Business Development Program. The 8(a) program helps these firms develop and grow their businesses through one-to-one counseling, training workshops and management and technical guidance. It also provides access to government contracting opportunities, allowing them to become solid competitors in the federal marketplace.
About the U.S. Small Business Administration
The U.S. Small Business Administration helps power the American dream of entrepreneurship. As the leading voice for small businesses within the federal government, the SBA empowers job creators with the resources and support they need to start, grow, and expand their businesses or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.
SBA HQ Press Team U.S. Small Business Administration press_office@sba.gov
