SBA issues warning to federal contracting officers: Heightened scrutiny on 8(a) Program fraud

On July 29, 2025, the U.S. Small Business Administration (SBA) issued a formal letter to federal contracting officers, stressing their legal obligation to report fraud, waste, and abuse within the SBA 8(a) Business Development Program. The SBA’s directive identifies a DOJ investigation that reveals a multi-year bribery and fraudulent steering of contracts scheme. The SBA letter also announced that it has initiated a comprehensive audit of the 8(a) Program.

Mandate on Contracting Officers
The SBA’s letter serves as a clear reminder that contracting officers are legally required to report any suspected misconduct in the 8(a) Program. This includes, but is not limited to, knowingly submitting false information, concealing disqualifying facts, or engaging in other forms of abuse. The SBA warns of zero-tolerance approach to self-dealing and fraud, with a renewed commitment to rigorous oversight.

Implications for Businesses and Contracting Officers

Both federal contractors and agencies utilizing SBA 8(a) sole source and set-asides should expect increased scrutiny and a more robust enforcement environment. SBA  8(a) program participants should ensure strict compliance with program requirements and maintain transparent, ethical practices to avoid potential disqualification or investigation.  8(a) contractors as well as all other small businesses should have protocol in place that helps ensure business ethics and small business contracting compliance.  If you would like further information or to discuss how this development may impact your business, please contact attorney Michelle Kantor, Chair Federal Government Contracting Group.