The U.S. Small Business Administration has initiated a comprehensive audit of the 8(a) Business Development Program.
The SBA said Friday Kelly Loeffler, the agency’s administrator, called for the full-scale audit following revelations of a major fraud and bribery scheme involving a former U.S. Agency for International Development federal contracting officer and two participating 8(a) contractors.
Corruption in the 8(a) Business Development Program
The scheme was discovered after the Department of Justice conducted an investigation revealing that over $550 million in government contracts were improperly awarded by the former USAID contracting officer. The investigation also uncovered that one 8(a) contractor, flagged for lacking “honesty and integrity,” still managed to secure an additional $800 million in contracts to assess “issues affecting the root causes of irregular migration from Central America.”
SBA’s Office of General Contracting and Business Development, or GCBD, is tasked with conducting the audit while working closely with federal agencies that award contracts to 8(a) businesses. GCBD will start with high-value and limited-competition contracts covering the past 15 years. It will send its findings to the SBA Office of Inspector General and DOJ for enforcement. SBA intends to recover misused funds.
“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,” said Loeffler.
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