The Small Business Administration has initiated termination proceedings against 154 Washington, D.C.-based companies participating in the 8(a) Business Development Program by sending letters informing them they failed to meet economic disadvantage requirements.
SBA said Wednesday it will suspend the companies for at least 30 days before finalizing their removal from the program. The agency’s action follows an internal eligibility review conducted by its Office of Government Contracting and Business Development.
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What Did the SBA Eligibility Review Find?
According to the review, SBA found that 154 firms received nearly $1.3 billion in 8(a) set-aside and sole-source contracts between fiscal years 2021 and 2024. The agency said nearly $1 billion of that total came through noncompetitive sole-source awards.
The review concluded that the firms exceeded statutory thresholds for economic disadvantage, including limits on adjusted gross income, net worth and total assets.
According to the agency, one Washington, D.C.-based 8(a) participant reported more than $35 million in total assets—more than five times the program’s eligibility cap—while continuing to pursue contracts reserved for economically disadvantaged businesses.
SBA also found that another program participant reported a net worth of at least $24 million and submitted financial statements in September 2021 showing it exceeded the total asset limit but remained in the program.
What Did SBA Administrator Kelly Loeffler Say About the 8(a) Program?
SBA Administrator Kelly Loeffler said the agency is restoring integrity to federal contracting programs.
“Today, we are taking action to terminate 154 D.C. firms that received $1.3 billion in federal contracts, all of whom were allowed to stay in the 8(a) Program even when they were not economically disadvantaged. This Administration is enforcing the law – which means we’re ending DEI discrimination, rooting out abuse, and removing big companies that unfairly dominated the federal contracting marketplace to the detriment of eligible, honest small business owners,” said Loeffler, a 2026 Wash100 awardee.
What Are SBA’s Recent 8(a) Program Actions?
SBA has expanded oversight of the 8(a) program under Loeffler’s leadership. In June 2025, SBA launched a comprehensive audit of the program to identify fraud and abuse.
In December, the agency directed approximately 4,300 8(a) firms to submit three years of financial documentation for review. The agency subsequently suspended 1,091 firms that did not comply with the request.
In January, SBA released guidance emphasizing that the use of race-based criteria in the 8(a) program violates constitutional and legal standards. The agency noted that it accepted 65 new 8(a) firms in 2025, compared with more than 2,200 accepted by the prior administration over four years.
