Small Business Administration: Case Studies Illustrate 8(a) Program and Contractor Abuse

GAO discussed program and contractor abuses involving two firms that participated in the Small Business Administration's (SBA) 8(a) program. GAO noted that: (1) although the firms provided questionable information regarding their eligibility for the 8(a) program, SBA did not fully resolve the issues before it admitted the firms to the program; (2) one of the firm's misrepresented its qualifications to SBA, but both firms continue to benefit from contracts they received in the 8(a) program; (3) SBA did not recognize misleading financial statements that misrepresented the firm's size; (4) SBA also allowed the firm to continue in the 8(a) program for almost 2 years after it exceeded its size limit; and (5) the Coast Guard changed one of the firm's original industrial classification code to direct an indefinite delivery indefinite quantity contract to the firm and avoid competition.