Small Business: The Small Business Administration's Progress in Restructuring Its 8(a) Business Development Program

GAO discussed the Small Business Administration's (SBA) progress in implementing legislatively required changes to its 8(a) program, intended to promote the development of small businesses owned and controlled by socially and economically disadvantaged individuals. GAO noted that: (1) SBA met the 90-day maximum for determining participant eligibility for only 24 percent of the 268 applications it approved or declined between January and November 1990; (2) many of the participating firms lack required business plans, and SBA has not reviewed all of the plans it has received; (3) it is difficult for SBA to promote the equitable geographic distribution of noncompetitive 8(a) contracts, since procuring agencies recommend specific firms for about 95 percent of the contracts offered through the program; (4) of about 8,300 new 8(a) contracts, valued at about $3 billion, awarded in fiscal years 1990 and 1991, only 67 contracts, with a total value of $136 million, were competitive awards; (5) the SBA primary 8(a) management information system does not include the data necessary to meet reporting requirements; (6) SBA did not require participating firms to report semiannually on their use of personnel who help them to obtain federal contracts until 28 months after the legislative mandate; (7) SBA does not track and does not know the actual amount of 8(a) assistance provided and lacks objective criteria for measuring the effectiveness of assistance; and (8) SBA does not actually know but estimates that there have been few challenges to 8(a) contract awards.