8(a) Program participants received an early holiday surprise from the SBA’s 8(a) Program this past week. A mass request was sent out to 8(a) Program participants and some graduates requesting extensive (mostly financial) internal documentation so that the SBA could audit the program for any potential fraud, waste, or abuse. While the need to protect taxpayer funds and the 8(a) Program are fundamentally important, such a sudden wide ranging document request came as a surprise to many across federal contracting. The SBA’s explanation provided some insight for this broad request.
The 8(a) Program has been in the spotlight for the past few years due to the Ultima decision and the changes to the social disadvantage portion of 8(a) Program eligibility. So, it wasn’t unexpected when in June of this year, Administrator Kelly Loeffler called for the 8(a) Program to be audited. That announcement stated that the SBA’s Office of General Contracting and Business Development in collaboration with other agencies would lead the audit. The audit was also supposed to be focused on “high-dollar and limited competition contracts” and look back about fifteen years. Once that initial review was complete, the SBA’s Office of Inspector General and the Department of Justice would investigate any concerning findings. Since then, SBA had not said much on this topic, until late last week when contractors received an emailed request for documentation.
8(a) Program contractors received a request from the 8(a) Program last week which required them “to provide financial documents for the last three fiscal years, including bank statements, financial statements, general ledgers, payroll registers, contracting and subcontracting agreements, and employment records.” Contrary to the June 2025 press release, this audit is actually being sent by the SBA’s Office of General Counsel and was sent to all 8(a) contractors. This does not appear limited to high dollar contracts, or limited competition contracts; nor is it led by the SBA’s Office of General Contracting and Business Development.
So, this request did come as somewhat of a surprise to 8(a) Program contractors, as it casts a wider net than originally stated, and seems to take a more threatening tone as the request is coming from legal, not general contracting. In addition to this, there is a bill in the Senate, put forth by Senator Joni Ernst, which (if passed) would halt all sole-source awards with the 8(a) Program until this audit is completed and a report on such audit is given to Congress.
Note that providing documentation to the SBA is something that all 8(a) Participants have agreed to do, typically in the form of annual reporting. For instance, annual reporting includes
- Personal financial information
- A record of all payments, compensation, and distributions
- A report for each 8(a) contract performed during the year explaining how the performance of work requirements are being met for the contract
- Such other information as SBA may deem necessary.
13 C.F.R. § 124.112. While the SBA always had the power to request documentation, the short deadline and the broad list of information is a big departure from how SBA has typically requested documentation in the past.
So, where do we go from here?
The request has a due date of January 5, 2026. That only gives contractors a short window over the holidays to comply. If that due date is missed, a contractor “may lose their eligibility to participate in the 8(a) Program and could face further investigative or remedial actions.” So, contractors should get to work quickly on getting these internal documents in order and submitted, or else face some dire consequences. What the SBA is likely trying to see is where payments went, hence the focus on internal financial documents, and the discussion of a large fraud and bribery scheme in the press release. However, that does not mean the SBA will stop there.
It is very possible the SBA may want to look at operating agreement terms, control, and other eligibility factors during this process. So in addition to getting the requested documentation together, 8(a) Program contractors should likely review all their relevant operating and personal documentation to ensure it meets the eligibility requirements for control, disadvantage, ownership etc. (We have a great 8(a) Program Toolkit which links to information on many of those items). Also, the SBA is requesting teaming information, so be sure to review workshare percentages, and compliance with Limitations on Subcontracting (here is a blog we have on that topic too) in your teaming arrangements. It is not clear how the SBA will actually go about reviewing the anticipated thousands of voluminous responses from 8(a) Program contractors, and if there will be additional items requested. But it would not be surprising if there were more requests from the SBA in the future.
All of this could be highly critical to a contractor’s ability to continue contracting with the 8(a) Program, so even though the deadline is rather quick, it does not mean that a contractor can rush its response. 8(a) contractors should take time to carefully check all documentation requested for any potential issues, and prepare responses on items of note which they worry may raise questions with the SBA. Unfortunately, this is something where contractors have to respond, and have to do it quickly. It’s possible the SBA will interpret a non-response as an indicator of lack of cooperation with the SBA, leading to additional scrutiny from SBA. Of course, since the consequences at play are quite stark, and the 8(a) Program can be quite complicated, it is also probably good for contractors to reach out to a federal contracting attorney, such as ourselves, for assistance with any questions or responses to the SBA where things are more complicated. This is definitely something we will continue to keep an eye on, and see if SBA releases further requests or guidance. Contractors should likewise keep an eye out in their email inboxes (always check your spam to be safe), SBA certification portal, and anywhere else the SBA may send requests, to make sure they don’t miss any further requests.
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