The SBA’s waiver of the non-manufacturer rule in connection with an 8(a) sole source contract resulted in a “pass through” award to a large business, according to a report by the SBA Office of Inspector General. As a result, the 8(a) contractor in question received only $153,000 for “minimal” oversight, while the remainder of the $7.78 million 8(a) set-aside contract went to large companies.
The SBA OIG was quick to point out that the arrangement was legal, but questioned whether the pass-through provided appropriate developmental opportunities to the 8(a) contractor–as well as whether taxpayers are well-served by such large percentages of “small business” contracting dollars flowing to large companies.