The Small Business Administration suspended more than 1,000 companies in the 8(a) program. SBA made the decision after it deemed those small businesses non-compliant with its financial data request from December.
“Suspended firms have 45 days to appeal the suspension,” said Maggie Clemmons, an SBA spokesperson in an email to Federal News Network. “SBA will release further information on the suspensions in the coming days.”
The suspension comes after SBA sent a letter to more than 4,300 8(a) firms in December seeking 13 different data, ranging from a list of the company’s employees to bank statements for the last three fiscal years to a copy of all 8(a) contracts, as part of its ongoing audit of the program.
Data compiled by GovContractPros, an advisory services firm specializing in federal procurement, found that SBA admitted 753 companies into the 8(a) program in fiscal 2024. Of those 753 firms, the company says SBA suspended 156 of them.
In fiscal 2025, SBA says it admitted only 65 companies into the 8(a) firm. GovContractPros says SBA suspended 10 of those firms, including nine which joined the program after the Trump administration began leading SBA.
Lawyers that represent small businesses say SBA issued the suspensions on Wednesday based on the fact that the 8(a) firms either failed to submit their responses on or before the Jan. 19 deadline or submitted incomplete responses.
“At least some firms that submitted complete data call responses only one day late — on Jan. 20, and before any suspension notices were issued — often due to errors in the government-operated MySBA Certifications portal, nonetheless received suspension notices, indicating that SBA is taking a strict approach to alleged non-compliance with the filing deadline,” wrote Meghan Leemon and Matt Feinberg, partners with the law firm Piliero Mazza, on a blog post. “Firms subject to 8(a) suspension are not permitted to receive new competitive or sole-source 8(a) awards. However, firms are required to complete existing 8(a) contracts, and federal agencies may exercise options on those contracts, even while a firm is suspended, unless otherwise prohibited by statute or regulation.”
SBA’s new clarifying guidance
The suspensions are part of a broad Trump administration effort to audit the 8(a) program and address allegations of fraud and abuse. SBA’s data call was one of several ongoing audits to now include the Treasury Department, the General Services Administration and, as of last week, now the Department of Defense.
“The Biden administration expanded and then abused the 8(a) program to hand out billions in taxpayer-funded government contracts to favored minorities at the direct expense of honest small businesses, which is why we ended the practice on day one,” said SBA Administrator Kelly Loeffler in a press release. “Since then, the Trump SBA has been working to reverse the damage – and today, we’re reiterating one simple fact: the Biden-era practice of discriminating against white Americans is over, and reforms to enshrine that fact are well underway. The SBA is ending diversity, equity and inclusion (DEI) in federal contracting – and our programs will remain open to all eligible job creators in compliance with federal law.”
In addition to suspending nearly a quarter of the 8(a) program participants, SBA issued new guidance today clarifying that the small business development program “is open to job creators of every race – consistent with court orders, notices from the U.S Department of Justice (DOJ), and President [Donald] Trump’s broader effort to eliminate DEI across the federal government – and that any race-based presumptions of social disadvantage have been inoperative since 2023.”
The guidance outlines new ways the SBA will manage the program.
It says it will administer the 8(a) program based on race neutral requirements and there will be no presumptive preference given to anyone.
SBA also will no longer approve the use of “socially disadvantage narratives” as a way to get into the program. It removed from its website the Biden-era “Guide for Demonstrating Social Disadvantage.”
Finally, SBA will consider several factors when determining eligibility for the 8(a) program, including whether the individual has been a “victim of illegal or radical DEI policies or illegal affirmative action policies or has otherwise been the victim of discriminatory practices such as race-based quotas, set asides or hiring targets, in each case by government and non-government actors.”
SBA says these steps are in reaction to the “dramatic expansion” under the Biden administration of companies in the 8(a) program.
Since January 2025, SBA accepted just 65 new 8(a) firms into the program, compared to over 2,100 who were accepted during the four years of the Biden administration.
Undermining the 8(a) program?
Jackie Robinson-Burnette, a former SBA associate administrator in the Office of Government Contracting and Business Development during the Biden administration, wrote on LinkedIn that this change isn’t a small tweak, but it’s re‑anchoring of the program’s foundation.
“It’s important to reform the 8(a) program without crushing the firms the program was designed to help,” wrote Robinson-Burnette, who now is the CEO of Senior Executive Strategic Solutions. “Are we dismantling and putting a sledgehammer to the program to curtail spending $20 million-plus on 8(a) sole source contracts or is it about something else?”
John Shoraka, a former associate administrator of government contracting and business development at SBA and now the co-founder and managing director of GovContractPros, said the SBA and now DoD’s audits are part of a concerted effort to undermine the confidence in the 8(a) program.
“It seems to be one initiative after another initiative, sort of in a very sequenced flow of events to undermine the program and sort of put the brakes on the program,” he said. “I think there’s a perception, and, it’s the wrong perception, that the 8(a) program is, at its core, a DEI program. I honestly don’t think that the administration believes there is significantly more fraud in the 8(a) program than any other contracting program. In fact, the data shows, if you look at inspector general cases or if you look at Department of Justice cases, the instances of fraud in the set-aside programs and particularly the 8(a) program, are actually significantly lower as opposed to across the entire federal government. So when we focus on fraud, waste and abuse in the 8(a) program, I think it’s just raising the flag. They can’t really say we want to kill this program because it’s DEI, they need to identify some sort of red flag to point to and say, ‘Ah-a, we told you this program was fraudulent, and therefore we need to terminate or put the brakes on this program.’”
Leemon and Feinberg, from the law firm Piliero Mazza, said companies caught up in the suspension should consider sending an informal appeals to SBA to lift the suspension.
“If informal channels are unsuccessful, a suspended 8(a) company may — and should — appeal SBA’s decision within 45 days of the date of the Notice of Suspension to SBA’s Office of Hearings and Appeals. This process can be time consuming, and appeals decisions can be delayed for months or even years,” the lawyers wrote.
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