The U.S. Small Business Administration (SBA) suspended 1,091 firms from the 8(a) Business Development Program.
This represents about 25 percent of all firms registered to participate in the federal government contracting program.
The 8(a) Business Development Program was created to assist small businesses owned by socially and economically disadvantaged individuals, providing training, technical assistance and access to federal contracting opportunities.
The firms were suspended because they failed to meet the agency’s Jan. 19 deadline to submit three years’ worth of financial documents.
In December, the SBA ordered all 4,300 firms to submit basic documentation to prove their legitimacy as part of the SBA’s effort to root out small business contracting abuse by pass-through and shell companies.
Of the 1,091 firms that were suspended, about half have received some form of payment for contracted work with the federal government since 2021. Collectively, they have received payments of over $5 billion in the last four years.
“The Trump Administration has acted from Day One to dismantle the discriminatory agenda that put white small business owners at a disadvantage, and to crack down on the fraud and corruption that proliferates within DEI programs,” SBA Administrator Kelly Loeffler said. “Today, we are suspending over 1,000 8(a) firms who have refused to provide basic documents that every legitimate business should have on-hand. As we continue to eliminate bad actors from this program, we also look forward to introducing robust reforms in the coming weeks to bring total integrity back to federal contracting.”
Since last January, the SBA has worked to crack down “socially and economically disadvantaged” small businesses, which dramatically expanded under the Biden Administration as a vehicle for DEI in the federal contracting marketplace. The Biden Administration accepted over 2,200 new 8(a) firms into the Program over its four-year term, while the Trump SBA accepted just 65 last year.
The agency reduced the “Small Disadvantaged Business” contracting goal for the federal government from 15 percent to its statutory 5 percent.