The Small Business Administration (SBA) confirmed it suspended more than 1,000 contractors this month from the 8(a) Business Development Program, a cornerstone of federal contracting for many small businesses and Native-owned enterprises. The agency said the action followed firms’ failure to submit required records during a program-wide audit.
The suspensions represent about one-quarter of the roughly 4,300 companies participating in the 8(a) program, which provides contracting assistance to small businesses designated as socially and economically disadvantaged, including tribally owned enterprises, Alaska Native corporations and Native Hawaiian organizations.
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Federal contracting experts said the action represents an unusually severe enforcement step for what, in some cases, may have involved procedural noncompliance rather than allegations of fraud or misconduct.
“Suspension is a serious agency action that brands the contractor as an imminent risk to the government,” Matt Feinberg, an attorney at PilieroMazza who represents 8(a) firms, told Tribal Business News in an email. Suspensions under SBA regulations are typically reserved for cases involving fraud, false statements or serious questions about a contractor’s integrity, he said. [Note that in response to SBA’s Data Call, PilieroMazza established an 8(a) Audit Response Task Force to assist with informal and formal challenges to Notices of Suspension.]
Feinberg said SBA suspended some contractors that submitted audit materials shortly after the deadline, including cases involving technical problems with SBA’s MySBA portal around the Jan. 19 deadline, which fell on a federal holiday. He said SBA has not issued guidance indicating whether late submissions could result in reinstatement.
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Feinberg said that while suspended firms are permitted to continue performing existing contracts, federal agencies retain discretion to issue stop-work orders or terminate contracts for convenience, and suspended firms are barred from receiving new 8(a) awards while appeals are pending.
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Excerpt taken from the article “SBA suspends 1,000+ contractors from 8(a) program used widely by Native enterprises” by Brian Edwards for Tribal Business News. Visit this link for the full article.
About Matt Feinberg
Matt is an accomplished litigator with over 15 years of experience handling federal and state cases, including civil and appellate litigation, along with arbitration proceedings. As an experienced senior practitioner in PilieroMazza’s Litigation & Dispute Resolution Group and Chair of the False Claims Act (FCA) and Audits & Investigations teams, Matt has a unique perspective on successful litigation strategies to achieve the best possible outcomes for government contractors and commercial businesses. He is particularly adept at identifying weak spots in an opponent’s case, often leading to successful dismissals or early resolution of disputes, ultimately avoiding an expensive trial. Read more here.
