154 Firms Just Lost Their 8(a) Status. Here's What That Means for Your Business
By WALLY ANGEL, ROSE FINANCIAL SOLUTIONS
The SBA just sent termination letters to 154 firms in the 8(a) program after an eligibility review found they exceeded statutory limits for economic disadvantage. One firm had $35 million in total assets — five times the cap. Another reported a net worth north of $24 million.
These 154 firms collected nearly $1.3 billion in 8(a) contracts between FY2021 and FY2024. Nearly $1 billion of that was sole-source.
Why They Were Terminated
The 8(a) program has hard eligibility limits under 13 CFR § 124.104:
- Net worth: $850,000
- Adjusted gross income: $400,000 (three-year average)
- Total assets: $6.5 million
Exceed any one, and you’re out. The SBA’s first-ever full audit of the program — covering all 4,300 active firms — is what surfaced these violations. The enforcement has been swift: 1,091 firms suspended in January for not submitting financials, and now 154 more facing termination for exceeding the thresholds.
What 8(a) Firms Should Do Now
- Know your numbers. Calculate your net worth, AGI average, and total assets against the caps. If you’re close, get a plan together.
- Respond to SBA requests fast. The 1,091 January suspensions happened because firms didn’t respond. If the SBA asks for anything, treat it as urgent. Reply quickly, reply completely, keep records.
- Treat your annual review like an audit. Under 13 CFR § 124.112, you demonstrate eligibility every year. Incomplete or sloppy submissions will draw scrutiny.
- Watch your personal financials. Inherited assets, real estate appreciation, spouse’s income — anything that pushes you over the line puts your certification at risk.
- Line up professional support. A government contracts attorney and a CPA who knows 8(a) compliance cost far less than losing your certification.
The Opportunity
Those 154 firms held $1.3 billion in contracts. That work doesn’t disappear — it gets recompeted. The 8(a) program moved $25.7 billion in FY2024. Removing ineligible firms redistributes the pie.
- Less competition. 1,091 suspended plus 154 terminated means a meaningfully smaller field.
- Sole-source openings. Agencies directing nearly $1 billion in sole-source work to these firms now need new vendors.
- Recompetes are coming. Watch SAM.gov for solicitations from the agencies that funded terminated firms.
- Compliance is your edge. Clean documentation makes you a safer bet for contracting officers.
Position now: Update your capability statements, identify where terminated firms were active (FPDS data helps), and get in front of those contracting officers.
Bottom Line
The 8(a) program is under the most intense scrutiny in its 50-year history. If your house is in order, this is one of the best positioning opportunities in years. If it’s not, fix it before the SBA fixes it for you.
Wallace Angel
Wallace “Wally” Angel is a strategic CPA with more than 20 years of experience in the government contracting and consulting environments with companies ranging from start-ups to $800M. His government contracting expertise includes FAR and DCAA compliance, indirect rate calculation, forward pricing, proposal writing, pricing, and cradle to grave contracts management and system design and implementation. In his position as Partner, Financial Operations, Wally serves as a trusted advisor to the C-suite in controllership and cash management, revenue recognition, system design and implementation, and full financial planning and analysis.
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