SBA Orders All 8(a) Participants to Provide Financial Records — A Turning Point for the Program
By WALLY ANGEL, ROSE FINANCIAL SOLUTIONS
On December 5, 2025, U.S. Small Business Administration (SBA) issued letters to all ~4,300 firms in the 8(a) Business Development Program, directing them to submit three years of detailed financial records; including bank statements, general ledgers, payroll registers, subcontract agreements, and more. markets.businessinsider.com
This demand comes on the heels of a broad, full-scale audit launched earlier in 2025. The audit was triggered by a major enforcement action from U.S. Department of Justice (DOJ), which uncovered a multi-year fraud and bribery scheme involving a former federal contracting officer at the U.S. Agency for International Development (USAID) and multiple 8(a) contractors. That investigation revealed more than $550 million in contracts had been improperly steered via bribery and misuse of the program. sba.gov+2GlobeNewswire
According to the SBA, the audit will review high-dollar and limited-competition contracts going back 15 years, across all federal agencies that awarded 8(a) contracts. Findings will be forwarded to the SBA Office of Inspector General and DOJ for enforcement with possible recoveries, suspensions, debarments, and other sanctions. Holland & Knight+2GCO Consulting
The December 5 request marks more than a routine compliance check. It signals a structural reboot. For years, critics have flagged concerns that the 8(a) program had become ripe for abuse — with firms exploiting pass-through arrangements or nominal disadvantaged-status ownership to win contracts, while actual performance and control rested with non-eligible entities. The new financial-disclosure requirement suggests the SBA is shifting toward full transparency, rigorous accountability, and a merit-based reset of how small disadvantaged firms are selected and evaluated. Clark Hill+2ryanandwetmore.com
What this means for 8(a) firms and contracting partners:
- Firms should treat this as a compliance imperative.Begin collecting and reconciling three years of financial records now.
- Subcontracting and pass-through arrangements will face greater scrutiny; firms should be prepared to show that work was genuinely performed by the 8(a) entity, not just paper-shuffled.
- Contracting partners, primes, and agencies should re-evaluate teaming decisions and due diligence practices.
- For compliant, properly managed 8(a) firms with accurate financial records, this represents a strategic opportunity: Successful navigation of the audit can bolster credibility, reduce competition from non-compliant entities, and promote a level playing field for legitimate participants.
In summary, the 8(a) program is undergoing a transformative reset to prioritize integrity and fairness. Firms involved in or considering the program should prioritize organizing their financial documentation and prepare for an era of increased transparency. Responding promptly not only ensures compliance but positions ethical participants for sustained success by eliminating unfair advantages held by those misusing the program.
Have you received an SBA 8A program letter or need expert guidance on your financial data submission? Contact us for professional SBA compliance support and a comprehensive review to identify potential risk factors under the current administration.
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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