Small Business Administration: Steps Taken to Verify Tribal Recognition for 8(a) Program

What GAO Discovered

The U.S. Modest Business enterprise Administration’s (SBA) 8(a) Small business Improvement application was established to support create smaller companies owned and controlled by socially and economically deprived folks and entities, together with Indian tribes that are federally or condition-recognized. The system gives this kind of corporations with an option to contend on an equivalent basis in the American financial state. Precisely, firms that take part in the 8(a) application can receive federal contracts that have been established apart for 8(a) method contributors.

According to SBA’s standard working techniques, for corporations in search of entry into the system based mostly on association with a recognized Indian tribe, SBA’s Business enterprise Prospect Professionals (BOS) are liable for verifying tribal recognition all through the software approach. The BOS establishes no matter whether the Indian tribe is recognized for SBA purposes primarily based on a evaluation of the small business applicant’s supporting evidence when compared to tribal info managed at the federal or condition governing administration degrees. The Department of Interior, Bureau of Indian Affairs (BIA) publishes an annual checklist of all federally identified Indian tribes. Moreover, some point out governments publish facts concerning the Indian tribes that they have identified.

GAO’s evaluation of application information for fiscal many years 2018 as a result of 2020 suggests that all but a single of the 122 collaborating 8(a) businesses have been associated with a recognized Indian tribe as claimed. As a final result of this obtaining, SBA officials instructed GAO that SBA is initiating steps to terminate that one business’s participation in the 8(a) system. More, GAO’s illustrative covert screening effects demonstrated that SBA took ways to validate the recognition position of fictitious Indian tribes, in spite of not yet documenting formal processes for verifying tribal recognition.

Benefits from GAO’s Evaluation of SBA’s Verification of Tribal Recognition

Results from GAO's Evaluation of SBA's Verification of Tribal Recognition

Why GAO Did This Research

According to SBA officers, in fiscal 12 months 2020, federal 8(a) deal obligations for the all round SBA 8(a) method totaled about $19.7 billion and 3,364 8(a) contributors had been awarded federal 8(a) contracts for the exact interval.

Prior GAO and SBA Business office of Inspector Standard (OIG) reviews recognized worries regarding SBA’s oversight of the 8(a) method. For illustration, in March 2021, the OIG reported that SBA experienced no formal techniques for verifying the tribal recognition status of Indian tribes involved with 8(a) purposes, which SBA ideas to tackle by December 2021.

GAO was questioned to evaluate the effectiveness of SBA’s verification of the tribal recognition of the Indian tribe associated with 8(a) firms implementing to the software. This report addresses: (1) the extent to which enterprise candidates licensed to participate in the 8(a) system were being linked with a identified Indian tribe as claimed for fiscal decades 2018 as a result of 2020 and (2) what covert testing results demonstrated about SBA’s verification of tribal recognition standing in fiscal calendar year 2021.

GAO in contrast SBA’s tribal identify facts to details taken care of by the BIA and research GAO performed beforehand. GAO also applied covert tests to assess whether or not SBA took actions to validate tribal recognition of fictitious Indian tribes associated with GAO’s fictitious apps. These assessments had been illustrative and simply cannot be generalized to all purposes.

For more info, get in touch with Seto J. Bagdoyan at (202) 512-6722 or or James (Howard) Arp at (202) 512-6722 or