Report: SBA Should Better Educate 8(a) Applicants
The Small Business Administration could do a better job of educating applicants about its popular 8(a) loan program, but its effectiveness has been hampered by agency downsizing and budget reductions, according to a new government report (pdf).
The SBA's 8(a) program is designed to help small firms gain access to federal contracting opportunities and to help socially and economically disadvantaged small firms by providing management and contracting assistance. The federal government is supposed to award 23 percent of its total contract dollars to small businesses, but it has not achieved that goal.
The Government Accountability Office said the program is challenged by several factors - participants don't understand the program's purpose and requirements, the agency's staff has a diminished ability to conduct business development activities, the process to terminate firms is inefficient and there is a lack of routine program surveillance reviews.
"Years of SBA downsizing and budget reductions significantly reduced the resources available for these agency functions, including contracting review and monitoring," said the report.
The office also said the SBA has successfully put controls in place to determine if firms are eligible to enter the program, but applicants could benefit from participating in an information session or completing an assessment that rates their suitability to the program.
Staff workloads relating to the annual reviews appeared to be heavy, according to the report. GAO investigators spoke with 19 business development specialists at the agency. The number of firms for which they were responsible ranged from 36 to 162, with the majority of specialists responsible for 90 or more firms. However, portfolio size varies by district office because the concentration of 8(a) firms varies by district office, with the Washington Metropolitan Area district office having the highest number. In 2006, that office was responsible for more than 1,000 of the 9,667 firms in the program.
The SBA agreed with the GAO's recommendations and a letter from the agency is included on page 67 of the report.
The report was requested by Reps. Bennie Thompson (D-Miss.), chairman of the Homeland Security Committee, and Edolphus Towns (D-N.Y.), chairman of an Oversight and Government Reform subcommittee.
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Posted by: GCSInc | November 24, 2008 4:33 PM
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