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

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What the GAO found

The U.S. Small Business Administration’s (SBA) 8(a) Business Development Program was created to help grow small businesses owned and controlled by socially and economically disadvantaged individuals and entities, including tribes. federally or state-recognized Indians. The program offers these businesses the opportunity to compete on equal footing in the US economy. Specifically, companies that participate in the 8(a) program may receive federal contracts that have been reserved for participants in the 8(a) program.

According to SBA Standard Operating Procedures, for companies wishing to enter the program on the basis of association with a recognized Indian tribe, SBA Business Opportunity Specialists (BOS) are responsible for verifying tribal recognition during of the application process. The BOS determines whether the Indian tribe is recognized for SBA purposes based on a review of supporting evidence from the business applicant against tribal information maintained at the federal or state level. The Department of the Interior, Bureau of Indian Affairs (BIA) publishes an annual list of all federally recognized Indian tribes. Additionally, some state governments publish information regarding Indian tribes they have recognized.

GAO’s analysis of application data for fiscal years 2018 to 2020 indicates that all but one of the 122 participating 8(a) companies were associated with a Recognized Indian Tribe, as noted. Following this discovery, SBA officials told the GAO that the SBA was taking steps to end the company’s participation in the 8(a) program. In addition, illustrative results of secret GAO testing demonstrated that the SBA has taken steps to verify the recognition status of fictional Indian tribes, although it has yet to document formal procedures for verifying tribal recognition. .

Results of GAO’s Evaluation of SBA’s Tribal Recognition Verification

Why GAO Did This Study

According to SBA officials, in fiscal year 2020, federal contractual 8(a) obligations for the entire SBA 8(a) program totaled approximately $19.7 billion and 3,364 8(a) participants. were awarded 8(a) federal contracts for the same period.

Previous reports from the GAO and the SBA’s Office of Inspector General (OIG) have identified challenges with SBA’s oversight of the 8(a) program. For example, in March 2021, the OIG reported that the SBA has no formal procedure to verify the tribal recognition status of Indian tribes associated with 8(a) applications, which the SBA plans to address by now. December 2021.

The GAO was asked to evaluate the effectiveness of the SBA’s verification of tribal recognition of the Indian tribe associated with 8(a) companies applying for the program. This report discusses: (1) the extent to which candidate companies certified to participate in the 8(a) program were associated with a recognized Indian tribe, as claimed for fiscal years 2018 to 2020; and (2) what secret test results demonstrated about the SBA’s verification of tribal recognition status in fiscal year 2021.

The GAO compared the SBA’s tribal name data to information maintained by the BIA and to research that the GAO has conducted previously. The GAO also used covert testing to assess whether the SBA had taken steps to verify tribal recognition of the fictional Indian tribes associated with the GAO’s fictional applications. These tests are illustrative and cannot be generalized to all applications.

For more information, contact Seto J. Bagdoyan at (202) 512-6722 or [email protected] or James (Howard) Arp at (202) 512-6722 or [email protected]

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