Trump administration suspends 1,000+ small business contractors from 8(a) program

(Washington, January 30) – Ranking Member Edward J. Markey (D-Mass.) today released a statement following the Trump Small Business Administration’s (SBA) announcement to suspend more than 1,000 small business contractors in the 8(a) Business Development Program. The 8(a) program is designed to provide federal contracting opportunities and training to small business owners that are socially and economically disadvantaged.

As Ranking Member of the Committee on Small Business and Entrepreneurship, Senator Markey is fighting to protect federal programs that address historic discrimination against small business owners from minority and underserved communities.

“Once again, the Trump administration is demonizing minority and underserved communities based on political whims continuing their campaign of contempt against communities of color. The 8(a) program was created more than 45 years ago to increase contracting opportunities for small businesses that have experienced systemic discrimination. Despite SBA’s false claims, this program is, and always has been, open to anyone that qualifies.

“Administrator Loeffler claims that minority groups have received outsized favorable treatment. The irony is that the only ones receiving favorable treatment are large businesses with ties to the Trump administration: earlier this week, $1.6 billion in government contracts were made to a corporation connected to Commerce Secretary Howard Lutnick’s children.

“While it’s important that proper oversight is conducted on any government program to protect against fraud, waste, and abuse, Trump’s SBA is putting the cart before the horse. It’s clear its investigation into the 8(a) program appears to have a fixed outcome. More than a quarter of all 8(a) firms have been suspended, not because of fraud or failed contracts, but because these firms were set up to fail by the SBA. The agency asked 4,300 small contractors to submit extensive paperwork with limited guidance and time to comply with the request. Small businesses operate on thin margins and don’t have teams of lawyers and accountants to comply with rushed requests sent out on a whim over the holidays.”

On December 5^th, SBA announced that every 8(a) firm would be required to provide detailed financial information to the agency with limited guidance. The SBA initially provided just 31 days to comply with their request, over the holidays, before extending the deadline to January 19^th. 

On December 23^rd, Ranking Member Markey and Senator Mazie Hirono (D-Hawaii) sent a letter to the Small Business Administration expressing concern about whether 8(a) firms would be able to comply with the SBA’s request for documentation as a part of their “investigation” into the 8(a) program. Despite these concerns that were expressed by 8(a) firms, SBA never responded to the letter.