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

What GAO found

The US Small Business Administration (SBA) 8 (a) Business Development Program was created to help develop small businesses owned and controlled by socially and economically disadvantaged people and entities, including recognized Indian tribes federal or state government. The program offers these companies the opportunity to compete on a level playing field in the US economy. Specifically, companies participating in program 8 (a) may receive federal contracts that have been reserved for participants in program 8 (a).

According to SBA Standard Operating Procedures, for companies wishing to access the program on the basis of association with a recognized Indian tribe, the SBA Business Opportunity Specialists (BOS) are responsible for verifying tribal recognition during the application process. The BOS determines whether the Indian tribe is recognized for SBA purposes based on a review of the evidence supporting the applicant company against tribal information kept at the federal or state level. The Home Office, Office of Indian Affairs (BIA) publishes an annual list of all Indian tribes recognized by the federal government. In addition, some state governments publish information about the 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 claimed. Following this finding, SBA officials told GAO that the SBA was taking action to end the company’s participation in the 8 (a) program. Additionally, illustrative results of secret GAO testing demonstrated that the SBA has taken steps to verify the recognition status of fictitious Indian tribes, although it has yet to document formal tribal recognition verification procedures. .

GAO Assessment Results of SBA Tribal Recognition Verification

Why GAO did this study

According to SBA officials, in FY2020, federal contractual obligations 8 (a) for the entire SBA 8 (a) program totaled approximately $ 19.7 billion and 3,364 participants 8 (a) were awarded 8 (a) federal contracts for the same period.

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

GAO was asked to assess 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 commercial candidates certified to participate in Program 8 (a) were associated with a recognized Indian tribe, as reported for fiscal years 2018 to 2020; and (2) what secret test results demonstrated regarding 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 previous research conducted by the GAO. The GAO also used covert tests to assess whether the SBA had taken any steps to verify tribal recognition of fictitious Indian tribes associated with fictitious GAO apps. These tests were 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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