SMALL BUSINESS 

ADMINISTRATION

Government 

Contracting and 

Business 

Development 

Processes and RuleMaking Activities

Report to Congressional Committees

June 2017

GAO-17-573

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-17-573, a report to 

congressional committees

June 2017

SMALL BUSINESS ADMINISTRATION

Government Contracting and Business Development 

Processes and Rule-Making Activities

What GAO Found

The Office of Government Contracting and Business Development (OGCBD) at 

Small Business Administration (SBA) headquarters sets policies for SBA’s 

business development and government contracting programs, and SBA field 

office staff help to implement these programs at the local level. The reporting 

relationships between field staff and SBA headquarters vary depending on the 

program. For example, field staff who implement government contracting 

programs report to OGCBD, while most staff who implement the 8(a) business 

development program report to the Office of Field Operations (OFO), which 

oversees SBA’s field offices. SBA officials told GAO that this reporting structure, 

in which some field staff implement OGCBD programs but report to OFO, offers 

some benefits—for example, it allows these staff to support the goals of OGCBD 

programs as well as those of the individual field offices. However, officials also 

said the reporting structure can result in inconsistent program delivery. They 

described recent steps to improve communication between OGCBD and field 

staff, but it is too soon to tell if these steps will be effective.

SBA has taken some steps to address weaknesses GAO and the SBA Office of 

Inspector General (OIG) have identified in its processes for certifying small 

businesses as eligible to participate in SBA programs, but some 

recommendations remain open. For example, GAO found in 2015 that SBA had 

not required firms seeking recertification for the Historically Underutilized 

Business Zone (HUBZone) program to submit any information to verify continued 

eligibility and instead relied on firms’ attestations of continued eligibility. GAO 

recommended that SBA assess the HUBZone recertification process and add 

additional controls; SBA had not yet implemented this recommendation as of 

May 2017. SBA’s OIG also found in 2016 that SBA managers overturned lowerlevel reviewers’ decisions to deny firms admission to the 8(a) program without 

documenting in the information system how eligibility concerns were resolved. 

SBA’s OIG recommended that SBA clearly document the justification for 

approving or denying firms. In response, SBA stated that managers are now 

required to document decisions in the system that differ from those of lower-level 

reviewers.

A number of legal requirements and the volume of required rule makings, among 

other factors, affect the timeliness of SBA’s rule-making process. Certain stages 

of the rule-making process have mandated time periods, such as the required 

90-day interagency review process for certain rules. Various approaches exist for 

measuring the length of time required to develop and issue final rules, but they 

have limitations. For example, in measuring the period from rule initiation to final 

publication, agencies may differ on when they mark initiation. For four finalized 

SBA rules GAO reviewed, the time from publication of the proposed rule to 

publication of the final rule varied from 7.5 months to 17.5 months. SBA officials 

noted that an increase in the number of statutorily mandated rules in recent 

years has contributed to delays in the agency’s ability to promulgate rules in a 

more timely fashion. Office of Management and Budget (OMB) officials GAO 

spoke with stated that the length of time for SBA’s rule makings is not unusual 

and has not raised any concerns.

View GAO-17-573. For more information, 

contact William B. Shear at (202) 512-8678 or 

shearw@gao.gov.

Why GAO Did This Study

SBA’s OGCBD administers a 

business development program and 

further promotes small business 

participation in federal contracting 

through a variety of other programs. 

A House Committee Report 

accompanying the National Defense 

Authorization Act for Fiscal Year 

2017 included a provision for GAO to 

examine the operations of SBA’s 

OGCBD. GAO examined (1) the 

field-office and reporting structure 

OGCBD uses to implement its 

government contracting and 

business development programs, (2) 

progress OGCBD has made to 

strengthen its processes for 

certifying small businesses as 

eligible to participate in its programs,

and (3) the timeliness of SBA’s rulemaking process.

GAO reviewed documentation 

related to SBA’s organizational 

structure and certification processes; 

relevant laws and regulations; SBA 

program guidance; and previous 

GAO reports. GAO interviewed SBA

and OMB officials. GAO reviewed 

four statutorily mandated SBA rules, 

which were selected from 47 

provisions in the National Defense 

Authorization Acts for fiscal years 

2013, 2014, 2015, and 2016 as 

examples of mandatory rule making.

GAO makes no new 

recommendations in this report, and 

maintains that SBA should 

implement prior recommendations.

SBA’s technical comments on GAO’s 

draft report are incorporated as 

appropriate.
Page i GAO-17-573 Small Business Administration

Letter 1

Background 3

Reporting Lines for Field Staff Who Implement Government 

Contracting and Business Development Programs Vary 10

SBA Has Made Improvements to Its Certification Processes, but 

Some Weaknesses Remain 17

Legal Requirements and Volume, among Other Factors, Affect the 

Timeliness of SBA’s Rule-Making Actions 23

Agency Comments 30

Appendix I Objectives, Scope, and Methodology 31

Appendix II Summary and Status of Previous GAO Recommendations 34

Appendix III GAO Contact and Staff Acknowledgments 40

Tables

Table 1: Key Timelines Associated with Selected Small Business 

Administration (SBA) Rules 26

Table 2: Summary and Status of Previous GAO 

Recommendations 34

Figures

Figure 1: Lines of Reporting and Working Relationships across 

OGCBD Headquarters and Field Staff 15

Figure 2: Selected Time Requirements within the Federal Rulemaking Process 25

Contents
Page ii GAO-17-573 Small Business Administration

Abbreviations

APA Administrative Procedure Act

CMR commercial market representative 

FAR Federal Acquisition Regulation 

HUBZone Historically Underutilized Business Zone

NASA National Aeronautics and Space Administration 

NDAA National Defense Authorization Act 

OCE Office of Certification and Eligibility

OFO Office of Field Operations

OGC Office of General Counsel

OGCBD Office of Government Contracting and 

Business Development

OIG Office of Inspector General

OIRA Office of Information and Regulatory Affairs

OMB U.S. Office of Management and Budget

OPPL Office of Policy, Planning and Liaison

PCR procurement center representative

SBA U.S. Small Business Administration

SDVOSB service-disabled veteran-owned small business

SOP standard operating procedure

WOSB women-owned small business

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Page 1 GAO-17-573 Small Business Administration

441 G St. N.W.

Washington, DC 20548

June 30, 2017

The Honorable James E. Risch

Chairman

The Honorable Jeanne Shaheen

Ranking Member

Committee on Small Business and Entrepreneurship

United States Senate

The Honorable Steve Chabot

Chairman

The Honorable Nydia M. Velázquez

Ranking Member

Committee on Small Business 

House of Representatives

The Office of Government Contracting and Business Development

(OGCBD) at the Small Business Administration (SBA) administers SBA’s 

8(a) business development program and promotes small business 

participation in federal contracting through a variety of other programs to 

help ensure that at least 23 percent of all prime government contract 

dollars go to small businesses. According to SBA, in fiscal year 2016 

about $100 billion federal contracting dollars were awarded to small 

businesses as prime contractors, of which about $82 billion was awarded 

to small businesses in the socioeconomic categories of small 

disadvantaged businesses, women-owned small businesses, service 

disabled veteran-owned small businesses, and historically underutilized 

business zone small businesses. Through a network of field offices and 

partnerships with public and private organizations, SBA delivers its 

services to businesses throughout the United States, Puerto Rico, the 

U.S. Virgin Islands, and Guam.

We and SBA’s Office of Inspector General (OIG) have identified a number 

of long-standing management challenges at SBA that have resulted in 

inefficient program operations. Most recently, our September 2015 report 

on SBA operations found that SBA’s organizational structure has created 

complex overlapping relationships among offices that have contributed to 

Letter
Page 2 GAO-17-573 Small Business Administration

challenges in program oversight.1 Specifically, we found that SBA’s 

organizational structure often results in working relationships between 

headquarters and field offices that differ from reporting relationships, 

potentially posing programmatic challenges. In addition, we have found 

deficiencies related to two SBA contracting programs—the Historically 

Underutilized Business Zone (HUBZone) and Women-Owned Small 

Business (WOSB) programs—and made recommendations to help 

ensure that only eligible small businesses are certified for these 

programs.2

A House Committee Report accompanying the National Defense 

Authorization Act for Fiscal Year 2017 included a provision for us to 

examine the operations of SBA’s Office of Government Contracting and 

Business Development (OGCBD), including its reporting structure and 

processes for certifying small businesses as eligible to participate in 

programs that provide contracting preferences, as well as SBA’s rulemaking process. This report examines (1) the field-office and reporting 

structure OGCBD uses to implement government contracting and 

business development programs; (2) progress OGCBD has made to 

strengthen its certification processes; and (3) the timeliness of SBA’s rulemaking process.

To examine SBA’s field-office and reporting structure, we reviewed SBA 

documentation on its organizational structure and a study SBA obtained 

from a consultant about its organizational structure. We also reviewed 

academic literature on organizational theory to provide context for 

understanding SBA’s organizational structure and leading practices for 

implementing changes to organizational structure. In addition, we 

interviewed SBA headquarters staff to obtain their perspectives on SBA’s 

current organizational structure with respect to government contracting 

and business development programming. To examine the progress SBA 

has made to strengthen its processes for certifying small businesses as 

eligible to obtain government contracts, we reviewed relevant laws, 

 1

GAO, Small Business Administration: Leadership Attention Needed to Overcome 

Management Challenges, GAO-15-347 (Washington, D.C.: Sept. 22, 2015). We discuss 

the status of our recommendation to SBA on its organizational structure later in this report.

2

GAO, Small Business Contracting: Opportunities Exist to Further Improve HUBZone 

Oversight, GAO-15-234 (Washington, D.C.: Feb. 12, 2015) and Women-Owned Small 

Business: Program Certifier Oversight and Additional Eligibility Controls Are Needed, 

GAO-15-54 (Washington, D.C.: Oct. 8, 2014). We discuss the status of these 

recommendations later in this report.
Page 3 GAO-17-573 Small Business Administration

regulations, and agency guidance. We also interviewed SBA staff to 

understand the different certification processes. To examine the 

timeliness of SBA’s rule making, we reviewed relevant laws, regulations, 

and SBA guidance. We also reviewed four statutorily mandated SBA 

rules, selected from 47 provisions in the National Defense Authorization 

Act (NDAA) for fiscal years 2013, 2014, 2015, and 2016 to provide 

examples of mandatory rule making.3 In addition, we interviewed SBA 

staff and staff from the Federal Acquisition Regulatory Council (FAR

Council) within the Office of Management and Budget (OMB) to 

understand SBA’s regulatory drafting process, the Federal Acquisition 

Regulation process, and the coordination between SBA and the FAR 

Council. Appendix I provides more detail on our scope and methodology.

We conducted this performance audit from August 2016 to June 2017 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

SBA’s organizational structure comprises headquarters and regional, 

district, and area field offices. At the headquarters level, SBA is divided 

into several key functional areas that manage and set policy for the 

agency’s programs. Seventeen headquarters offices report to the Office 

of the Administrator. SBA provides its services to small businesses 

through a network of regional and district offices that are led by the Office 

of Field Operations (OFO) and area offices, led by OGCBD, as discussed 

in greater detail later in this report. Regional offices oversee the district 

offices and promote the President’s and SBA Administrator’s messages 

throughout the region. District offices serve as the point of delivery for 

most SBA programs and services. Four program offices at the 

headquarters level manage the agency’s programs that provide capital, 

contracting, counseling, and disaster assistance services to small 

businesses: the Office of Capital Access, the Office of Entrepreneurial 

Development, the Office of Disaster Assistance, and OGCBD.

 3

The Fiscal Year 2015 act is officially titled the “Carl Levin and Howard P. “Buck” McKeon 

National Defense Authorization Act for Fiscal Year 2015.” For purposes of this report we 

will refer to the act by the shortened title of “National Defense Authorization Act for Fiscal 

Year 2015” or “NDAA for Fiscal Year 2015.” 

Background
Page 4 GAO-17-573 Small Business Administration

OGCBD promotes small business participation in federal contracting 

through a variety of programs, including programs that provide small 

businesses with contracting preferences based on socioeconomic 

designations—the 8(a) Business Development (8(a)), Historically 

Underutilized Business Zone (HUBZone), women-owned small business 

(WOSB), and service-disabled veteran-owned small business (SDVOSB) 

programs.

• The 8(a) program provides business development assistance to 

small, disadvantaged businesses and helps them participate in the 

federal contracting market through sole-source and competitive 8(a) 

set-aside contracts.4

• The HUBZone program aims to stimulate economic development in 

economically distressed areas by helping urban and rural small 

businesses that are located in designated economically distressed 

areas to access federal procurement opportunities.5

• The SDVOSB program helps service-disabled veteran-owned small 

businesses acquire federal contracts.

• The WOSB Federal Contracting program helps women-owned 

small businesses acquire federal contracts.

In addition, SBA administers a prime contracts program, subcontracting 

assistance program, certificate of competency program, and size 

determination program to increase federal contracting opportunities for 

small businesses. These programs, among other things, seek to 

maximize federal contracting opportunities for small businesses, 

HUBZone small businesses, women-owned small businesses, and any 

other firm participating in an OGCBD program.

OGCBD has four main offices at the headquarters level: Office of 

Business Development (which includes the new All Small Mentor-Protégé 

program), Office of Government Contracting, Office of HUBZone 

Program, and Office of Policy, Planning and Liaison.

 4

Sole-source—that is, noncompetitive—contracts and competitive 8(a) set-asides can be 

for 8(a) small businesses meeting the eligibility requirements.

5

To participate in the HUBZone program, a business must meet certain eligibility 

requirements, such as being considered a small business by SBA standards and having 

its principal office in a designated HUBZone.
Page 5 GAO-17-573 Small Business Administration

• The Office of Business Development administers the 8(a) business 

development program and includes the new Office of All Small 

Mentor-Protégé which was established in summer 2016 to provide 

mentor-protégé services to all eligible small businesses.6

• The Office of Government Contracting administers SBA’s prime 

contracts, subcontracting assistance, WOSB Federal Contracting 

program, certificate of competency, and size determination programs.

• The Office of HUBZone Program administers the HUBZone program.

• The Office of Policy, Planning, and Liaison is responsible for 

implementing small business government contracting legislation and 

policy through SBA regulations.

SBA’s field-office structure consists of 6 area offices, 68 district offices, 

and 10 regional offices. Area offices may sometimes be co-located with 

regional and district offices but differ in mission and function.

• Area offices report to OGCBD and while headquartered in six cities 

across the country, cover multiple SBA regional geographic areas 

encompassing a number of states where contracting activity is most 

prevalent. The primary function of these offices is to manage 

government buying activities throughout the country, which includes 

reviewing potential agency requirements and making 

recommendations to agency contracting officers on the portion of 

contracts to set aside for qualified small businesses. This also 

includes working with federal agencies and small businesses after 

contracts have been awarded to adjudicate size protests and conduct 

subcontracting compliance reviews, among other functions.

• District offices report to OFO and are located in at least one city for 

each state.7 The primary functions of these offices are (1) to market 

all SBA programs and services such as the aforementioned 

contracting programs, entrepreneurial development programs, and 

programs that facilitate loans from lenders to small business or capital 

access; (2) to provide business development assistance to 

entrepreneurs and small business owners; and (3) to support 

 6

The purpose of the All Small Mentor-Protégé Program is to develop strong protégé firms 

through mentor-provided business development assistance, and to help protégés 

successfully compete for government contracts.

7

California, Florida, New York, Ohio, Pennsylvania, and Texas have multiple district 

offices.
Page 6 GAO-17-573 Small Business Administration

compliance and oversight responsibilities across capital and economic 

development programs. They also have geographic-specific 

contracting compliance responsibilities for local businesses in their 

portfolio. Branch offices and Alternative Work Sites serve as an 

extension of district offices and are in areas where local business 

needs require an additional SBA presence.

• Regional offices report to OFO and are responsible for marketing 

SBA and its programs to businesses and local government.8 Regional 

offices provide oversight of all district offices in their region and are 

often located in the same physical location as a district office.

OGCBD sets policy for SBA’s government contracting and 8(a) business 

development programs and coordinates with OFO to implement its 

programs in field offices. OGCBD creates policies for field staff 

implementing its programs that include defining district office staff 

responsibilities and identifying counseling procedures that govern how 

district staff are to service firms. OGCBD also coordinates with OFO 

through weekly management calls to exchange information and provide 

updates on changes to policies and procedures. OGCBD has also 

coordinated with OFO to evaluate and update position descriptions for 

staff in field offices implementing its programs, most recently in 2016.

SBA’s Office of Policy, Planning and Liaison (OPPL) is responsible for 

implementing small business government contracting laws and policy 

through SBA regulations. Executive branch agencies involved in rule 

making, including SBA, have authority and responsibility for developing 

and issuing regulations to implement laws. Many laws, regulations, and 

executive actions govern the federal rule-making process, including the 

following:

• Administrative Procedure Act (APA): The APA was enacted in 

1946 and established the basic framework of administrative law 

governing federal agency action, including rule making. The APA 

governs “notice-and-comment” rule making, also referred to as 

 8

In a prior report we examined the potential effects of closing regional offices; for more 

information, see GAO, Small Business Administration: Views on Operational Effects of 

Closing Regional Offices, GAO-15-369 (Washington, D.C.: Sept. 22, 2015).

The Federal Rule-making 

Process
Page 7 GAO-17-573 Small Business Administration

“informal” or “APA rule making.”9 This act generally requires (1) 

publication of a notice of proposed rule making, (2) opportunity for 

public participation in the rule making by submission of written 

comments, and (3) publication of a final rule and accompanying 

statement of basis and purpose not less than 30 days before the 

rule’s effective date. Congresses and presidents have taken a number 

of actions to refine and reform this regulatory process since the APA 

was enacted.

• Executive Order 12866. Under Executive Order 12866, the Office of 

Information and Regulatory Affairs (OIRA), within OMB, reviews 

agencies’ significant regulatory actions (including both proposed and 

final rules) and is generally required to complete its review within 90 

days after an agency formally submits a draft regulation. Each agency 

is to provide OIRA a list of its planned regulatory actions, indicating 

those that the agency believes are significant. For each rule identified 

by the agency as, or determined by the Administrator of OIRA to be, a 

significant regulatory action, the agency submits the rule to OIRA for 

formal review—including the coordination of interagency review. After 

receipt of this list, the Administrator of OIRA may also notify the 

agency that OIRA has determined that a planned regulation is a 

significant regulatory action within the meaning of the executive 

order.10 The order defines significant regulatory actions as those that 

are likely to result in a rule that may:

1. have an annual effect on the economy of $100 million or more or 

adversely affect in a material way the economy; a sector of the 

economy; productivity; competition; jobs; the environment; public 

health or safety; or state, local, or tribal governments or communities;

2. create a serious inconsistency or otherwise interfere with an action 

taken or planned by another agency;

3. materially alter the budgetary effect of entitlements, grants, user fees, 

or loan programs or the rights and obligations of recipients thereof; or

4. raise novel legal or policy issues arising out of legal mandates, the 

President’s priorities, or the principles set forth in Executive Order 

12866.

 9

The APA describes two types of rule making, formal and informal. Formal rule making 

includes a trial-type on-the-record proceeding. Most federal agencies use the informal 

rule-making procedures outlined in 5 U.S.C. § 553.

10The Administrator of OIRA may also waive review of any planned regulatory action 

designated by the agency as significant.
Page 8 GAO-17-573 Small Business Administration

• Federal Acquisition Regulation (FAR). Certain acquisition 

regulations must go through a separate OMB process after the final 

rule has been published before being added to the FAR. The FAR is a 

regulation that generally governs acquisitions of goods and services 

by executive branch agencies. It addresses various aspects of the 

acquisition process, from acquisition planning to contract formation to 

contract management. Part 19 of the FAR governs small business 

contracting programs. Federal Register notices proposing or 

announcing amendments to the FAR are generally issued jointly by 

the Department of Defense, General Services Administration, and 

National Aeronautics and Space Administration (NASA), though these 

items typically receive the concurrence of OMB’s FAR Council.

11 After 

receiving a memorandum from an agency proposing to amend the 

FAR, the FAR Council refers potential changes to standing FAR 

teams for review. The process of amending the FAR can take 

anywhere from months to years.

There are three phases in the federal rule-making process: initiation of 

rule-making actions, development of proposed rules, and development of 

final rules.

• During the initiation phase agency officials identify sources of potential 

rule makings. Potential rule makings may result from statutory 

requirements or issues identified through external sources (for 

example, public hearings or petitions from the regulated community) 

or internal sources (for example, management agendas). During this 

phase, agencies gather information that would allow them to 

determine whether a rule making is needed and to identify potential 

regulatory options.

• The second phase of the rule-making process starts when an agency 

begins developing the proposed rule. During this phase, the agency 

drafts the rule and begins to address analytical and procedural 

requirements. Also built into this phase are opportunities for internal 

and external deliberations and reviews, including official management 

approval. OIRA may be involved informally at any point during the 

process. After OIRA completes its review and the agency incorporates 

 11The FAR Council was established to assist in the direction and coordination of 

government-wide procurement policy and government-wide procurement regulatory 

activities in the federal government. The Council manages, coordinates, controls, and 

monitors the maintenance and issuance of changes in the FAR. FAR Council membership 

consists of the Administrator for Federal Procurement Policy, the Secretary of Defense, 

the Administrator of NASA, and the Administrator of the General Services Administration, 

and it is situated under the Office of Federal Procurement Policy at OMB. 
Page 9 GAO-17-573 Small Business Administration

resulting changes, the agency publishes the proposed rule in the 

Federal Register for public comments.

• In the third phase of the process, the development of the final rule, the 

agency receives and reviews public comments, finalizes the 

language, and sends the rule through internal and external agency 

reviews, among other things. Once the comment period closes, the 

agency responds to the comments either by modifying the rule to 

incorporate the comments or by otherwise addressing the comments 

in the final rule. This phase also includes opportunities for internal and 

external review. Again, if the agency determines that the rule is 

significant or at OIRA’s request, the agency submits the rule to OIRA 

for review before final publication. If OIRA’s review results in a change 

to the final rule, the agency revises the rule before publication. After 

all changes are made, the final rule as published in the Federal 

Register includes the date that the rule becomes effective.

An agency has certain options to expedite the rule-making process, and 

Congress has the ability to compel agencies to take action on a rule 

making if it believes there have been unreasonable delays. The APA 

includes exceptions to notice and comment procedures for certain 

categories of rules, such as those dealing with military or foreign affairs 

and agency management or personnel. Further, APA requirements to 

publish a proposed rule generally do not apply when an agency finds, for 

“good cause,” that those procedures are “impracticable, unnecessary, or 

contrary to the public interest.”12 Agencies often invoke “good cause,” for 

example, when Congress prescribes the content of a rule by law, such 

that prior notice and public comment could not influence the agency’s 

action and would serve no useful function. If an agency finds that notice 

and comment would be “impracticable, unnecessary, or contrary to the 

public interest,” the agency may issue a rule without prior notice and 

comment and instead solicit public comments after the rule has been 

promulgated. The agency may then choose to revise the rule in light of 

these post-promulgation comments. An agency also has the option of 

issuing an “interim final rule” to expedite the rule-making process. Other 

sources of exceptions to notice-and-comment rule making exist, such as 

specific statutory provisions that may direct agencies to expedite 

issuance of final rules. While agencies could be compelled to take action 

if they have “unreasonably delayed” a regulation or FAR amendment, 

Congress has seldom, if ever, compelled an agency to do so.

 125 U.S.C. § 553(b).
Page 10 GAO-17-573 Small Business Administration

OGCBD headquarters sets policies for SBA’s business development and 

government contracting programs, and SBA staff in field offices and other 

locations help to implement these programs at the local level. These field 

staff perform a variety of activities, depending on the program they are 

supporting. The reporting relationships between field staff and SBA 

headquarters also vary depending on the program. For example, field 

staff who implement government contracting programs report to OGCBD, 

while staff who manage the local portfolio-driven 8(a) business 

development program report to OFO, which oversees the field offices.

Prime contracts and subcontracting assistance programs. At the 

headquarters level, the Office of Government Contracting within OGCBD 

manages SBA’s prime contracts, subcontracting assistance, certificate of 

competency, and size determination programs, which are implemented by 

staff who report to six area offices across the country. The Office of 

Government Contracting oversees the implementation of these programs 

by area offices and monitors the performance of and develops training for 

the staff who implement these programs.

In the field, staff known as procurement center representatives (PCR) 

implement SBA’s prime contracts program, and these staff report through 

area offices to OGCBD. As noted in SBA’s standard operating procedure 

(SOP) for the prime contracts program, PCRs work to help ensure that 

small businesses have a fair and equitable opportunity to compete for 

federal procurement opportunities and that a fair proportion of the total 

sales of federal government property is made to small business concerns. 

PCRs recommend the set-aside of selected acquisitions, recommend 

new qualified small business sources, appeal contracting officer’s 

decisions which they deem adverse to small business, and provide advice 

to large business concerns to facilitate maximum practicable 

subcontracting opportunities for the small business community. Staff 

known as commercial market representatives (CMR) implement SBA’s 

subcontracting assistance program; CMRs also report through area 

offices to OGCBD. CMRs, among other things, work to facilitate the 

matching of large prime contractors with small business concerns, 

counsel large prime contractors on their responsibilities to maximize 

subcontracting opportunities for small business concerns, and counsel 

small business concerns on how to market themselves to large prime 

contractors. Staff known as Industrial Specialists are assigned to manage 

the Certificate of Competency and the Size Protest determination 

program cases. Certificate of Competency’s Industrial Specialists analyze 

the responsibility and capability of small businesses that have been 

Reporting Lines for 

Field Staff Who 

Implement 

Government 

Contracting and 

Business 

Development 

Programs Vary
Page 11 GAO-17-573 Small Business Administration

tentatively selected for a contract, to help ensure that any of the 

contracting officer’s concerns about the firm’s ability to successfully 

perform can be overcome. Size Industrial Specialists analyze protests of 

awards when there is a question as to whether the recipient is in fact a 

small business. Both of these decisional responsibilities affect the 

awarding of contracts to individual small businesses.

8(a) Business Development program. At the headquarters level, the 

Office of Business Development within OGCBD is responsible for 

administering services available through the 8(a) Business Development 

program by issuing program policy and plans, evaluating program 

implementation, and rendering final decisions on program eligibility, 

among other responsibilities. The Office of Business Development is 

comprised of three departments, which collectively support the 8(a) 

program.

• The Office of Certification and Eligibility (OCE) has staff at both 

headquarters and two field offices who perform similar activities. OCE 

staff process initial certifications of eligibility for the 8(a) program and 

conduct continuing eligibility reviews for firms deemed to be high risk 

or complex, among other duties. OCE staff in field offices report to 

OGCBD via OCE.

• The Office of Management and Technical Assistance administers 

most services provided to 8(a) participants that are not provided by 

the district offices, such as administering the 8(a) Mentor-Protégé 

program, servicing sole-source, competitive, and multiple award 

contracts; analyzing and processing termination waivers; reaching out 

to prime contractors, federal agencies, and the 8(a) business 

development community; and overseeing the execution of national 

and local seminars and conferences, among other things.

• The Office of Program Review supports headquarters and field office 

staff administering the program by evaluating and responding to 

external reviews, creating marketing products for the 8(a) program, 

and preparing the annual report to Congress on program participation 

and contracting, among other things.

At the local level, about 160 district office staff members known as 

Business Opportunity Specialists support the 8(a) program by interacting 

directly with small businesses. Business Opportunity Specialists are 

responsible for implementing the 8(a) program within the geographical 

area serviced by their district office, and each specialist has a portfolio of 

firms that they are responsible for supporting throughout the firms’
Page 12 GAO-17-573 Small Business Administration

participation in the 8(a) program.13 Their activities include assisting firms 

as they prepare to apply to the program, hosting webinars about SBA’s 

government contracting and business development programs, and 

conducting training for firms on how to strengthen elements necessary for 

participation in these programs, such as a creating a strong business

plan. Business Opportunity Specialists are also responsible for 

conducting annual reviews, which assess a firm’s progress in the 8(a) 

program.14 Further, they conduct continuing eligibility reviews, which help 

ensure that firms are still eligible to participate in the program after initial 

certification.15

In contrast with the field staff in area offices who implement SBA’s 

government contracting programs and report to OGCBD headquarters, 

Business Opportunity Specialists in district offices report to OFO via the 

district director, and their caseloads are determined by OFO.16 District 

directors manage the district offices and prepare a comprehensive District 

Office Strategic Plan outlining the methodology to achieve or exceed 

district goals by fiscal year end. The plan is specific to the district’s 

economic climate and encompasses goals related to OGCBD programs.17

Business Opportunity Specialists are responsible for executing goals of 

their district office’s plan that are specific to their position. In addition to 

supporting OGCBD programs, Business Opportunity Specialists support 

other SBA programs and assist with district office administration and local 

market initiatives. According to agency officials, the time specialists spend 

working on their 8(a) portfolios ranges from 55 percent to 100 percent. As 

a result, specialists who do not support 8(a) full time may also support 

other OGCBD programs, as discussed in the following sections, and 

 13The duration of firm’s participation in the 8(a) program is 9 years. 

14A stated goal of the 8(a) program is to graduate firms that will go on to be successful in 

a competitive business environment. Annual reviews assess firms’ progress toward that 

goal.

15Business Opportunity Specialists are responsible for conducting annual and continuing 

eligibility reviews for the firms in their portfolio unless a firm is deemed high risk. High-risk 

firms are reviewed by OCE.

16According to SBA, in 2011 and 2012 a District Office Working Group assessed the 

workload of Business Opportunity Specialists and determined the optimum number of 

firms to be assigned each specialist. For more information, see GAO, Small Business 

Administration: Agency Should Assess Resources Devoted to Contracting and Improve 

Several Processes in the 8(a) Program, GAO-09-16 (Washington, D.C.; Nov. 21, 2008).

17Economic climate can include market focus, market participation, demographic analysis, 

geographic analysis, prime contractors, and business composition. 
Page 13 GAO-17-573 Small Business Administration

assist with other district office activities, such as developing a marketing 

and outreach plan specific to their district office.

HUBZone program. At the headquarters level, the Office of HUBZone 

within OGCBD administers the HUBZone program by certifying 

businesses as eligible to receive HUBZone contracts, maintaining a list of

qualified HUBZone small businesses that federal agencies can use to 

locate vendors, adjudicating protests of HUBZone eligibility, decertifying 

firms that no longer meet eligibility requirements, and conducting 

marketing outreach and training. In the field, each district office has a 

HUBZone liaison who serves as the program expert at the local level. 

Because Business Opportunity Specialists are responsible for marketing 

OGCBD’s other programs in addition to their 8(a) duties, some of them 

also work with or serve as the HUBZone liaison to help ensure that the 

HUBZone program is implemented according to internal operating 

procedures and statute and help ensure that relevant HUBZone program 

goals and objectives are accomplished. The HUBZone liaison is also 

responsible for completing site visits or program examinations for firms, 

and conducting program marketing outreach to and training for state and 

local acquisition, economic development, and small business 

communities.

WOSB and SDVOSB programs. At the headquarters level, the Office of 

Government Contracting within OGCBD publishes regulations for the 

WOSB program, conducts eligibility examinations of businesses that have 

received contracts, decides protests related to eligibility for a WOSB 

contract, conducts studies to determine eligible industries, and works with 

other federal agencies in assisting participating firms. The Office of 

Government Contracting also conducts SDVOSB eligibility protest 

reviews to help ensure that only eligible SDVOSBs receive contracts set 

aside for this group. The Office of Policy, Planning and Liaison issues 

regulations for the SDVOSB program and reports progress on the 

program’s set-aside goals. Because both programs are currently 

functioning as self-certifying programs, in which firms attest to their own 

eligibility to participate or obtain third-party certification, OGCBD does not 

make any determinations regarding firms’ eligibility prior to firms’
Page 14 GAO-17-573 Small Business Administration

receiving contract awards.18 In the field, Business Opportunity Specialist 

responsibilities for these programs are largely limited to marketing these 

programs to the community and working with local resource partners, 

such as women’s business centers and veteran’s business centers, to 

educate firms and contractors about the programs.19

Figure 1 illustrates the lines of reporting for field staff who implement 

SBA’s government contracting and business development programs.

 18The NDAA for Fiscal Year 2015 required SBA to give more authority to contracting 

officers to award sole-source contracts and to remove the self-certification option for 

WOSB firms. SBA took steps to increase contracting officers’ authority to award solesource contracts before implementing the full certification process. SBA issued a notice of 

proposed rule making in December 2015 but, as of May 2017, has not yet promulgated 

final regulations needed to eliminate self-certification. 

19Women’s business centers, small business development centers, and veterans’

business centers are local resource partners that provide assistance to small businesses 

and aspiring entrepreneurs. These centers are grant funded and provide outreach and 

training within the community. 
Page 15 GAO-17-573 Small Business Administration

Figure 1: Lines of Reporting and Working Relationships across OGCBD Headquarters and Field Staff

Note: Industrial specialists work in area offices and may be responsible for size protests, analysis of 

the capability of a small business to perform successfully under the contract, and ensuring small 

businesses in the timber industry have opportunities for government timber sales.

SBA officials we spoke to in OFO and OGCBD described benefits of the 

current field-office and reporting structure. For example, they told us that 

the current field-office structure provides a national presence that allows 

firms to engage with staff in district offices across the country. As 

previously mentioned, at least one district office is located in each state, 

with multiple offices in some states. In addition, OFO officials said the 

reporting structure, in which Business Opportunity Specialists who 

implement the 8(a) program report to OFO rather than to OGCBD, allows 

for staff to also support the goals of their district office, which may require 
Page 16 GAO-17-573 Small Business Administration

them to support local market duties and other SBA programs, in addition 

to supporting the firms in their 8(a) portfolio. Finally, SBA officials stated 

that the current structure helps to ensure that staff know their local market 

and can be responsive to local market needs as determined by their 

district director.

However, OGCBD officials told us that the current reporting structure can 

result in inconsistent program delivery for business development 

programs. They described efforts taken recently to improve program 

delivery by improving OGCBD’s communication with OFO and field staff, 

including the following:

• Weekly management calls now occur between headquarters-level 

staff from OGCBD and OFO. These calls mostly address policy 

changes or changes to OGCBD’s standard operating procedures.

• Monthly conference calls including Business Opportunity Specialists 

and OGCBD management have been instituted to address any 

updates to the program.

• Monthly training refresher calls sponsored by the Office of Business 

Development have been implemented to provide training refreshers in 

addition to an opportunity to discuss program concerns or 

suggestions.

• Monthly HUBZone calls occur to monitor site visits and discuss 

complex fact patterns that may arise in connection with eligibility 

compliance.

• Business Opportunity Specialists were invited to attend a Department 

of Defense government contracting training session alongside 

OGCBD staff.

However, information from SBA’s 2015 and 2016 Field Accountability 

Reviews indicate that communication issues may be ongoing.20 For 

example, one deputy district director said that conference calls are 

confusing, lack consistency, and do not provide up-to-date process 

changes. This deputy district director also noted that the calls did not 

 20Field Accountability Reviews assist district directors in improving their office’s efficiency 

and effectiveness. A team comprised of district and program office staff members serving 

as subject-matter experts conducts a compliance review for a 3 to 4 day period. The 

reviews examine key operational and programmatic functions; ensure that compliance 

review requirements are met; determine the level of support and assistance provided to a 

district office’s clients; and measure and identify interactions with community, business, 

economic, and academic organizations and congressional staff.
Page 17 GAO-17-573 Small Business Administration

cover all OGCBD programs and said that district field office staff were 

unaware of changes to WOSB and SDVOSB programs. Another district 

director said that communication breakdowns can occur when program 

offices schedule webinars, conference calls, and training activities that 

conflict with one another. Because the communications changes were 

implemented recently, it may be too soon to tell if they are having the 

intended effect.

In September 2015, we issued a report that was based on a broad review 

of management challenges at SBA, including OGCBD.21 In this 2015 

report, we found that working relationships between headquarters and 

field offices that differ from reporting relationships can potentially pose 

programmatic challenges. At that time, SBA told us it had committed to 

assessing its organizational structure but had not yet completed those 

efforts. We recommended that SBA document the assessment of the 

agency’s organizational structure, including any necessary changes to, 

for example, better ensure that areas of authority, responsibility, and lines 

of reporting are clear and defined. As of May 2017, SBA had not provided 

documentation of such an assessment or of its decision making about the 

need for changes to its organizational structure. We maintain that such an 

assessment is needed to help ensure that SBA’s structure supports its 

mission efficiently and effectively.

Over the past decade, we and SBA’s OIG have identified a number of 

weaknesses in the processes SBA uses to certify and recertify 

businesses as being eligible to participate in its HUBZone, 8(a), and 

WOSB programs and have made recommendations to SBA to address 

them. SBA has addressed a number of these recommendations; 

however, some remain outstanding.22

SBA has made some improvements to address problems we identified 

with the HUBZone program’s certification and recertification processes. 

For example, in June 2008 we reported that, for its HUBZone certification 

process, SBA relied on data that firms entered in the online application 

 21GAO-15-347. 

22Appendix II provides a summary of past recommendations related to SBA’s certification 

programs. 

SBA Has Made 

Improvements to Its 

Certification 

Processes, but Some 

Weaknesses Remain

HUBZone Program
Page 18 GAO-17-573 Small Business Administration

system and performed limited verification of the self-reported 

information.23 Although agency staff had the discretion to request 

additional supporting documentation, SBA did not have specific guidance 

or criteria for such requests. Consequently, we recommended that SBA 

develop and implement guidance to more routinely and consistently 

obtain supporting documentation upon application. In response to that 

recommendation, SBA revised its certification process, and since 2009 

has required firms to provide documentation, which SBA officials review 

to determine the firms’ eligibility for the HUBZone program. SBA then 

performs a full-document review on all applications as part of its initial 

certification process to determine firms’ eligibility for the program. We 

have closed this recommendation as implemented.24

We have also identified a number of concerns with SBA’s HUBZone 

recertification process.25 For example, in February 2015 we reported that 

SBA relied on firms’ attestations of continued eligibility and generally did 

not request supporting documentation as part of the recertification 

process.26 SBA only required firms to submit a notarized recertification 

form stating that their eligibility information was accurate. SBA officials did 

not believe they needed to request supporting documentation from 

recertifying firms because all firms in the program had undergone a full 

document review, either at initial application or during SBA’s review of its 

legacy portfolio in fiscal years 2010–2012.27 However, as we found, the 

characteristics of firms and the status of HUBZone areas—the bases for 

program eligibility—often can change and need to be monitored. As a 

result, we concluded that SBA lacked reasonable assurance that only 

qualified firms were allowed to continue in the HUBZone program and 

 23GAO, Small Business Administration: Additional Actions Are Needed to Certify and 

Monitor HUBZone Businesses and Assess Program Results, GAO-08-643 (Washington, 

D.C.: June 17, 2008).

24SBA began implementing its full document review during fiscal year 2009. We reported 

in February 2015 that the revised process SBA implemented resulted in delays in 

processing applications—81 percent of the 4,809 initial applications submitted between 

fiscal year 2009 and 2013 that we reviewed exceeded SBA’s processing goal of 90 days. 

For more information, see GAO, HUBZone Program: Oversight Has Improved but Some 

Weaknesses Remain, GAO-17-456T (Washington, D.C.: Mar. 2, 2017).

25See GAO-08-643 and GAO-15-234. 

26GAO-15-234. 

27According to agency officials, SBA conducted the portfolio review to verify that firms 

certified before SBA implemented the full document review complied with the program’s 

eligibility requirements.
Page 19 GAO-17-573 Small Business Administration

receive preferential contracting treatment. We recommended that SBA 

reassess the recertification process and implement additional controls, 

such as developing criteria and guidance on using a risk-based approach 

to requesting and verifying firm information.

In following up on this recommendation for our March 2016 report on 

opportunities to improve HUBZone oversight, we found that SBA had not 

yet implemented guidance for when to request supporting documents) for 

the recertification process because SBA officials believed that any 

potential risk of fraud would be mitigated by site visits to firms.28

According to data that SBA provided, the agency visited a fraction of 

certified firms each year during fiscal years 2013 through 2015. SBA’s 

reliance on site visits alone did not mitigate the recertification weaknesses 

that were the basis for our recommendation. The officials also cited 

resource limitations. In recognition of SBA’s resource constraints, we 

reiterated in our March 2016 report that SBA could apply a risk-based 

approach to its recertification process to review and verify information 

from firms that appear to pose the most risk to the program. In addition, 

as of February 2017, SBA officials told us that the agency had begun 

implementing a technology-based solution to address some of the 

ongoing challenges with the recertification process.29 The officials 

expected that the new solution would help them better assess firms and 

implement risk-based controls by the end of calendar year 2017.30 As of 

May 2017, this recommendation remains open.

We also found in June 2008 and again in February 2015 that the 

recertification process was backlogged—that is, firms were not being 

recertified within the required 3-year time frame.31 In 2015, we reported 

that as of September 2014, SBA was recertifying firms that had been first 

certified 4 years previously. While SBA initially eliminated the backlog 

following our 2008 report, according to SBA officials the backlog recurred 

due to limitations with the program’s computer system and resource 

constraints. Consequently, in February 2015 we again recommended that 

 28GAO, HUBZone Program: Actions Taken on February 2015 GAO Recommendations, 

GAO-16-423R (Washington, D.C.: Mar. 24, 2016).

29GAO, HUBZone Program: Oversight Has Improved but Some Weaknesses Remain, 

GAO-17-456T (Washington, D.C.: Mar. 2, 2017).

30GAO-17-456T.

31See GAO-15-234 and GAO-08-643. 
Page 20 GAO-17-573 Small Business Administration

SBA take steps to ensure that significant backlogs would not recur. In 

response to the recommendation, SBA made some changes to its 

recertification process. For example, instead of manually identifying firms 

for recertification twice a year, SBA automated the notification process, 

enabling notices to be sent daily to firms (to respond to and attest that 

they continued to meet the eligibility requirements for the program). 

According to SBA officials, as of February 2017 this change had not yet 

eliminated the backlog.

SBA has made improvements to address problems we identified with the 

8(a) program’s process to help ensure firms’ continuing eligibility. In a 

March 2010 report, we made six recommendations to improve SBA’s 

monitoring of and procedures used in assessing the continuing eligibility 

of firms to participate in and benefit from the 8(a) program.32 SBA has 

taken steps to address the six recommendations, and we have closed all 

six as implemented. For example, we recommended that SBA monitor 

and provide additional guidance and training to district offices on the 

procedures used to determine continuing eligibility. In response to this 

recommendation, SBA issued revised regulations that provided additional 

8(a) program eligibility requirements and criteria related to size standards, 

indicators of economic disadvantage, and other thresholds businesses 

must meet to maintain eligibility. In addition, SBA indicated that under its 

Field Accountability Review program it conducts oversight of SBA district 

offices using audit-like steps to measure performance and compliance 

regarding federal statutory mandates, regulations, and SBA policy and 

procedures. According to SBA, one of the areas covered by the Field 

Accountability Review on-site visits is the 8(a) annual compliance reviews 

of participating firms.

In April 2016, SBA’s OIG reported that SBA failed to properly document 

that 8(a) firms admitted into the program met all eligibility criteria.33 SBA’s 

OIG evaluated SBA’s eligibility determination process for admitting 48 

applicants in the 8(a) program between January 1, 2015, and May 31, 

2015, and found that 30 of the participants did not meet all of the eligibility 

criteria. SBA’s OIG found that SBA managers had overturned lower-level 

 32GAO, Small Business Administration: Steps Have Been Taken to Improve 

Administration of the 8(a) Program, but Key Controls for Continued Eligibility Need 

Strengthening, GAO-10-353 (Washington, D.C.: Mar. 30, 2010).

33Small Business Administration Office of Inspector General, SBA’s 8(a) Business 

Development Program Eligibility, 16-13 (Washington, D.C.: Apr. 7, 2016). 

8(a) Business 

Development Program
Page 21 GAO-17-573 Small Business Administration

reviewers’ recommendations for denial without fully documenting how all 

of the identified areas of eligibility concerns were resolved. SBA’s OIG 

recommended that SBA (1) clearly document its justification for approving 

or denying applicants into the 8(a) program, particularly when those

decisions differed from lower-level recommendations, and (2) provide 

documentation showing how eligibility concerns raised by lower-level 

reviewers were resolved for the 30 firms not documented. In response to 

the first recommendation, SBA noted in a written response to us that it 

had established a practice of noting a statement of difference in cases 

where decisions differed; however, the SBA OIG had yet to close this 

recommendation as of May 2017. According to the SBA OIG, this 

recommendation will remain open until this practice is documented in an 

SOP or desk guide for the program. In response to the second 

recommendation, SBA’s OIG noted that SBA provided the SBA OIG with 

documentation showing how the eligibility concerns were resolved for the 

30 firms not documented, and this recommendation was closed as 

implemented. SBA OIG officials told us that they plan to issue a report 

that summarizes their analysis of the documentation provided by SBA in 

June 2017.

SBA considers WOSB a self-certification program because firms selfcertify their eligibility to participate by uploading documentation into an 

online repository or seeking approval from a third-party certifier. In 

October 2014, we found that SBA performed minimal oversight of thirdparty certifiers for the WOSB program and had not developed procedures 

that provide reasonable assurance that only eligible businesses obtain 

WOSB set-aside contracts.34 As a result, we found that SBA cannot 

provide reasonable assurance that certifiers fulfill the requirements of 

their role and that firms that attest that they are eligible for the program 

are actually eligible. We made two recommendations in this report:

• SBA should establish and implement comprehensive procedures to 

monitor and assess performance of certifiers in accord with the 

requirements of the third-party certifier agreement and program 

regulations; and

• SBA should enhance examination of businesses that register to 

participate in the WOSB program, including actions such as

developing and implementing procedures to conduct annual eligibility 

 34GAO-15-54.

Women-Owned Small 

Business Program
Page 22 GAO-17-573 Small Business Administration

examinations, analyzing examination results and individual 

businesses found to be ineligible to better understand the cause of the 

high rate of ineligibility in annual reviews, and implementing ongoing 

reviews of a sample of all businesses that have represented their 

eligibility to participate in the program.

In response to our recommendations, SBA has taken some actions. For 

example, SBA created an SOP stating that third-party certifiers are 

subject to a compliance review by SBA at any time, and SBA has 

completed a review of the four authorized third-party certifiers. We 

continue to monitor SBA actions to address our recommendations.

SBA’s OIG has also identified weaknesses in the WOSB program. In May 

2015, SBA’s OIG reported that contract awards were made to potentially 

ineligible firms based on documentation in the WOSB online repository.35

SBA’s OIG reviewed 34 contract awards and found that 9 did not have 

documentation in the repository. In addition, SBA’s OIG found that of the 

25 awards that did have some documentation in the repository, a number 

did not include all of the required documentation or sufficient 

documentation to prove that the firm was controlled by women. SBA’s 

OIG recommended that SBA perform eligibility examinations on the firms 

identified in the report as potentially ineligible. According to SBA OIG 

officials, SBA completed the eligibility examinations on the firms identified 

as potentially ineligible and determined that 40 percent of these firms 

were not eligible to receive contracts under the WOSB program at the 

time of award. According to the SBA OIG, all recommendations from this 

report were closed as implemented.

The National Defense Authorization Act for Fiscal Year 2015 eliminated 

the self-certification process for the WOSB program and required SBA to 

give more authority to contracting officers to award sole-source 

contracts—that is, contracts that do not require competition. SBA 

completed a rule-making process to allow the program to award solesource contracts.36 Although SBA has provided an advanced notice of 

 35Small Business Administration, Office of Inspector General, Improvements Needed in 

SBA’s Management of the Women Owned Small Business Federal Contracting Program. 

15-10, (Washington, D.C.: May 14, 2015). 

36The preamble stated that SBA did not address the certification amendments from the 

NDAA for Fiscal Year 2015 because its implementation was more complicated and would 

be addressed in a separate rule making. Women-Owned Small Business Federal Contract 

Program. 80 Fed. Reg. 55019, 55019-55020 (September 14, 2015). 
Page 23 GAO-17-573 Small Business Administration

proposed rule making for the certification program, it has not implemented 

a process to eliminate self-certification as of May 2017. As a result of 

inadequate monitoring and controls, such as not implementing a full 

certification program, potentially ineligible businesses may continue to 

incorrectly certify themselves as WOSBs, increasing the risk that they 

may receive contracts for which they are not eligible. Even with this 

change in the NDAA, we maintain that recommendations related to 

strengthening oversight of third-party certifiers and enhancing 

examinations of WOSB firms are needed to help ensure that only eligible 

businesses participate in the WOSB program.

The timeliness of SBA’s rule-making process can vary due to the legal 

requirements that govern this process, among other factors. While 

agencies must adhere to the federal laws and executive actions that 

govern the federal rule-making process, each agency also has its own 

guidance and process for rule making. SBA relies on two SOP documents 

that outline procedures and responsibilities for rule making at the agency. 

One SOP on Federal Register documents identifies the procedures and 

responsibilities for obtaining internal clearance (the agreement of various 

offices within SBA and ultimately the signature of the Administrator) 

before publishing documents to the Federal Register, and includes details 

on how to format Federal Register proposed and final rules and the 

offices involved in reviewing documents. This SOP does not include 

specific information on required timelines for this process. The other SOP 

on SBA’s Office of Executive Secretariat includes, in part, additional 

information on clearance procedures before documents can be published 

in the Federal Register.37 This SOP includes limited information on 

internal deadlines, including that documents must be cleared by this office 

within 15 days of being initiated in SBA’s internal tracking system, with 

any documents needing re-clearance requiring an additional 5 days.

SBA’s Office of Policy, Planning and Liaison (OPPL) works with SBA’s 

Office of General Counsel (OGC) and other internal subject-matter 

experts to draft and promulgate rules. OPPL has one director and two 

other staff members dedicated to rule making, and one of the two staff 

members is solely responsible for working with OMB’s FAR Council. SBA 

officials described their rule-making process as follows:

 37SBA’s Office of Executive Secretariat is the correspondence control and review arm of 

all incoming and internally generated correspondence requiring the attention of the Office 

of the Administrator, Deputy Administrator, and Chief of Staff.

Legal Requirements 

and Volume, among 

Other Factors, Affect 

the Timeliness of 

SBA’s Rule-Making 

Actions
Page 24 GAO-17-573 Small Business Administration

• OPPL relies on staff from OGC to draft the rule and then prepares the 

rule for OGCBD clearance and ultimately for agency-wide clearance 

by the Administrator.

• After receiving comments from SBA’s Office of Advocacy, SBA’s OIG, 

and other offices, OPPL prepares a memorandum to the Administrator 

for the Administrator’s review and clearance.38

• Then, if the rule is determined by OIRA to be a significant regulatory 

action as defined by Executive Order 12866, the rule must go to OMB 

for an interagency review process managed by OMB, in which other 

federal agencies can provide comments and questions on SBA’s rule. 

This interagency review period requires 90 days, but the actual 

amount of time for this review varies. Sometimes the rule may be sent 

back to SBA where the process starts over again. According to SBA 

officials, if other agencies have no comments, the interagency review 

period can take 4 to 5 months.

• After the proposed rule passes interagency review, it goes back 

through OGCBD clearance and agency-wide clearance by the 

Administrator before being added to the Federal Register for public 

comment. OGC summarizes the public comments and drafts the final 

rule, and the final rule goes back to OGCBD and then the SBA 

Administrator for review before it is again sent to OMB for an 

additional review process. After these reviews are completed, the rule 

is then published in the Federal Register.

Rules that only apply to SBA (and that do not need to go to OMB to 

amend the FAR) have an effective date 30 days after issuance. For rules 

that amend the FAR, a statement is drafted by OPPL and the FAR team 

drafts proposed and final rules. It takes the FAR Council at least a year 

between proposed and final rule to complete a FAR amendment, 

according to SBA staff.

For SBA and the federal government more broadly, certain stages of the 

rule-making process have mandated time periods, as shown in figure 2. 

For example, the public comment period recommended by Executive 

Order 12866 is 60 days. In addition, the interagency comment period 

managed by OMB requires 90 days, and this review can occur prior to the 

publishing of both the proposed rule and the final rule. Other stages have 

 38SBA’s Office of Advocacy advances the views, concerns, and interests of small 

businesses before Congress, the White House, federal agencies, federal courts, and state 

policy makers.
Page 25 GAO-17-573 Small Business Administration

no time requirements but also add to the overall length of the process, 

such as the time required to research, analyze, and draft a proposed rule.

Figure 2: Selected Time Requirements within the Federal Rule-making Process

Note: Diagonal lines indicate minimum time requirements.
Page 26 GAO-17-573 Small Business Administration

Timelines for promulgating rules varied across four finalized SBA rules we 

reviewed. We selected four statutory provisions requiring SBA to 

promulgate rules from the NDAAs for fiscal years 2013, 2014, 2015, and 

2016 (out of a possible 47 provisions requiring rule making) for review to 

better understand SBA’s rule-making process. All four of these rules have 

been finalized by SBA. Table 1 identifies the four rules we reviewed and 

some basic time frames for each rule.

Table 1: Key Timelines Associated with Selected Small Business Administration (SBA) Rules 

Rule Description of rule 

Enactment of 

requiring 

legislation

Interagency 

review 

acceptance 

Interagency 

review 

completed

Proposed rule 

issued

Final rule 

issued 

All Small MentorProtégé Programs 

(National Defense 

Authorization Act 

(NDAA) FY2013) 

Implements a nearly 

government-wide 

mentor-protégé 

program for 

qualifying all small 

businesses 

January 2, 

2013 

August 26, 2014 December 11, 

2014

(107days)

February 5, 

2015

July 25, 

2016 

Limitations on 

Subcontracting

(NDAA FY2013) 

Permits similarly 

situated entities to 

count in determining 

whether an 

applicable limitation 

on subcontracting is 

met

January 2, 

2013 

June 17, 2014 November 20, 

2014

(156 days)

December 29, 

2014

May 31, 

2016 

Advisory Size 

Decisions

(NDAA FY2013) 

Establishes safe 

harbor from fraud 

penalties for 

individuals or firms 

that misrepresent 

their size in certain 

situations 

January 2,

2013 

N/A N/A June 25, 2014 February 11, 

2015 

Lower Tier 

Subcontracting

(NDAA FY2014) 

Permits prime 

contractors to count 

lower tier 

subcontractors 

towards small 

business 

subcontracting goals 

December 26, 

2013 

June 16, 2015 September 9, 

2015

(85 days)

October 6, 2015 December 23,

2016 

Source: Small Business Administration and the Federal Register | GAO-17-573 

Note: The Advisory Size Decisions rule was deemed not significant, as defined by Executive Order 

12866, and therefore did not have to go to the Office of Management and Budget for interagency 

review.
Page 27 GAO-17-573 Small Business Administration

For these four rules, the rule-making process resulted in longer time 

frames than the required minimums along several metrics.

• Interagency Review. Three of the four rules we reviewed were 

identified as requiring the OMB interagency review process, which 

lasted longer than 90 days in some cases. Of these three rules, one 

(the Lower Tier Subcontracting rule) was under review with OMB for 

less than the required 90 day review period (86 days); the other two 

required 107 and 156 days for this review process. Further, these 

three rules also underwent an additional interagency review process 

after SBA had obtained public comments, which required an 

additional 68 to 75 days each.

• Public comment period. In addition, SBA officials noted that the 

public comment period varied in some cases, with extended comment 

periods being added as necessary. For example, for the All Small 

Mentor-Protégé rule, SBA initially provided a 60-day comment period, 

but extended it by an additional 30 days in response to public request. 

Likewise, for the Limitations on Subcontracting rule, SBA reopened 

the initial 60-day comment period for an additional 30 days starting 

about a week after the initial comment period ended.

• Statutory deadlines. Finally, three of the four rules arose from 

statutes that required the final rule to be issued within a set period of 

time. Both the All Small Mentor-Protégé rule and the Advisory Size 

Decisions rule were required to be issued as final within 270 days of 

the law’s enactment, while the Lower Tier Subcontracting rule 

required a final rule to be issued by 18 months after the date of 

enactment. The All Small Mentor-Protégé rule took 1,300 days from 

the date of the law’s enactment to the issuance of the final rule, which 

was 1,030 days past the statutory deadline. The Advisory Size 

Decisions rule took 770 days, which was 500 days past the statutory 

deadline. The Lower Tier Subcontracting rule took almost exactly 18 

months longer than the statutory deadline.

SBA officials noted some factors that may have contributed to certain 

rules taking longer than anticipated in recent years. They explained that 

the volume of rule making required of SBA has increased in recent years. 

Agency officials said they were used to receiving such legislation in 

stand-alone bills every couple of years until Congress began including 

rule-making requirements for SBA in NDAAs in fiscal year 2013. In written 

responses to our questions on the four selected rules, SBA officials noted 

that the three rules required by NDAA for Fiscal Year 2013 came at a 

time when they were busy completing rules required by the Small 

Business Jobs Act of 2010, thereby delaying the start of their work on the 
Page 28 GAO-17-573 Small Business Administration

new set of rules. In a congressional testimony in February 2016, the 

Associate Administrator of OGCBD stated that SBA had implemented 

over 25 provisions from the Small Business Jobs Act of 2010 and was 

making progress on the remaining provisions.39 OMB officials stated that 

the timeliness of SBA’s rule makings is not unusual and has not raised 

any concerns.

Additionally, SBA officials noted that some of the rules contained other 

statutory requirements that required additional work. Specifically, the All 

Small Mentor-Protégé program and the Limitations on Subcontracting 

rules included changes that affected Indian tribes, Alaska Native 

corporations, and Native Hawaiian organizations, which required SBA to 

consult with these groups in accordance with Executive Order 13175.40

Also, the Lower Tier Subcontracting rule required SBA, the General 

Services Administration, and the Department of Defense to submit a plan 

for implementing the rule to both House and Senate committees; the 

agencies were required to complete planned actions within 1 year after 

enactment, and SBA was required to issue any regulations necessary, 

including the completion of a FAR amendment, within 18 months after 

enactment. However, SBA officials said that the FAR Council generally 

will not open a FAR case until SBA has issued a final rule, making the 

accomplishment of this statutory deadline impracticable. SBA officials 

also cited some delays in rule making as a result of the recent 

presidential administration transition.

Generalizing about time frames in the rule-making process is difficult 

because the process varies from rule to rule. In an April 2009 report on 

the effect of procedural and analytical requirements on federal agencies’

rule-making processes, we found variation in the length of time required 

for the development and issuance of final rules, both within and across 

agencies.41 We identified several factors, including the complexity of the 

issues addressed; priorities set by agency management that can change; 

 39A. John Shoraka, Associate Administrator, Office of Government Contracting and 

Business Development, U.S. Small Business Administration, SBA Management Review: 

Office of Government Contracts and Business Development, testimony before the House 

Subcommittee on Contracting and Workforce, 114th Cong., 2nd sess., February 3, 2016.

40Executive Order 13175 requires that federal departments and agencies consult with 

Indian tribal governments when considering policies that would affect tribal communities.

41GAO, Federal Rulemaking: Improvements Needed to Monitoring and Evaluation of 

Rules Development as Well as to the Transparency of OMB Regulatory Reviews,

GAO-09-205 (Washington, D.C.: Apr. 20, 2009).
Page 29 GAO-17-573 Small Business Administration

and the amount of internal and external review required. Additionally, 

SBA officials noted that some rules receive many more comments than 

others, which can add significantly to the timeline.

Various approaches exist for measuring the length of time required to 

develop and issue final rules, but they have limitations.

• Initiation to final publication. The most complete measure of the 

length of time for a rule making is to measure the period from initiation 

of the rule to final publication, but this approach is limited by 

disagreement as to when a rule-making process begins. According to 

our prior work, while agency officials generally agreed that the 

publication of a final rule marked the end of the rule-making process, 

identifying when a rule making begins is less definite.42 Specifically, 

while each agency identifies milestones that mark the initiation of a 

rule making, they may not factor in the time spent researching the rule 

makings or developing policy for the rule, as well as time spent 

researching rule makings related to the rule in question.

• Publication in Federal Register to final publication. Another 

approach to measuring the time required for a rule making is to use 

two rule-making milestones common among federal agencies: (1) 

publication of a proposed rule in the Federal Register and (2) 

publication of a final rule. However, this measurement is incomplete, 

as it ignores the potentially substantial length of time necessary for 

regulatory development, according to our April 2009 report.43 In that 

report, our case study of 16 rules suggested that this time frame 

ranged from approximately 6 months to 5 years, while the total rulemaking time for the two rules on either end of that range varied from 

slightly over 1 year to 13 years, respectively. For our current review of 

four selected SBA rules, the time between the publication of proposed 

and final rules ranged from 7.5 months to 17.5 months.

• Mandated timeline. Finally, another approach is to evaluate each 

rule against its mandated timeline, although this requirement does not 

exist for all rules. However, the various factors that can affect rulemaking timeliness can limit the meaningfulness of this analysis. For 

example, although our April 2009 report found that rules that are a 

management priority or that have a statutory or judicial deadline may 

move more quickly through the rule-making process while other rules 

 42GAO-09-205.

43GAO-09-205. 
Page 30 GAO-17-573 Small Business Administration

are set aside, this analysis must factor in the overall volume of 

required rule makings and the relative priorities and rule-making 

caseload for the agency.

We are not making new recommendations in this report and maintain that 

SBA should implement our prior reports’ recommendations.44 We 

provided a draft of this report to SBA for review and comment. The 

agency provided technical comments that we incorporated as 

appropriate.

We are sending copies of this report to the appropriate congressional 

committees, the Administrator of the Small Business Administration, and 

the Director of the Office of Management and Budget. The report is also 

available at no charge on the GAO website at http://www.gao.gov.

If you or your staff members have any questions about this report, please 

contact me at (202) 512-8678 or shearw@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. Major contributors to this report are listed in 

appendix III.

William B. Shear

Director, Financial Markets and

Community Investment

 44Appendix II provides a summary on SBA’s status in implementing our past 

recommendations related to the certification programs (HUBZone, 8(a), and WOSB).

Agency Comments
Appendix I: Objectives, Scope, and 

Methodology

Page 31 GAO-17-573 Small Business Administration

This report examined (1) the field-office and reporting structure the Small 

Business Administration (SBA) uses to implement government 

contracting and business development and the benefits and challenges 

posed by these structures; (2) progress SBA has made to strengthen its 

certification processes; and (3) the timeliness of SBA’s rule-making 

process.

To examine SBA’s field-office and reporting structure for implementing its 

government contracting and business development programs, we 

reviewed SBA documentation on its organizational structure. In addition, 

we obtained and reviewed a March 2015 study on SBA’s organizational 

structure conducted by a third-party consultant. We also reviewed 

academic literature on organizational theory to provide context for 

understanding SBA’s organizational structure and leading practices for 

implementing changes to organizational structure. We conducted this 

literature search on organizational structure and theory and reviewed 

these articles to determine the extent to which they were relevant to our 

engagement and appropriate as evidence for our purposes. We also 

observed two online webinars hosted by SBA on government contracting 

for small businesses to better understand SBA’s communications to firms 

about its government contracting services. Further, we reviewed prior 

GAO and SBA Office of Inspector General (OIG) reports from 2008 

through 2016 for findings related to SBA’s organizational structure and 

the benefits and challenges posed by its current structure.1 In addition, 

we interviewed SBA staff from the following headquarters offices: Office 

of Government Contracting and Business Development, Office of 

Certification Eligibility, Office of Field Operations, Office of the Chief 

Human Capital Officer, and Office of Policy, Planning, and Liaison, as 

well as the Administrator’s Chief of Staff. We interviewed SBA staff to 

obtain their perspectives on SBA’s current organizational structure with 

respect to government contracting and business development 

programming.

 1

GAO, Small Business Administration: Leadership Attention Needed to Overcome 

Management Challenges, GAO-15-347 (Washington, D.C.: Sept. 22, 2015); Small 

Business Contracting: Opportunities Exist to Further Improve HUBZone Oversight,

GAO-15-234 (Washington, D.C.: Feb. 12, 2015); Women-Owned Small Business Program 

Certifier Oversight and Additional Eligibility Controls Are Needed, GAO-15-54 

(Washington, D.C.: Oct. 8, 2014); Small Business Administration: Views on Operational 

Effects of Closing Regional Offices, GAO-15-369 (Washington D.C.: Sept. 22, 2015); and 

Small Business Administration: Agency Should Assess Resources Devoted to Contracting 

and Improve Several Processes in the 8(a) Program, GAO-09-16 (Washington, D.C.: Nov. 

21, 2008).

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 32 GAO-17-573 Small Business Administration

To examine the progress SBA has made to strengthen its processes for 

certifying small businesses as eligible to participate in its programs, we 

reviewed relevant laws, regulations, and agency guidance. We 

specifically examined SBA’s certification processes for its 8(a) Business 

Development and Historically Underutilized Business Zone (HUBZone) 

programs, as well as its self-certification processes for the WomenOwned Small Business (WOSB) and Service-Disabled Veteran-Owned 

Small Business (SDVOSB) programs. We also interviewed SBA 

headquarters staff to understand these different certification processes 

and to obtain their perspective on the progress that has been made to 

strengthen these processes. In addition, we reviewed prior GAO and SBA 

OIG work related to SBA’s certification processes to identify progress that 

has been made as well as opportunities to further strengthen these 

processes. See appendix II for more information on the status of selected 

prior GAO recommendations to SBA.

To examine the timeliness of SBA’s rule making, we reviewed relevant 

laws, regulations, executive actions, and SBA guidance. We also 

reviewed four statutorily mandated SBA rules, selected from a possible 

47 provisions in the National Defense Authorization Acts of fiscal years 

2013, 2014, 2015, and 2016 that potentially required SBA to draft and 

implement rules. We selected these rules as examples of mandatory rule 

making. We reviewed the public documentation for each rule, including 

any proposed or final rules, as well as the timelines associated with each 

rule. We also interviewed SBA staff and staff from the Federal Acquisition 

Regulatory (FAR) Council within the Office of Management and Budget 

(OMB) to understand SBA’s regulatory drafting process, the Federal 

Acquisition Regulation (FAR) process, and the coordination between SBA 

and the FAR Council. Finally, we reviewed prior GAO reports on rule 

making to understand the federal rule-making process and factors 

affecting the timeliness of agency rule making.2

We conducted this performance audit from August 2016 to June 2017 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

 2

GAO, Federal Rulemaking: Improvements Needed to Monitoring and Evaluation of Rules 

Development as Well as to the Transparency of OMB Regulatory Reviews, GAO-09-205 

(Washington, D.C.: Apr. 20, 2009) and Federal Rulemaking: Agencies Could Take 

Additional Steps to Respond to Public Comments, GAO-13-21 (Washington, D.C.: Dec. 

20, 2012). 
Appendix I: Objectives, Scope, and 

Methodology

Page 33 GAO-17-573 Small Business Administration

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Summary and Status of Previous 

GAO Recommendations

Page 34 GAO-17-573 Small Business Administration

The following table summarizes the status of our recommendations from 

HUBZone, 8(a), and WOSB performance audits and investigations as of 

May 2017. We classify each recommendation as either

• closed, implemented;

• open (the agency has not taken steps to implement the 

recommendation): or

• closed, not implemented (the agency decided not to take action to 

implement the recommendation).

The recommendations are listed by report.

Table 2: Summary and Status of Previous GAO Recommendations 

Product number Product title GAO recommendation Status 

GAO-15-234 Small Business 

Contracting: 

Opportunities Exist to 

Further Improve 

HUBZone Oversight

To improve SBA’s administration and oversight of the HUBZone 

program and reduce the risk that firms that no longer meet 

program eligibility criteria receive HUBZone contracts, the 

Administrator of SBA should establish a mechanism to better 

ensure that firms are notified of changes to HUBZone 

designations that may affect their participation in the program, 

such as ensuring that all certified firms and newly certified firms 

are signed up for the broadcast e-mail system or including more 

specific information in certification letters about how location in a 

redesignated area can affect their participation in the program. 

Open 

GAO-15-234 Small Business 

Contracting: 

Opportunities Exist to 

Further Improve 

HUBZone Oversight

To improve SBA’s administration and oversight of the HUBZone 

program and reduce the risk that firms that no longer meet 

program eligibility criteria receive HUBZone contracts, the 

Administrator of SBA should conduct an assessment of the 

recertification process and implement additional controls, such 

as developing criteria and guidance on using a risk-based 

approach to requesting and verifying firm information, allowing 

firms to initiate the recertification process, and ensuring that 

sufficient staff will be dedicated to the effort so that a significant 

backlog in recertifications does not recur.

Open 

GAO-15-54 Women-Owned Small 

Business Program: 

Certifier Oversight and 

Additional Eligibility 

Controls Are Needed

To improve management and oversight of the women-owned 

small business (WOSB) program, and to help ensure the 

effective oversight of third-party certifiers, the Administrator of 

SBA should establish and implement comprehensive procedures 

to monitor and assess performance of certifiers in accord with 

the requirements of the third-party certifier agreement and 

program regulations.

Open 

Appendix II: Summary and Status of 

Previous GAO Recommendations
Appendix II: Summary and Status of Previous 

GAO Recommendations

Page 35 GAO-17-573 Small Business Administration

Product number Product title GAO recommendation Status 

GAO-15-54 Women-Owned Small 

Business Program: 

Certifier Oversight and 

Additional Eligibility 

Controls Are Needed

To improve management and oversight of the WOSB program, 

and to provide reasonable assurance that only eligible 

businesses obtain WOSB set-aside contracts, the Administrator 

of SBA should enhance examination of businesses that register 

to participate in the WOSB program, including actions such as: 

(1) promptly completing the development of procedures to 

conduct annual eligibility examinations and implementing such 

procedures; (2) analyzing examination results and individual 

businesses found to be ineligible to better understand the cause 

of the high rate of ineligibility in annual reviews, and determine 

what actions are needed to address the causes; and (3) 

implementing ongoing reviews of a sample of all businesses that 

have represented their eligibility to participate in the program.

Open 

GAO-10-353 Small Business 

Administration: Steps 

Have Been Taken to 

Improve 

Administration of the 

8(a) Program, but Key 

Controls for Continued 

Eligibility Need 

Strengthening

To improve the monitoring of and procedures used in assessing 

the continuing eligibility of firms to participate in and benefit from 

the 8(a) program, and to help ensure greater consistency in 

carrying out annual review procedures and improve the overall 

quality of these reviews, the SBA Administrator should monitor, 

and provide additional guidance and training to, district offices 

on the procedures used to determine continuing eligibility, 

including (1) taking appropriate action when firms exceed four of 

seven industry size averages, including notifying firms the first 

year and enforcing procedures relating to early graduation of 

firms that exceed industry averages for 2 consecutive years, (2) 

obtaining appropriate supervisory signatures to finalize annual 

review decisions, (3) submitting remedial action plans or a 

waiver for firms in the transition phase that did not meet 

business activity targets, (4) graduating firms that exceed the net 

worth threshold of $750,000, (5) performing timely eligibility 

reviews in required cases, and (6) completing required annual 

reviews.

Closed, 

implemented 

GAO-10-353 Small Business 

Administration: Steps 

Have Been Taken to 

Improve 

Administration of the 

8(a) Program, but Key 

Controls for Continued 

Eligibility Need 

Strengthening

To improve the monitoring of and procedures used in assessing 

the continuing eligibility of firms to participate in and benefit from 

the 8(a) program, and to help reduce inconsistencies between 

districts and business development specialist staff in annual 

review procedures requiring judgment, SBA should review its 

existing 8(a) program regulations and its proposed changes with 

the intent of providing additional criteria and examples for staff 

when assessing key areas of program eligibility and determining 

whether a firm should be graduated from the program when it 

exceeds size standards, industry averages (such as total assets, 

net sales, working capital, or pretax profit), limits for personal 

compensation and assets, and excessive withdrawals.

Closed, 

implemented 
Appendix II: Summary and Status of Previous 

GAO Recommendations

Page 36 GAO-17-573 Small Business Administration

Product number Product title GAO recommendation Status 

GAO-10-353 Small Business 

Administration: Steps 

Have Been Taken to 

Improve 

Administration of the 

8(a) Program, but Key 

Controls for Continued 

Eligibility Need 

Strengthening

To improve the monitoring of and procedures used in assessing 

the continuing eligibility of firms to participate in and benefit from 

the 8(a) program, and to help address competing demands on 

8(a) resources, SBA should assess the workload of business 

development specialists to ensure that they can carry out all 

their responsibilities. As part of this assessment, SBA should 

review the roles and responsibilities of the BDSs to minimize or 

mitigate to the extent possible the potentially conflicting roles of 

advocacy for firms in the program with the responsibility of 

ensuring that only eligible firms are allowed to continue to 

participate in the program. In addition, SBA should review the 

size of the 8(a) portfolio for all business development specialists 

and, if necessary, determine what mechanisms should be used 

to prioritize or redistribute their workload.

Closed, 

implemented 

GAO-10-353 Small Business 

Administration: Steps 

Have Been Taken to 

Improve 

Administration of the 

8(a) Program, but Key 

Controls for Continued 

Eligibility Need 

Strengthening

To improve the monitoring of and procedures used in assessing 

the continuing eligibility of firms to participate in and benefit from 

the 8(a) program, and to reduce the practice of retaining firms 

that fail to submit annual review documentation as required, 

SBA should monitor the implementation of regulations relating to 

termination to see if they are achieving their purpose or whether 

business development staff need further guidance in interpreting 

the regulations. SBA should consider providing specific 

examples of what might be considered a pattern of failure to 

submit documentation as required.

Closed, 

implemented 

GAO-10-353 Small Business 

Administration: Steps 

Have Been Taken to 

Improve 

Administration of the 

8(a) Program, but Key 

Controls for Continued 

Eligibility Need 

Strengthening

To improve the monitoring of and procedures used in assessing 

the continuing eligibility of firms to participate in and benefit from 

the 8(a) program, and to better manage and monitor 

participation in the Mentor-Protégé program, including 

compliance with the number of allowable mentor and protégé 

firms, SBA should develop a centralized process to collect and 

maintain up-to-date and accurate data on 8(a) firms participating 

in the Mentor-Protégé program. SBA should consider 

incorporating information on Mentor-Protégé approvals, 

extensions, and dissolutions in existing electronic data systems 

used for the annual review process.

Closed, 

implemented 

GAO-10-353 Small Business 

Administration: Steps 

Have Been Taken to 

Improve 

Administration of the 

8(a) Program, but Key 

Controls for Continued 

Eligibility Need 

Strengthening

To improve the monitoring of and procedures used in assessing 

the continuing eligibility of firms to participate in and benefit from 

the 8(a) program, and to more fully use and leverage third-party 

complaints to identify potentially ineligible firms participating in 

the 8(a) program, the SBA Administrator should design and 

implement a standard process for documenting and analyzing 

complaint data.

Closed, 

implemented 

GAO-09-440 HUBZONE Program: 

Fraud and Abuse 

Identified in Four 

Metropolitan Areas

To establish an effective fraud prevention system for the 

HUBZone program, the Administrator of the SBA should 

expeditiously implement the recommendations from our June 

2008 report and ensure that appropriate policies and procedures 

are in place for the prompt reporting and referral of fraud and 

abuse to SBA's Office of Inspector General as well as SBA's 

Suspension and Debarment Official.

Closed, 

implemented 
Appendix II: Summary and Status of Previous 

GAO Recommendations

Page 37 GAO-17-573 Small Business Administration

Product number Product title GAO recommendation Status 

GAO-09-440 HUBZONE Program: 

Fraud and Abuse

Identified in Four 

Metropolitan Areas

To establish an effective fraud prevention system for the 

HUBZone program, the Administrator of the SBA should 

expeditiously implement the recommendations from our June 

2008 report and consider incorporating policies and procedures 

into SBA's program examinations for evaluating if a HUBZone 

firm is expending at least 50 percent of the personnel costs of a 

contract using its own employees.

Closed, not 

implemented 

GAO-09-440 HUBZONE Program: 

Fraud and Abuse 

Identified in Four 

Metropolitan Areas

To establish an effective fraud prevention system for the 

HUBZone program, the Administrator of the SBA should 

expeditiously implement the recommendations from our June 

2008 report and consider incorporating a risk-based mechanism 

for conducting unannounced site visits as part of the screening 

and monitoring process.

Closed, 

implemented 

GAO-09-440 HUBZONE Program: 

Fraud and Abuse 

Identified in Four 

Metropolitan Areas

To establish an effective fraud prevention system for the 

HUBZone program, the Administrator of the SBA should 

expeditiously implement the recommendations from our June 

2008 report and take appropriate enforcement actions on the 19 

HUBZone firms we found to violate HUBZone program 

requirements to include, where applicable, immediate removal or 

decertification from the program, and coordination with SBA's 

Office of Inspector General as well as SBA's Suspension and 

Debarment Official.

Closed, 

implemented 

GAO-09-16 Small Business 

Administration: 

Agency Should 

Assess Resources 

Devoted to 

Contracting and 

Improve Several 

Processes in the 8(a) 

Program

To improve its administration of the prime contracting, 

subcontracting, and 8(a) business development programs, the 

Administrator of SBA should assess resources allocated for 

procurement center representative and commercial market 

representative functions and develop a plan to better ensure that 

these staff can carry out their responsibilities.

Closed, 

implemented 

GAO-09-16 Small Business 

Administration: 

Agency Should 

Assess Resources 

Devoted to 

Contracting and 

Improve Several 

Processes in the 8(a) 

Program

To improve its administration of the prime contracting, 

subcontracting, and 8(a) business development programs, and 

to better educate prospective applicants for the 8(a) program 

and maximize limited SBA resources during program tenure of 

participants, the Administrator of SBA should take additional 

steps to ensure that firms applying for the program understand 

its requirements and have realistic expectations for participation. 

Such steps could include an education requirement, such as a 

seminar or assessment tool.

Closed, 

implemented 
Appendix II: Summary and Status of Previous 

GAO Recommendations

Page 38 GAO-17-573 Small Business Administration

Product number Product title GAO recommendation Status 

GAO-09-16 Small Business 

Administration: 

Agency Should 

Assess Resources 

Devoted to 

Contracting and 

Improve Several 

Processes in the 8(a) 

Program

To improve its administration of the prime contracting, 

subcontracting, and 8(a) business development programs, and 

in acknowledgment of the competing demands for business 

development specialists to complete required annual reviews of 

8(a) firms and support the mission of the 8(a) program—that is, 

develop and prepare small disadvantaged firms for procurement 

and other business opportunities—the Administrator of SBA 

should (1) assess the workload of business development 

specialists to ensure they can carry out their responsibilities. As 

part of such an assessment, SBA could review the size of the 

8(a) portfolio for all business development specialists and 

determine what mechanisms can be used to prioritize or 

redistribute their workload; (2) in a timely manner, develop and 

implement its proposed plan for creating tools that would assist 

in the provision of business development assistance for 8(a) 

firms; and (3) develop a timetable for planned changes to the 

termination process to ensure that staff monitoring 8(a) 

participants can carry out terminations from the program in a 

timely manner.

Closed, 

implemented 

GAO-09-16 Small Business 

Administration: 

Agency Should 

Assess Resources 

Devoted to 

Contracting and 

Improve Several 

Processes in the 8(a) 

Program

To improve its administration of the prime contracting, 

subcontracting, and 8(a) business development programs, and 

to increase the usefulness of surveillance reviews for the 8(a) 

program, the Administrator of SBA should update its guidance to 

incorporate regular reviews of 8(a) contracting in the scope of 

the reviews.

Closed, 

implemented 

GAO-08-643 Small Business 

Administration: 

Additional Actions Are 

Needed to Certify and 

Monitor HUBZone 

Businesses and 

Assess Program 

Results

To improve SBA’s administration and oversight of the HUBZone 

program, the Administrator of SBA should formalize and adhere 

to a specific time frame for processing firms proposed for 

decertification in the future.

Closed, 

implemented 

GAO-08-643 Small Business 

Administration: 

Additional Actions Are 

Needed to Certify and 

Monitor HUBZone 

Businesses and 

Assess Program 

Results

To improve SBA’s administration and oversight of the HUBZone 

program, the Administrator of SBA should establish a specific 

time frame for eliminating the backlog of recertifications and 

ensure that this goal is met, using either SBA or contract staff, 

and take the necessary steps to ensure that recertifications are 

completed in a more timely fashion in the future. 

Closed, 

implemented 

GAO-08-643 Small Business 

Administration: 

Additional Actions Are 

Needed to Certify and 

Monitor HUBZone 

Businesses and 

Assess Program 

Results

To improve SBA’s administration and oversight of the HUBZone 

program, the Administrator of SBA should develop and 

implement guidance to more routinely and consistently obtain 

supporting documentation upon application and conduct more 

frequent site visits, as appropriate, to ensure that firms applying 

for certification are eligible.

Closed, 

implemented 
Appendix II: Summary and Status of Previous 

GAO Recommendations

Page 39 GAO-17-573 Small Business Administration

Product number Product title GAO recommendation Status 

GAO-08-643 Small Business 

Administration: 

Additional Actions Are 

Needed to Certify and 

Monitor HUBZone 

Businesses and 

Assess Program 

Results

To improve SBA’s administration and oversight of the HUBZone 

program, the Administrator of SBA should take immediate steps 

to correct and update the map that is used to identify HUBZone 

areas and implement procedures to ensure that the map is 

updated with the most recently available data on a more 

frequent basis. 

Closed, 

implemented 

GAO-08-643 Small Business 

Administration: 

Additional Actions Are 

Needed to Certify and 

Monitor HUBZone 

Businesses and 

Assess Program 

Results

To improve SBA’s administration and oversight of the HUBZone 

program, the Administrator of SBA should further develop 

measures and implement plans to assess the effectiveness of 

the HUBZone program that take into account factors such as (1) 

the economic characteristics of the HUBZone area and (2) 

contracts being counted under multiple socioeconomic 

subcategories.

Closed, not 

implemented 

Source: GAO. | GAO-17-573.
Appendix III: GAO Contact and Staff 

Acknowledgments

Page 40 GAO-17-573 Small Business Administration

William B. Shear, (202) 512-8678, or shearw@gao.gov

In addition to the individual named above, Marshall Hamlett (Assistant 

Director), Nathan Gottfried (Analyst In Charge), JoAnna Berry, Tim Bober, 

Farrah Graham, Jennifer Kamara, Jessica Sandler, Jennifer Schwartz, 

and Jena Sinkfield made major contributions to this report.

Appendix III: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(101104)
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