THE COLORADO DISTRICT OFFICE’S
 SERVICING OF 8(A) BUSINESS 

DEVELOPMENT PROGRAM
 

PARTICIPANTS
 

Report Number: 10-15
 

Date Issued: September 30, 2010
 

Prepared by the
 

Office of Inspector General
 

U.S. Small Business Administration
 

This October 19, 2010 revised version of the Report is the same as the one 

publicly released on October 5, 2010 except that we have included information 

that was unintentionally omitted from the Management Comments section. 
u.s. Small Business Administration 

Office of Insnector General Memorandum 

To: 	 Jess Knox Date: September 30, 2010 

Associate Administrator 

Office of Field Operations 

Greg Lopez 
 

District Director 
 

Colorado District Office 
 

lsi Original Signed 
 

From: 	 Debra S. Ritt 
 

Assistant Inspector General for Auditing 
 

Subject: 	 The Colorado District Office's Servicing of 8(a) Business Development Program 

Participants, Report Number 10-15 

This report presents the results of our review of the Colorado District Office's 

servicing of 8(a) Business Development program participants. We conducted the 

review in response to a complaint the Office of Inspector General received on July 

13,2009, alleging that actions taken by the Colorado District Office hurt small 

businesses and wasted government resources. The complaint, which identified 

potential violations of 8(a) servicing rules between March 2007 and June 2009 

involving 12 companies,l alleged that the Colorado District Office was not: 

• 	 Taking steps to graduate and terminate 8(a) program participants when 

their Business Development Specialists (BDS) determined that they 

were no longer qualified to be in the program; 

• 	 Applying servicing procedures consistently, in a timely manner, and 

ensuring that past personal histories with the participant's owners did 

not influence servicing decisions; 

1 The original complaint alleged potentia18(a) violations involving 14 companies. However, after discussions with the 

complainant, it was agreed that only issues associated with 12 of the companies involved potential violations of 8( a) 

business development rules and regulations. Therefore, our review focused on the 12 companies. We also did not 

review personnel and other issues raised in the complaint that were not related to potential violations of 8(a) servicing 

rules. 
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• Ensuring that BDSs were knowledgeable of 8(a) program requirements; 

• Communicating with 8(a) participants in a professional manner; and 

• Properly collecting and reporting 8(a) contract data. 

To determine whether the Colorado District Office was appropriately graduating 

and terminating 8(a) firms, we reviewed actions taken by the district office relative 

to two firms identified in the complaint that allegedly should have been removed 

from the program based on criteria outlined in Agency regulations and Standard 

Operating Procedure (SOP) 80 05 3A, 8(a) Business Development. We also 

judgmentally selected four additional firms after discussions with the 

complainants and our Investigations Divisions and a review of SBA' s 8( a) data. 

To determine actions relative to these firms, we visited the Small Business 

Administration's (SBA) Colorado District Office where we reviewed the 8(a) files 

of the six companies and interviewed the Business Development Division staff 

and District Director. 

To determine whether the district office was applying servicing procedures 

consistently, we reviewed the 8(a) files of eight firms identified as having 

servicing issues. We also solicited feedback from 205 participant firms serviced 

by the Colorado District Office between 2007 and 2009, including those identified 

in the complaint, to obtain their opinion about the quality and timeliness of service 

provided by the district office. We obtained feedback from 39 firms, which 

equated to a 19 percent response rate. Because of the low response rate, the 

results could not be projected to the universe of 8(a) participants serviced by the 

Colorado District Office. Each of the 39 firms was asked uniform questions 

regarding the district office's assistance in developing their business and 

identifying procurement opportunities, and whether the participant would 

recommend the 8(a) program to others in their community. Participant firms were 

also asked to rate the service they received on a scale from 1 to 5 (1 being poor 

and 5 being excellent). Because participants wanted to remain anonymous, we did 

not validate their statements with district officials. We also reviewed the 8(a) and 

mentor protege agreement files that were maintained by the district office for the 

three companies identified in the complaint as having approved agreements. 

Further, we interviewed officials from SBA's Office of Business Development, 

Colorado District Office, and reviewed SBA Office of Hearing and Appeals case 

law related to similar situations outlined in the complaint. 

To determine whether BDSs were properly trained, we reviewed employee 

training documentation at the district office. The 39 participant firms we 

contacted were also asked their opinion about the district office's professionalism 

and their BDS's knowledge of the 8(a) program. Further, we reviewed office 
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staffing levels and determined the length of time that BDSs had served in their 

positions, and obtained feedback from 6 BDSs who had less than 2 years of 

experience with the 8(a) program regarding the level of training they were 

provided on program requirements. 

While one of the complaints concerned whether the district office was properly 

collecting and reporting 8(a) procurement data, we did not address this issue as we 

determined that district offices are not required to report 8(a) data to headquarters. 

Instead, SBA relies on procurement data from the Federal Procurement Data 

System. We also did not determine validity of personnel and other issues 

identified in the complaint because they were not related to potential violations of 

the 8(a) servicing rules. We conducted our review between September 2009 and 

August 2010 in accordance with Government Auditing Standards for attestation 

engagements prescribed by the Comptroller General of the United States. 

BACKGROUND 

The 8(a) program is a business development program authorized by the Small 

Business Act to help small disadvantaged businesses compete in Federal and 

private procurement arenas. Firms participating in the program may receive 

several types of assistance, including: sole source and competitive 8(a) contract 

support; financial assistance; the transfer of technology or surplus governmentowned property; training and technical assistance; and assistance in forming joint 

ventures and teaming arrangements with other business concerns for the purpose 

of obtaining contracting opportunities. 

The 8(a) program is delivered collaboratively between two offices within SBA. 

The Office of Business Development, located in Washington, D.C., issues 

program policy; processes applications for program participation; renders 

decisions on program eligibility, changes of ownership, and mentor-protege 

agreements; and releases participants from the program. The Office of Field 

Operations, through its district offices, services 8(a) participants to help them 

develop their businesses to the fullest extent possible to attain competitive 

viability. BDSs at each district office are responsible for providing ongoing 

management and technical assistance, identifying contract opportunities and 

accepting requirements, conducting annual reviews of participant 

accomplishments, determining whether participants are in compliance with 

program requirements, reviewing management and teaming agreements, rendering 

final determinations for joint ventures, and conducting site visits. 

During the period of time discussed in the complaint the district office was 

responsible for servicing approximately 205 8(a) participants. As of July 2010, 

167 participants were assigned to the district office. 
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RESUL TS IN BRIEF 

While many of the specific examples in the complaint were not substantiated by 

this audit, the Colorado District Office did not function as well as it should to 

provide consistent and worthwhile assistance to some of the companies in its 8(a) 

portfolio. Specifically, it did not apply servicing procedures consistently and 

timely for three of the eight firms reviewed. One firm should have been 

recommended for termination for non-compliance with the program's annual 

reporting requirements. Instead, the Colorado District Office accepted over $6.5 

million dollars in 8(a) procurements since May 2009 on the company's behalf. 

Another firm waited 10 months to obtain SBA approval of its mentor protege 

agreement. A third firm was allowed to receive a sole-source contract when it was 

ineligible to do so. Additionally, 23 of the 205 firms expressed general 

dissatisfaction with the district office because BDSs were not assigned or 

accessible, requests for assistance were not met timely or at all, and the quality of 

assistance was poor. Participants also complained that district officials would not 

return their phone calls or meet with them despite persistent requests, and that 

from August to October 2009 their access to the district office was restricted to 

only 2 days a week and by appointment only. During our visit to the office in 

January 2010, we noted that access to district office officials continued to be 

restricted. 

These servicing issues were due to staffing shortages, the Agency placing a higher 

priority on mandatory annual reviews than on servicing participants, and a lack of 

training. In early 2008, the district office was operating with only two BDSs. 

Although six additional employees were added in 2008 to better manage the 8( a) 

program, according to the District Director, they were used primarily to complete 

annual reviews. 

A summary of the allegations outlined in the complaint and our determination of 

their validity are outlined in Appendix I. A summary of 8(a) participant responses 

to our questions about the service provided by the district office is provided in 

Appendix II. 

SBA has recently taken several steps to expand district office goaling 

requirements for servicing 8( a) participants and has created a centralized Customer 

Relationship Management (CRM) system to track and facilitate interactions 

between SBA and its clients. SBA plans to mandate its use in November 2010. 

Performance goals linked to district office handling of customer requests will also 

be established. 

To address servicing issues noted in our review, we recommended that the 

Colorado District Office take steps to recommend for termination the firm 
5 

identified as no longer being eligible for the 8(a) program, minimize or end 

restrictions on participant access to the district office, and ensure that all 8( a) firms 

are assigned a BDS. We also recommended that the Associate Administrator for 

Field Operations immediately require the Colorado District Office to use CRM to 

track customer requests and monitor CRM status reports to ensure that requests are 

addressed timely. Finally, we recommended that the Associate Administrator 

determine the adequacy of training provided BDSs, take steps to address training 

shortfalls, annually administer a nationwide customer satisfaction survey and tie 

the survey results to District Director performance ratings, and determine whether 

district offices are appropriately staffed to provide for adequate servicing of 8(a) 

firms. 

Management commented that it views the report as an improvement opportunity, 

but noted that significant improvements have been made in the staffing, 

management, and control of the Colorado District Office since the review was 

completed. Therefore, management non-concurred with one recommendation, 

concurred with two others, partially concurred with one recommendation, and 

neither concurred nor non-concurred with four recommendations. Where 

management either non-concurred or did not express concurrence or nonconcurrence, actions were generally underway or improvements had already been 

made to address the deficiencies noted in the audit. Therefore, we consider 

management's comments to be fully responsive to all, but three, of the 

recommendations. 

RESULTS 

The District Office Generally Graduated or Terminated Ineligible Sea) Firms 

Of the six firms reviewed, we determined that three were candidates for 

graduation or termination and the other three were eligible to continue 8(a) 

participation. The Colorado District Office generally took appropriate action in 

reviewing five of these six firms. One firm should have been recommended for 

termination for non-compliance with the program's financial reporting 

requirements, but the district office has allowed it to participate without adequate 

justification. 

To remain eligible, participant firms must continue to be small and 

unconditionally owned and controlled during their 9-year tenure in the 8(a) 

program by one or more socially and economically disadvantaged individuals, 

who are of good character and citizens of the United States. Applicants must also 

annually submit data showing the financial condition of their firms and the 

personal net worth of the disadvantaged owners. Specifically, 13 CFR 124.602 

requires firms with December 31 st end-of-year reporting dates and gross annual 
6 

receipts of $1 million to $5 million to provide reviewed financial statements by 

March 30th . Firms with more than $5 million in gross annual receipts must submit 

audited financial statements by April 30th. Further, according to l3 CFR 

124.303(7), a pattern of failure to provide these statements may result in the firm's 

termination from the program. However, the participant may request a waiver to 

this requirement for good cause, including where it has experienced severe 

financial difficulties, which would make the cost of audited financial statements a 

particular burden or where it has had an unexpected sales increase at the end of the 

firm's fiscal year that creates an unforeseen requirement for audited financial 

statements. 

The Colorado District Office took appropriate action on five of the six firms. For 

example, it took appropriate actions on the two firms named in the complaint, 

recommending one for early graduation 2 months early because the president of 

the company was making excessive withdrawals, and allowing the other to remain 

in the program as there were no identified issues with the company. It also took 

appropriate actions on three of the four judgmentally selected firms. For example, 

it recommended one of the firms for termination for not submitting its business 

plan update, personal financial statements, corporate and individual tax return, and 

certifications relating to its program eligibility. Headquarters agreed with the 

district office's recommendation and informed the firm it would be terminated 

unless it provided the required documentation. The district office also properly 

determined that the remaining two firms continued to be eligible for the 8(a) 

program. 

The Colorado District Office did not recommend for termination one of the firms 

we judgmentally sampled, which was noncompliant with SBA's annual reporting 

requirements. The firm did not provide "reviewed" 2007 financial statements by 

the March 30,2008 deadline or "audited" 2008 financial statements by the April 

30, 2009 deadline. Audited financial statements contain vital information about 

business relationships and financial transactions that could affect the participant's 

continued eligibility for the 8(a) program and contract awards. Despite the firm's 

non-compliance with the program requirements for 2 consecutive years and 

repeated warnings from the BDS that it would be terminated for failure to adhere 

to the 8(a) reporting requirements, on September 24,2009, the Colorado District 

Office found the firm to be in compliance and retained the firm in the program. 

The BDS stated that instead of recommending termination of the non-compliant 

firm from the 8(a) program, she had stopped accepting 8(a) contracts on the 

company's behalf until it complied with program reporting requirements. For 

example, in May 2009, the firm was offered two contracts, but the BDS did not 

accept them due to the firm's continued non-compliance. The firm then requested 

a waiver from the financial statement reporting requirements, which was denied by 
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the District Director. Subsequently, the firm's president and accountant negotiated 

an agreement with the lead BDS and District Director where the firm would 

provide its 2007 and 200S financial statements within 3 weeks of the district 

office's acceptance of $735,000 in procurements on its behalf. Both the District 

Director and lead BDS believed that this was fair because SBA was in the business 

of helping small businesses. 

On June 1,2009, the District Director accepted the $735,000 in procurements on 

the firm's behalf, although the firm did not provide its 2007 financial statements 

until December 2009-nearly 7 months after the date promised-and had not 

provided its 200S audited financial statements. Between June 2009 and 

May 2010, the district office accepted three additional procurements totaling over 

$5.S million even though the firm had still not submitted its 200S audited financial 

statements. In total, over $6.5 million in procurements were accepted on the 

firm's behalf. These acceptances were made because the firm was technically "in 

good standing" as no suspension or termination actions had been taken. However, 

due to the firm's continued refusal to provide the required financial statements in a 

timely manner, the firm was in violation of its participation agreement, and was a 

candidate for termination from the Sea) program according to SBA regulations. 

The Colorado District Office Did Not Always Provide Accurate or Timely 

Servicing of its Sea) Firms 

The complaint alleged that eight firms were not being consistently and timely 

serviced by the district office, and that a personal history with one participant's 

owner was allowed to influence servicing decisions. Our review substantiated 

servicing issues with three of the eight firms. As previously discussed, we found 

that one firm was allowed to remain in the program, even though it continuously 

refused to submit the required financial statements, and that the district office 

inappropriately accepted over $6.5 million in contracts on behalf of the firm. In 

contrast, we noted between September 2009 and January 2010, the district office 

recommended termination of five firms that did not comply with the financial 

statement reporting requirements. 

The second firm was dissatisfied with the service it received because it took 

10 months to have its mentor protege agreement approved, which resulted in the 

firm missing the solicitation deadline for a $90 million procurement. The BDS 

told us that because she had recently transferred into the BDS position, she needed 

the Lead BDS, who was the only one with mentor protege experience, to review 

the agreement. Because the Lead BDS was on extended leave, the mentor protege 

agreement did not get reviewed until almost 3 months after it was submitted. 

When the lead BDS ultimately reviewed it, it was determined that additional 

information was needed, and the agreement was returned to the participant. After 
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the applicant resubmitted its mentor protege application, the district office held the 

application for 2 months for the lead BDS's review. Ultimately the application 

was forwarded to headquarters without the lead BDS' s review about 3 weeks after 

the procurement's solicitation deadline. The application was subsequently 

rejected by headquarters and returned to the district office because it did not 

comply with the templates located on SBA's Business Development Share Portal. 

Two months later the agreement was re-submitted to headquarters for approval. 

The agreement was ultimately approved 5 months after the procurement 

solicitation deadline. 

For the third firm, we determined that in February 2008, the Colorado District 

Office improperly accepted a $3,488,000 procurement on behalf of a business that 

did not meet its applicable competitive business mix target for the completed 

program year. In its July 9,2007 annual review letter, the Colorado District 

Office found that the firm was ineligible for sole source 8(a) contracts in the 

current program year. However, on February 1, 2008 the district office accepted a 

contract on behalf of the firm even though the company had not brought itself into 

compliance. 

The complaint also alleged that a mentor protege agreement for a fourth firm was 

disapproved because the District Director stated he would never approve a mentor 

protege agreement that would benefit the mentor because the mentor did not 

financially support his political campaign when he had run for mayor of a city. 

The District Director denied making the comment, while the individual he 

allegedly made the comment to confirmed it, but told us there were no other 

witnesses. Regardless of whether the comment was made, we determined that the 

disapproval was justified on the basis that the arrangement did not benefit the 

protege, indicating that the District Director's actions were appropriate. 

In addition to examining the specific complaints involving the 8 firms, we asked 

205 participants to give us their opinions on the quality of the service provided by 

the Colorado District Office. We obtained feedback from 39 firms. Participant 

responses to our questions about the quality of service provided the district office 

is summarized in Appendix II. In summary, 24 of the 39 firms stated they were 

dissatisfied with the servicing provided by the Colorado District Office because 

BDSs were not assigned or accessible, requests for assistance were not met timely 

or at all, the quality of assistance was poor, and/or communication with the district 

office was limited to general e-mail distributions forwarding information. 

Specifically: 

• 	 17 firms responded that district officials would not return their phone calls 

or meet with them despite urgent and persistent requests, even those made 

to the District Director. Nine of the 17 firms stated that because they were 
9 

denied access to their BDSs, they had to seek assistance from SBA 

headquarters, consultants, lawyers, or their congressmen. Additionally, one 

of the nine firms named SBA as a defendant in a lawsuit, alleging that the 

Colorado District Office failed to properly service it as a participant in the 

8(a) program. That case has since been dismissed. The firms also 

complained that the District Director limited their access to the Colorado 

District Office to 2 days a week and by appointment only with assigned 

BDSs. For example, one firm told us it was not permitted to submit a joint 

venture application in person because according to the Lead BDS, the firm 

did not have an appointment, and therefore, did not have permission to be 

in the district office. 

• 	 10 firms reported that the district office was untimely in responding to their 

requests for service. Four firms stated they could not get timely approval of 

their joint venture or mentor protege agreements, and reported that the 

delays resulted in harm to their businesses, including the loss of 

procurement opportunities and revenue. For example, as discussed 

previously, one firm reported it missed a $90 million contracting 

opportunity because the BDS did not complete her review of the mentor 

protege agreement until 5 months past the solicitation deadline, even 

though the firm had submitted the agreement 5 months prior to the 

deadline. The other firm told us it is continuing to miss contracting 

opportunities because its BDS has not approved the mentor protege 

agreement, which was submitted to the district office in November 2008. 

In three of the cases, the BDS took between 6 months to 18 months to 

process the requests, and in the fourth case the BDS never responded. 

According to the Office of Business Development, it normally takes 3 to 4 

months to process a mentor protege agreement request and obtain 

headquarters approval. 

• 	 9 firms stated that communications with the district office were limited to 

e-mails that forwarded general information about the 8(a) program. Four of 

the nine firms stated that they also had not received site visits since joining 

the 8(a) program. 

• 	 10 firms stated that the quality of assistance provided by district office 

representatives was poor. For example, one firm indicated that when it 

asked how its company could benefit from the 8(a) program, the district 

office representative replied, "I don't know what to tell you." Another firm 

reported that it requested assistance many times and the district office 

refused to help. It also requested, but never received, a list of the services 

that the district office provided. 
10 

• 	 6 firms stated that they had not been assigned BDSs for a period of time 

and had been told by the District Director that BDS assignments would not 

be made because resources were not available. Four of the firms waited 7 

months, while one firm waited 9 months and one waited 1 year to be 

assigned a BDS. According to one firm, a BDS was ultimately assigned to 

every participant as a result of a meeting that the firm had with 

representatives from SBA's Office ofField Operations. Firms not assigned 

BDSs told us that when the District Director further limited access to the 

district office in August 2009, it was impossible to obtain any assistance. 

The servicing issues reported above were due to a variety of factors. First, in 2008 

the office was significantly understaffed and was operating with only two BDSs to 

service over 200 8(a) firms. The lead BDS had over 10 years of experience in the 

8(a) program and the other had less than 1 year of experience. To improve the 

overall management of the 8(a) program, during 2008 the District Director 

augmented his existing business development staff with four employees that were 

working in the Marketing Outreach Division of the district office and two new 

hires. However, none of the six individuals had prior experience with the 8(a) 

program. In addition, the lead BDS, who was the most knowledgeable about the 

8(a) program, was out of the office for extended periods of time, leaving the office 

to operate mostly with inexperienced staff. 

According to the District Director, the increased staffing was intended to ensure 

that all required annual reviews were completed to meet the district office's annual 

performance goal. At the time, the district office's performance metrics focused 

on meeting the annual review requirements and did not measure the district 

office's performance in other aspects of servicing. This was in response to an 

Agency initiative, introduced by the former Administrator, making compliance 

with statutory requirements, such as annual reviews, a priority and ensuring that 

programs operated effectively and efficiently. As a result, in FY 2009 the 

Business Development Division had one goal related to the 8(a) program, namely 

to complete all of its 8( a) annual reviews in accordance with F ederallaw and 

statutes. 2 There were no other goals that addressed the other elements of 8(a) 

servIcmg. 

To ensure that BDSs could focus on the annual reviews, in August 2009 the 

District Director restricted participant firms' access to the Colorado District Office 

to 2 days a week and by appointment only (see Appendix III). According to an 

August 12,2009 letter to Colorado district 8(a) participants, the restriction was in 

2 Public Law 100-656, §209, 102 Stat. 3853, 3863 (1988), codified at 15 U.S.C. §637 (a)(6)(B), requires SBA to 

complete annual reviews of all 8(a) program participants. This requirement, along with other provisions in the law, 

were intended to prevent ineligible firms from participating in the program. 
11 

place between August 17,2009 and October 5, 2009. While this occurred in 2009, 

during our site visit to the Colorado District Office in January 2010, we noted that 

access to the district office continued to be restricted. For example, during our 

visit one owner of an 8(a) firm was denied access to the district office. Although 

the BDS responsible for reviewing the firm's mentor protege agreement was in the 

office that day, she refused to see him. The participant told us that he visited the 

office because district officials had not been responsive to his repeated inquiries 

about his mentor protege application. We also heard the District Director suggest 

that egg timers be placed on each BDS' desk to limit counseling sessions with 8( a) 

firms to 5 minutes. 

Since our audit work was initiated, SBA has taken several steps to improve the 

servicing of 8(a) firms nationwide. For example, the Office ofField Operations 

revised district office goaling requirements for FY 2010 to include metrics that are 

intended to: (1) improve small business participation in Federal government 

contracting; (2) support entrepreneurship development through training, 

counseling and technical assistance; and (3) strengthen stewardship and 

accountability over taxpayer dollars through prudent financial portfolio 

management and oversight. Additionally, in January 2010, SBA created the 

Customer Relationship Management (CRM) system to help track and facilitate 

interactions between SBA and its clients. CRM assists SBA store all client 

communications by type, as well as, manage active client requests by rating their 

importance, and setting up deadlines and reminders. District staff can also query 

CRM and run management reports to determine the types of requested services, 

the frequency of requests, and their status. While use of the system is currently 

voluntary, SBA plans to require that the district offices record and monitor all 

customer requests, starting in November 2010. 

According to the Associate Administrator for Field Operations, CRM's tracking 

capabilities will generate data that will allow him to measure other aspects of 

district performance, thus establishing greater accountability in the district offices. 

He hopes to establish additional customer service performance goals for the 

district offices by FY 2011 that will be measured using data from CRM. The 

Associate Administrator also stated that the implementation of new servicing goals 

and CRM are only the beginning of his efforts to create accountability within the 

district offices. Currently, teams of Regional Administrators, District Directors, 

and BDSs are working together to develop measurable performance standards and 

uniform training curriculum for all district office employees. 

While we believe that these efforts will significantly increase accountability and 

oversight of the district offices, neither the performance standards nor CRM will 

provide a basis for measuring the quality of service provided. Determining the 

quality of service is important because servicing issues can significantly impact 
12 

the success of 8(a) companies. For this reason, we believe that the Associate 

Administrator of Field Operations should also administer a customer satisfaction 

survey that would solicit feedback from all 8(a) firms. The survey should be 

performed annually by an independent third party, such as the Office of Personnel 

Management, and the results should be tied to district directors' annual 

performance ratings. We also believe that the Colorado District Office should 

immediately be required to use CRM to manage communications with its 8(a) 

firms and that the Office of Field Operations should monitor CRM status reports 

for that office to ensure that requests for assistance are addressed timely. Finally, 

because staffing constraints impacted the level of service provided by the 

Colorado District Office, we believe that staffing levels of all the district offices 

should be reviewed to ensure that BDSs can devote the time they need to service 

their 8(a) participants. 

Business Development Specialists Were Inexperienced with the Sea) Program 

and Inadequately Trained 

According to the complaint, the BDSs made unintentional errors and did not 

properly apply the 8(a) rules and regulations when servicing firms because 

Colorado district management was "grossly negligent" in training its Business 

Development Division staff. While we did not find widespread errors in the 8(a) 

files reviewed for the 12 firms named in the complaint, as previously discussed, 

we determined that in February 2008, the Colorado District Office improperly 

accepted a $3,488,000 procurement on behalf of one of the firms. The BDS 

advised us that she did not receive adequate training in contract acceptance and 

therefore did not ensure the business met the applicable competitive business mix 

target for the completed program year. 

Additionally, 19 of the 39 participant firms who provided us feedback questioned 

the knowledge of their BDSs. Three firms also stated that their BDSs often 

misinterpreted concepts and definitions, and frequently contradicted information 

they previously provided, which caused delays and rework on the part of 

participant firms. Due to lost confidence in their BDSs, 9 firms told us they 

sought assistance including technical guidance and congressional and legal 

assistance. 

Problems noted with BDSs were largely attributable to most of the BDSs being 

new to the 8(a) area and not being adequately trained. During 2008 and 2009, six 

of the BDSs had less than 1 year of experience, one BDS had only 2 years, and the 

other had been in her position 13 years. The training records as of January I, 

2010, showed that formal training of 7 BDSs with 2 years or less of experience 

was a 2-day course that covered a wide range of 8(a) topics, including annual 

reviews, mentor protege and joint venture agreements, and business plans. The 
13 

remaining BDS had significant experience and had taken several classes. When 

asked about the level of training provided, most of the 6 BDSs with less than 2 

years of 8(a) experience stated that they were not given sufficient training to do 

their jobs effectively and that most of training was acquired on-the-job. 

Officials from the Office of Business Development told us that they have no 

control over the amount of training provided BDSs because BDSs report to the 

Office of Field Operations. Therefore, the district offices are responsible for 

training and monitoring the performance of their BDSs. However, upon request, 

the Office of Business Development can provide 8(a) training to new BDSs. 

Officials from the Office of Business Development told us that had it been 

informed of the situation in Colorado, it would have provided the support needed. 

As mentioned previously, teams of Regional Administrators, District Directors, 

and BDSs are currently working together to develop uniform training curriculum 

for all district office employees, which should ensure that BDSs are properly 

trained in the future. However, we believe that the Office of Field Operations 

should review the training provided BDSs in the Colorado District Office and take 

steps to address any training shortfalls. 

Some Participants Reported that District Officials Lacked Professionalism 

The majority of the 39 firms contacted believed that district office officials 

presented themselves in a professional manner. However, 9 firms told us that the 

district office lacked professionalism in its communications. Five of these firms 

told us that they had been scolded, or threatened when meeting with the Lead BDS 

from the Colorado District Office. In these instances participants reported that 

they were: 

• 	 Threatened with debarment when the owner of the firm said it would seek 

legal assistance because the Lead BDS was questioning whether the firm 

performed the majority of the work on its contract. 

• 	 Accused of being a front for a large business and bribing the contracting 

officer in order to get the contract as a mentor protege. 

• 	 Scolded for not working hard enough to market itself in response to the 

firm's request for assistance 

• 	 Treated rudely and with hostility by the Lead BDS and District Director. 

For example, one participant claimed it was treated in this manner when 

being persistent in seeking assistance on a joint venture application. 

Because the individual did not have an appointment, he was turned away 

from the district office. Another participant advised us it was treated with 
14 

hostility after contacting his congressman to intervene, and accused of 

using political means to circumvent 8(a) requirements. 

Additionally, one firm stated that another BDS contacted its client, a contracting 

officer with the Federal government, to inform her that the firm was no longer 

financially stable, and therefore, could not contract with the government. The firm 

became aware of this communication after the contracting officer contacted it to 

express concern. Ultimately, SBA, the firm, and the contracting agency were able 

to resolve the issue, but not before the firm's financial reputation was questioned. 

RECOMMENDATIONS 

We recommend that the District Director, Colorado District Office: 

1. 	 Immediately recommend for termination the firm identified in the report 

that continually refused to comply with the 8(a) financial reporting 

requirements in accordance with sections (2) and (7) of 13 CFR 124.303. 

2. 	 Minimize or eliminate restrictions on participants' access to the district 

office. 

3. 	 Ensure that all 8(a) firms are assigned to a Business Development 


Specialist. 


We recommend that the Associate Administrator for Field Operations: 

4. 	 Immediately require that the Colorado District Office use CRM to track 

requests from 8(a) firms and monitor CRM status reports for that office to 

ensure that requests are addressed timely. 

5. 	 Determine the adequacy of training provided to BDSs in the Colorado 

District Office and work with the Office of Business Development to 

address any training shortfalls. 

6. 	 Require the District Director to submit a plan outlining steps that will be 

taken to address the servicing issues addressed in this report, including 

recommending one firm for termination, and ensuring that all 8( a) firms 

have access to the district office during regular business hours. 

7. 	 Annually administer a nationwide customer satisfaction survey for all 8(a) 

firms, using an independent third party and tie the results to all district 

directors' annual performance rating. 
15 

8. Review staffing levels of all the district offices to ensure that BDSs can 

devote the time needed to adequately service their 8(a) participants. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

On August 18,2010, we provided a draft of the report to SBA's Office ofField 

Operations and Colorado District Office for comment. On September 23,2010, 

the Deputy Associate Administrator for Field Operations provided written 

comments on the behalf of the Office of Field Operations and the Colorado 

District Office, which are contained in their entirety in Appendix IV. 

While management concurred with some of our conclusions and non-concurred 

with others, it stated that it views the report as an improvement opportunity and 

intends to embrace the legitimate outcomes for purposes of continued 

improvement. However, management emphasized that the alleged violations 

addressed in the report occurred, in part, during the transition of new district office 

leadership and before increases were made to staffing levels. Since that time, 

significant improvements have been made in the staffing, management, and 

control of the district office. Further, the current district office staff has been 

trained, which along with strategic planning and increased communications, have 

enhanced their performance. 

Management also believes that concerns related to restricting participant access to 

the district office, which were caused by miscommunications and 

misunderstanding, have been resolved. However, management is willing to 

conduct an analysis to identify further improvements needed. 

Management specifically requested that the OIG reconsider its characterization of 

the district office's acceptance of over $6.5 million in procurements on behalf of a 

firm as "inappropriate." While management agrees that it may have been 

appropriate to recommend terminating the company from the 8( a) program, it was 

not done. Because the firm had not been suspended or terminated, management 

believes it was in good standing in the 8(a) program, and therefore, acceptance of 

the additional procurements was not necessarily inappropriate. We have revised 

the report language accordingly to address management's concern. 

Finally, management non-concurred with recommendation 1, concurred with 

recommendations 2 and 3, partially concurred with recommendation 6, and neither 

concurred nor non-concurred with recommendations 4,5, 7, and 8. Because some 

actions relating to the latter recommendations were either underway or 
16 

implemented, we consider management's comments to be fully responsive to all, 

but three, of the recommendations. A summary of management's comments and 

our response follows. 

Recommendation 1 

Management Comments 

Management did not agree with the recommendation because the firm in question 

has submitted the required documentation and audited financials for 2007 and 

2008 and is up to date on its reporting requirements. As a result, the potential 

grounds for termination addressed in the report no longer exist. However, the 

district office will continue to monitor the firms in the 8(a) portfolio for 

compliance and take appropriate action (recommendation for termination and 

suspension) as required. 

GIG Response 

While the Colorado District Office did not agree with the recommendation, we 

find their response and alternative solution to continue to monitor the firm's 

compliance with 8(a) program requirements responsive to our recommendation. 

As a result, we believe final action has been taken on this recommendation and 

consider it to be closed. 

Recommendation 2 

Management Comments 

Management agreed with the recommendation and stated that there were currently 

no restrictions on participants' access to the district office. 

GIG Response 

We believe that management's comments were responsive to the recommendation, 

and consider the recommendation to be closed. 

Recommendation 3 

Management Comments 

Management agreed with the recommendation and stated that all current 

participants in the 8(a) BD program have been assigned to a BDS. 
17 

GIG Response 

We believe that management's comments were responsive to the recommendation, 

and consider the recommendation to be closed. 

Recommendation 4 

Management Comments 

Management stated that the CRM system is not fully operational, but that it 

intends to use CRM as a resource tool once the system is in place. In the 

meantime, the Office of Field Operations will ensure that current procedures for 

customer service are followed by the BDSs in all SBA district offices. 

GIG Response 

We agree that the district office cannot immediately track servicing requests in 

CRM if it is not yet fully operational, and consider management's plans to ensure 

that current procedures for customer service are followed to be responsive to the 

recommendation. 

Recommendation 5 

Management Comments 

Management stated that continuous training sessions for BDSs have been 

conducted by subject matter experts within the Office of Business Development. 

Moreover, in July 2010, the Office ofField Operations hosted a lead BDS training 

session in which teams of subject matter experts were brought together to develop 

and implement training modules for new hires and for continued learning 

education. The Office of Field Operations is committed to rolling out the training 

program in FY 2011. 

GIG Response 

We do not consider management's comments to be fully responsive to the 

recommendation. While we applaud the actions taken by the Office of Field 

Operations in expanding the current BDS training program, we believe an 

assessment of the training provided to each BDS within the Colorado District 

Office will allow management to adjust its supervision of BDS activities where 

training has been lacking until the new training curriculum is available. 
18 

Recommendation 6 

Management Comments 

Management referred to its response to recommendations 1 and 2, where it 

disagreed that one firm should be recommended for termination as it was currently 

in compliance, and agreed that participant access to the district office should not 

be restricted. 

GIG Response 

We believe that management's comments are responsive to our recommendation 

that the District Director submit a plan for addressing the termination and access 

issues. As management previously responded, the formerly non-compliant firm is 

now in compliance, and therefore, should not be terminated. Further, the access 

restrictions are no longer in place. Also, significant improvements have occurred 

in the staffing and management of the Colorado District Office since our review 

was completed. Therefore, we believe recommendation 6 should be closed. 

Recommendation 7 

Management Comments 

Management stated that customer satisfaction surveys are considered by OMB to 

be data collections and are, therefore, subject to the Paperwork Reduction Act. As 

a result, the Office of Field Operations defers to the Office of the Administrator in 

determining whether or not the Agency will develop a customer satisfaction 

survey, whether it is administered through a third party, and how the district 

directors are rated and what performance criteria is evaluated. 

GIG Response 

We do not consider management's comments to be fully responsive to the 

recommendation. While permission should be obtained from the appropriate 

parties prior to conducting a survey, we believe that the Office of Field Operations 

should take the lead in developing and implementing the survey instead of 

deferring responsibility to the Office of the Administrator. 
19 

Recommendation 8 

Management Comments 

Management stated that reviewing staffing levels of all the district offices to 

ensure that BDSs can devote the time needed to adequately service their 8(a) 

participants is ongoing. 

GIG Response 

We consider management's ongoing review of district office staffing levels to be 

responsive the recommendation. 

ACTIONS REQUIRED 

Please provide your management decision for each recommendation on the 

attached SBA Forms 1824, Recommendation Action Sheet, within 30 days from 

the date of this report. Your decision should identify the specific action( s) taken 

or planned for each recommendation and the target date( s) for completion. 

We appreciate the courtesies and cooperation of the SBA during this audit. If you 

have any questions concerning this report, please call me at (202) 205_[FOIAeX2br 

Riccardo R. Buglisi, Director, Business Development Programs Group at (202) 

205- [FOIAex.2] 

cc: Acting Director, Office of Business Development 
20 
 

APPENDIX I. SUMMARY OF ALLEGATIONS AND OIG FINDINGS 
 

Company Allegation Graduating Servicing Training Professionalism 

Company A Firm should have been graduated 

due to excessive withdrawals by 

firm's officers. 

U 

Company B Firm did not meet 8(a) ownership 

requirements. U 

Company C The district office accepted 

contracts, while the firm was noncompliant with 8(a) regulations. 

S 

Company D Mentor protege agreement was 

not processed timely due to lack 

of staff knowledge. 

S 

Company E The district director stated that he 

would not approve a mentor 

protege agreement because the 

protege's owner did not support 

him in his political campaign . 

U 

Company F Reported as ineligible for 8(a) 

sole source acceptances yet the 

district office continued to accept 

procurements on its behalf. 

U 

Company G Change of ownership request 

was mishandled. UDII 

Company H District office's refusal to approve 

financial statement waiver was 

unjustified. 

U 

Lead BDS spoke to firm in a rude 

and demeaning manner. 

UDII 

Company I District office inappropriately 

denied contracts on the behalf of 

the company. 

U 

Company J Reported as ineligible for 8(a) 

sole source acceptances yet the 

district office continued to accept 

procurements on its behalf. 

S 

Company K 

and 

Company L 

Mentor protege agreements were 

not approved by headquarters 

because Lead BDS failed to 

communicate new requirements 

to staff. 

U 

S = Substantiated 

U = Unsubstantiated 

UDII= Unable to Determine due to Insufficient Information 
21 

APPENDIX II. SUMMARY OF 39 PARTICIPANT RESPONSES ABOUT 

SERVICING PROVIDED BY THE COLORADO DISTRICT 

OFFICE 

Requests 

Performed 

Timely 

Business 

Development 

Specialist 

Receptive 

District 

Officials 

Acted 

Professionally 

BDS 

Knowledgeable 

about the 8(a) 

Program 

Believed the 

District 

Office is 

Providing 

Assistance 

Recommend 

8(a) Program 

to Your 

Community 

No 9 13 9 19 26 12 

Yes 17 17 22 8 5 18 

Yes and No 5 7 5 3 6 5 

Chose to not respond 8 2 3 9 2 4 

Table 1. Firms responses by question (numeral value). 

Requests 

Performed 

Timely 

Business 

Development 

Specialist 

Receptive 

District Officials 

Acted 

Professionally 

BDS 

Knowledge 

able about 

the 8(a) 

Program 

Believed the 

District 

Office is 

Providing 

Assistance 

Recommend 

8(a) Program 

to Your 

Community 

No 23% 33% 23% 49% 67% 31% 

Yes 44% 44% 56% 21% 13% 46% 

Yes and No 13% 18% 13% 8% 15% 13% 

Chose to not respond 21% 5% 8% 23% 5% 10% 

Table 2. Firms responses by question (percentages). 
22 

APPENDIX III. LETTER ISSUED TO PARTICIPANTS RESTRICTING 

ACCESS TO THE COLORADO DISTRICT OFFICE 

n .s. SM L BI1S1NB.SSAOldINISTRA11I0N 

Ct>kmrtJ~ Dim'lei QfTJti! 

721 1911!lSUmt, Sl2ilt 4:16, 

0.:11= co .8lll2:'!)2.2;:i J7 

(Jm)~..1'tJijil · .f'M '(:IOO~ N~>649(I" 1l;lIJ (l!OOj8'71.u:J!J 

9\1 ':mess Development S~ IlU~s New HIIUJ1I (If A'Yililabilit)' 

EIftcl!ye August ]1, 2fH-" Un" October g, %002 

As ),,011 Ill] tn\'Jw 'llie CJld of me Federal F-liscal Ye3r, .sr:p~l!ilbt! r 30. is (;asl approaeli:ina. N(iW i:s the time 

wbe:n the ~ume of conl!rudiaJgo££r,u:!l, MIlI!3I leView C1)IUpHiliIIllt lIIId mdLof-year repon requests Ii!!'C M!heir 

ism-~t looel Most of you :are aware IRatOl,ir office is wrrenlly' ~dei'$ialkd and is m Iheprocess of 

rec;tUilillg 5Qm.c; additrollld DDS petsoonell. In addition, CMl.)!l'.!'D Terrell, l .eadl DUmte!il> D:vel(lpmfmt 

Specialist willi Ix: out 011 ex!ended m.edicallea\'e from iipJ)r"(l~malcly .August B -October.'l, '2009. 

DDS Air@' Available '011 
 

Tuesdays & Thursdays ON ... ¥!!!! 
 

8:30 am - 3:30 pm 

Allh(lugh oor BDS sWT j~ IftQrG Ihm ham to :lIssi5t yoo andaM"'o'.(l[ any questions. yoo may bave, IIiIe. clJlllent 

wwtlood III be ompl~trd b~' Ih~ t,('qd 9f dlo!l ti~ ill QW !~ priml,y ;g.t Ihi~ ume. II you h1l.ve an 

I!!~g.e~o:r iirnmlediafe attention, 1I1~ re:wl'I OlIt to }lou ru:signed !QS at any lime. and . • willi 

llSS1sl y.Qo\,i 1I1J a IIm«y ~~L 

I tini(lW dW ~1DI:i Qr yw hll.vc; !J.o¥n ablco 10 vj5it wUh your iSlligned DDS a.1Id gel a'n5\;\'en to YQUr queslions 

b)' simply stopplillg fialti\OOl'lCCd ill die (1ffKle wilil\oIit B sdwcdillcd appointmcllfl_ Due 10 lheaddled wodload 

placed on I1he em.ire 9Itaff of lDe CWOOIOO Distril!1O{fitCe duri~ lhis IittJe of year. we wiD not be alll~ (0 meet 

wilh you a scbed!!l~ appo.itnunem. 

AI(lt1t wilb Ib¢ t!Jl1Ire s!Jdfor the Colmdo DiliArid .office, 1~I ro thank ytIp in 1\dV'IUII;t'; :fur )'Q!II" patio::nce 

ad Il'O.dcnilandling: of Ihesc ~PCIVY dliaDY:S anci fot- respecling Ihe ~dii il;m:d aetivily dtat !he 'Col.o.rado 

District Office nwst complete by September .30\2flJOO. 

It is QflIy willi lib a5~laIlce ofol;ll' 2.1):2. CoJwado 800 pu.nfo(jo complmieg, dlat w~ wiU be abte 10 complew 

'\he y'eat-endl i'Cqu~i\.ts. iii il timelyma'lifi¢r. 

G~g:~ 

/~Oi moot Diirector 
APPENDIX IV. MANAGEMENT COMMENTS

23 

U.S. U.S. SMA!..!. SMA!..!. aUSINESS aUSINESS AOMINISTRA'rION AOMINISTRA'rION 

WASHINGTON, WASHINGTON, O~C. O~C. 204t6 204t6 

MEMORANDUM MEMORANDUM 

DATE: DATE: September September 23,2010 23,2010 

TO: TO: Debra Debra S. S. Ritt Ritt 

Assistant Assistant Inspector Inspector General General for for Auditing Auditing 

.office .office of of Inspector Inspector General General 

FROM: FROM: Jess Jess Knox Knox 

THROUGH: THROUGH: Eugene Eugene Cornelius Cornelius [FOIAIA ex. ex. 6] 6] 

SUBJECT: SUBJECT: Response Response toto Draft Draft AutMt AutMt Report Report onon "The "The Colorado Colorado District District Office's Office's 

Servicing Servicing of of 8ea) 8ea) BUSiness BUSiness Development Development Program Program Participants" Participants" 

Project Project No. No. 10003 10003 

The The Office Office ofField ofField Operations Operations (OFO) (OFO) and and the the Colorado Colorado District District Office Office (DO) (DO) welcome welcome the the 

opportunity opportunity toto comment comment onon the the findings findings reported reported inin the the Draft Draft Audit Audit Report Report onon "The "The Colorado Colorado 

District District Office's Office's Servicing Servicing of of 8(a) 8(a) Business Business Development Development Program Program Participants" Participants" (project (project No. No. 

10003). 10003). 

OFO OFO reviewed reviewed the the findings findings and and ~ecommendation ~ecommendation ofProject Project No. No. 10003 10003 and and concurs concurs onon some some of of 

the the conclusions conclusions and and non-concurs non-concurs onon others. others. First, First, it. it. isis important important toto emphasize emphasize that that the the period period of of 

time time covered covered byby this this report report isis bifurcated bifurcated byby aa change change inin leadership leadership inin the the DO. DO. The The draft draft report report 

contains contains the the results results of of anan OIG OIG review review ofthe the DODO based based onon aa complaint complaint received received inin July July of2009 of2009 

alleging alleging violations violations byby the the office office inin the the administration administration ofthe the 8(a) 8(a) Business Business Development Development (BD) (BD) 

program program made made between between March March 2007 2007 and and June June 2009. 2009. The The leadership leadership inin the the DODO transitioned transitioned inin 

2008, 2008, when when the the agency agency hired hired District District Director. Director. Second, Second, the the Colorado Colorado District District Office Office (DO) (DO) 

services services aa portfolio portfolio ofover over two two hundred hundred 8(a) 8(a) companies companies and, and, while while there there were were some some concern concern 

with with staffing staffing and and resource resource levels levels inin March March 2007, 2007, since since that that time time the the leadership leadership and and staffing staffing levels levels 

have have experience experience considerable considerable and and positive positive change. change. 

Currently, Currently, the the DODO has has added added new new staff. staff. The The current current staff staff has has received received training training and and has has been been 

provided provided with with numerous numerous learning learning opportunities. opportunities. The The change change inin leadership leadership has has made made aa big big 

difference difference inin the the management management and and control control ofthe the DO, DO, and and the the BDS's BDS's skills skills have have been been enhanced enhanced 

through through training training opportunities, opportunities, strategic strategic planning, planning, and and increased increased communications. communications. Additionally, Additionally, 

the the DODO has has engaged engaged inin process process improvements improvements and and more more improvements improvements are are planned. planned. 

Most Most notable notable isis that that the the Office Office ofInspector ofInspector General General concluded concluded many many of of the the original original complaints complaints 

bebe unsubstantiated. unsubstantiated. 
APPENDIX IV. MANAGEMENT COMMENTS

24 

OFO OFO believes believes the the concerns concerns related related to to access access restrictions restrictions have have been been resolved, resolved, and and inin large large part part had had 

been been caused caused by by miscommunication miscommunication and and misunderstandings. misunderstandings. And And while while the the tracking tracking of actions actions 

and and communications communications via via CRM CRM is is worthy worthy and and oUght oUght toto bebe pursued, pursued, OFO OFO will will conduct conduct anan analysis analysis 

to to determine determine whether whether or or not not the the process process will will have have tbe tbe most most benefi.cial benefi.cial result result and and not not raise raise other other 

issues issues or or problems. problems.

The The Colorado Colorado District District office office views views the the report report as as an an improvement improvement opportunity opportunity and and itit intends intends toto 

embrace embrace the the legitimate legitimate outcomes outcomes of ofthis this report report for for purposes purposes ofcontinued continued improvement. improvement. 

Please Please note note that that SBA SBA recommends recommends a a clarification clarification of of the the last last paragrapb paragrapb onon page page 66 which which continues continues 

on on to to page page 7, 7, or orstrilcing strilcing out out of ofthe the fll'st fll'st full full sentence sentence onon page page 7, 7, which which states, states, "In "In total, total, over over $6.5 $6.5 

million million in in procurements procurements were were accepted accepted inappropriately inappropriately onon the the firm's firm's behalf." behalf." ,(emphasis emphasis not not inin 

original). original). Ifthe the firm firm had had been been suspended suspended in in cOrUunction cOrUunction with with aa termination termination action action or or ifitit had had 

been been offered offered sole sole source source opportunities, opportunities, but but the the finn finn had had failed failed toto submit submit the the financial financial statements, statements, 

then then SBA SBA had had the the authority authority to to deny deny the the award award based based onon the the suspension, suspension, pursuant pursuant toto 1313 CFR CFR 

§ § 124.305; 124.305; or or ineligibility ineligibility based based on on failure failure to to submit submit financial financial statements statements pursuant pursuant toto I3I3 CFR CFR 

§ § 123.503(c)(I). 123.503(c)(I). It It is is not not clear clearfrom from the the facts facts whether whether the the contracts contracts were were competitive competitive or or sole sole 

source source and and whether whether or or not not the the firm firm was was suspended. suspended. Based Based onon the the facts facts present present inin the the report report 

regarding regarding termination, termination, it it appears appears that that the the firm firm was was not not recommended recommended for for termination; termination; so, so, 

arguably, arguably, it it was was not not suspended. suspended. If Ifthe the awards awards were were the the result result of competition competition and and the the firmfirm was was not not 

suspended suspended then then SBA SBA acted acted appropriately appropriately with with regard regard toto the the contract contract awards. awards. SEA SEA conceded conceded that that 

there there may may have have been been a alost lost opportunity opportunity to to recommend recommend the the frrmfrrm for for telmination, telmination, but but describing describing 

SBA's SBA's actions actions as as inappropriate inappropriate is is not not consistent consistent with with the the rules rules onon ContTact ContTact eligibility eligibility and and thus thus 

should should not not be be described described as as such. such.

OIG OIG RECOMMENDATraNS TraNS

We We recommend recommend that that the the District District Director, Director, Colorado Colorado District District Office: Office: 

1. 	 1. Immediately Immediately recommend recommend for for termination tel1llination the the finn firm identified identified inin the the report report that that has has 


continued continued to to refuse refuse to to comply comply with with the the Sea) Sea) financial financial reporting reporting requirements requirements inin 


accordance accordance with with sections sections (2) (2) and and (7) (7) of of 13 13 CFR CFR 124.303. 124.303. 


2. 	 2. Minimize Minimize or or eliminate eliminate restrictions restrictions on on participants' participants' access access toto the the district district office. office. 

3. 	 3. Ensure Ensure that that all all 8(a) 8(a) firms firms are are assigned assigned to to a a Business Business Development Development Specialist. Specialist. 

We We recommend recommend that that the the Associate Associate Administrator Administrator for for Field Field Operations: Operations: 

4. 	 4. Inunediately Inunediately require require the the Colorado Colorado District District office office use use CRM CRM toto traclc traclc requests requests from from 8(a) 8(a) 

firms firms and and monitor monitor CRM CRM status status repowers repowers for for the the office office toto ensure ensure that that requests requests are are 

addressed addressed timely. timely.

5. 	 5. Determine Determine the the adequacy adequacy of oftraining training provided provided toto BDSs BDSs inin the the Colorado Colorado District District Office Office and and 

work work with with the the Office Office of ofBusiness Business Development Development toto address address any any training training shortfalls. shortfalls. 

2 2
APPENDIX IV. MANAGEMENT COMMENTS

25 

6. 6. 	 Require Require the the District District Director Director toto submit submit aa plan plan oUtlining oUtlining steps steps that that will will bebe taleen taleen toto address address 

the the servicing servicing issues issues addressed addressed inin the the report report including including the the temlination temlination ofthe the fmn, fmn, and and 

ensuring ensuring that that all all Sea) Sea) fimlS fimlS have have access access toto the the district district office office during during regular regular business business 

hours. hours. 

7. 7. 	 Annually Annually administer administer nationwide nationwide customer customer satisfaction satisfaction survey survey for for all all 8(a) 8(a) finns, finns, using using anan 

independent independent third third party party and and tietie the the results results toto district district directors' directors' annual annual performance performance rating. rating. 

8. 8. 	 Review Review staffing staffing levels levels ofall all the the district district offices offices toto ensure ensure that that BDSs BDSs can can devote devote the the time time 

needed needed toto adequately adequately service service their their Sea) Sea) participants. participants. 

SBA SBA RESPONSE RESPONSE 

I.I. 	 Non-concur. Non-concur. The The firmfirm inin question question submitted submitted the the required required docmnentation docmnentation and and audited audited 

financials financials for for 2007 2007 && 2008 2008 and and isis upup toto date date onon the the reporting reporting requirements. requirements. The The potential potential 

grounds grounds for for termination termination addressed addressed inin the the report report nono longer longer exist. exist. The The DODO will will continue continue toto 

monitor monitor the the fmns fmns inin the the 8(a) 8(a) portfolio portfolio for for compliance compliance and and take take appropriate appropriate action action 

(recommendation (recommendation for for termination termination and and suspension) suspension) asas required. required. 

2. 2. 	 Concur Concur and and addressed. addressed. There There are are nono restrictions restrictions onon participants' participants' access access toto the the district district 

office. office. 

3. 3. 	 Concur Concur and and addressed. addressed. All All participants participants inin the the 8(a) 8(a) BDBD program program are are assigned assigned aa Business Business 

Development Development Specialist. Specialist. 

4. 4. 	 OngOing. OngOing. The The CRM CRM system system isis not not [ully [ully operational, operational, but but the the OFO OFO intends intends toto use use CRM CRM asas IIII 

resource resource tool tool once once the the system system isis inin place. place. InIn the the meantime, meantime, OFO OFO will will ensure ensure that that the the 

current current procedUres procedUres for for customer customer service service are are followed followed byby theBDSs theBDSs inin all all SEA SEA DOs. DOs. 

5. 5. 	 Ongoing. Ongoing. OFO OFO has has conducted conducted continuous continuous training training sessions sessions for for the the BDSs BDSs through through inin 

person person assistance assistance and and through through quarterly quarterly Ready Ready Talk Talk sessions sessions administered administered byby subject subject 

matter matter experts experts through through the the Office Office of of Business Business Development. Development. InIn July July 2010, 2010, the the OFO OFO 

hosted hosted aa lead lead BDS BDS training training inin which which teams teams of of subject subject matter matter experts experts were were brought brought 

together together toto develop develop and and implement implement training training modules modules for for the the use use ofnew new hires hires and and 

continued continued learning learning education. education. The The OFO OFO isis committed committed toto rolling rolling out out the the training training program program 

inin fiscal fiscal year year 2011. 2011. 

6. 6. 	 Please Please see see reSponse reSponse toto items items II and and 2. 2. 

7. 7. 	 Customer Customer satisfaction satisfaction surveys surveys are are considered considered byby OMB OMB toto bebe data data collections collections and and are are 

therefore therefore subject subject toto the the Paperwork Paperwork Reduction Reduction Act. Act. OFO OFO defers defers toto the the Office Office ofthe the 

Administrator Administrator inin determining determining whether whether or or not not the the Agency Agency will will develop develop aa customer customer 

satisfaction satisfaction survey, survey, whether whether itit isis administered administered through through aa third third party, party, and and how how the the district district 

directors directors are are rated rated and and what what performance performance criteria criteria isis evaluated. evaluated. 

8..Ongoing. Ongoing. 

33