S. 3173: Stop 8(a) Contracting Fraud Act

The bill titled the "Stop 8(a) Contracting Fraud Act" aims to implement changes in how the Small Business Administration (SBA) conducts its business development program, particularly relating to sole source contracts.

Moratorium on Sole Source Contracts

This legislation introduces a moratorium, or pause, on awarding sole source contracts under the SBA’s section 8(a) program. This pause will last from the date the bill is enacted until the SBA conducts a full audit of its business development program as previously ordered by the Administrator on June 27, 2025. The moratorium will only end once the SBA has completed the audit and submitted a report detailing the findings to relevant congressional committees.

Definitions

In the context of this bill:

• Administration: Refers to the Small Business Administration.
• Administrator: The head of the Small Business Administration.
• Deputy Administrator: The second-in-command at the SBA.

Waiver for National Security

While there is a moratorium in place, the bill does allow for certain exceptions. If a contracting officer determines that a sole source contract is necessary for national security reasons, they may apply for a waiver from this moratorium. The process for requesting a waiver involves:

• Submitting a request to the head acquisition officer of their agency.
• The head acquisition officer will then forward the request to the Administrator or the Deputy Administrator for approval.

When submitting a waiver request, the contracting officer must provide a written justification that explains:

• The necessity of using the waiver for national security purposes.
• Why the work cannot be undertaken by any other small business.

It is important to note that the authority to approve these waivers cannot be delegated to anyone else.

Impact on Sole Source Contracting

Overall, this bill intends to strengthen oversight and accountability in the SBA's contracting process by prohibiting certain contracts until a thorough evaluation is conducted and reported. The goal is to reduce opportunities for fraud within the program and to ensure that contracts awarded under this framework truly benefit small businesses.

Relevant Companies

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