Links discussed
EO on Promoting Efficiency, Accountability, and Performance in Federal Contracting
White House Budget Request FY27
Appropriations Committee Draft Report on FY27 Government Appropriation Bill
SBA Office of Advocacy Leadership
GAO decision in KriaaNet, Inc., B-422717.4, B-422717.5, April 23, 2026
GAO decision in Threat Tec, LLC, B-424221, April 23, 2026
Public Law 119-82, Small Business Innovation and Economic Security Act
OHA decision in Size Appeal of Nisou Enterprises, Inc., SBA No. SIZ-6380 (2026)
Jason Miller: “Is SBA Moving the small business contracting goal posts?” (Federal News Network)
Draft SBA FY26 Scorecard factors (Federal News Network)
FAR Council Memorandum on Agency Implementation of Executive Order 14398, Addressing DEI Discrimination of Federal Contractors (April 17, 2026)
David Fahrenthold, Luke Broadwater, and Andrea Fuller: “Firm Building Trump’s Ballroom Got a Secret No-Bid Contract for a Nearby Job” (New York Times gift link)
Correction: When I was referring to 8(a) firms being terminated, that was in April, not August.
Timestamps
00:00 – 8(a) Program Data: Shrinking Participation and Audit Impacts
02:54 – SBA Budget Proposals: White House Cuts vs. House Appropriations
06:23 – WOSB Program: Addressing Backlogs and Recertification Surges
07:46 – Congressional Spotlight: The Decline in New Entrants and 8(a) Removals
11:09 – Regulatory Update: Delay of Dodd-Frank Section 1071 Reporting
12:34 – GAO Case Law: Reprocurement and Certificate of Competency (Creanet Case)
18:36 – SBIR Protests: Timeliness and Successor in Interest (ThreatTech Case)
24:41 – SBIR Reauthorization: Program Extension to 2031 and New Security Rules
25:44 – SBIR Program Extension and Security Denials
26:16 – OHA Suspension Appeals and the 8(a) Data Call
28:52 – OHA Case Law: Nisu and Identity of Interest Affiliation
31:12 – The SBA Scorecard and Category Goals
34:50 – Regulatory Developments: FAR Council and DEI Executive Order
36:20 – Q&A: AI in Source Selection and Bid Protests
39:13 – Q&A: 8(a) Sole Source Trends for Native-Owned Firms
43:03 – Q&A: White House Procurements and Sole Source Contracts
45:06 – Q&A: 8(a) Certifications and OHA Remand Timelines
Transcript
8(a) Program Data & Trends
So let’s start with the 8(a) data. I found just yesterday that the number of 8(a) participants actively in the program is now below 3,400. Let me see, for people who are on the live stream, you can see it there in the screen share. We started the year at over 4,300 8(a) participants. To give this kind of historical context, the number of 8(a) participants used to be around 5,000. So it’s dipped significantly now to less than 3,500.
The reason for this, of course, is SBA’s continued audit of the 8(a) program. Most of the firms that have left the program have done so because they either withdrew or they were terminated for not replying to the data call. At first, these firms were suspended for not replying to the data call, and then they were terminated. That happened around the middle of August [Correction: April].
Then there were a number of firms that just decided, “Look, it’s really not worth it for me to stay in the 8(a) program,” particularly with what the agency is doing in terms of sole sources and cutting back on the “once 8(a), always 8(a)” rule. You can see here that you had almost 500 firms that were eliminated from the program between August 8 and August 13 [Correction: April]. That’s because of firms leaving or firms that were terminated for not replying to the data call.
There are still 114 firms that got unsuspended today. It seems to be a Friday thing to try to go and unsuspend firms. That number may have dipped since I created this graph, but right now we’re at fewer than 3,400. You can probably expect for that number to continue to go down. There haven’t been new applications that have been granted—at least in what I’ve seen—since August of 2025. Additionally, you have these firms that are graduating naturally after their nine- or 10-year period, but also firms finding that the 8(a) program isn’t giving them the return that they expected. I’ll be going through some of that data as well in response to one of your questions that came up when I brought up this data before.
SBA Budget Request & House Appropriations
Let me go now to SBA’s budget request. This is really interesting. When it first came out, the White House issued a proposed budget from the Office of Management and Budget. But it’s really the House that sets the budget. The White House proposal is just a signal to people of what the White House priorities are. The White House budget this year cut SBA by 67%. It says the budget requests $330 million for the SBA, a $670 million or 67% decrease from the 2026 enacted level.
The White House would have cut the entrepreneurial development programs and completely cut the SCORE program. It would have cut salaries and expenses by a third. It would have cut the business loan programs by $160 million. People watching that kind of figure said, “Look, you’re not going to cut SBA by two-thirds. It’s a really bad signal to say we’re not supporting small businesses through SBA support anymore”.
Lo and behold, the House Appropriations Committee issued a draft budget for consideration, and it does not cut the SBA by 67%. It keeps most of the programs at the same level as they have been before. The SBA salaries and expenses go down by about $25 million. That’s far less than what the White House had proposed—it’s less than a 10% cut for salaries and expenses. It also keeps the entrepreneurial development programs at a bit less than what they had before, maybe a bit more than a 10% cut. But still, they keep SCORE around in some of those programs, and keep the Office of Inspector General at the same level. The Office of Advocacy, interestingly, gets a boost. The Office of Advocacy gets an additional $4 million in this budget from the House Appropriations Committee.
The budget states that the Office of Advocacy was established by Congress in 1976 to serve as the independent voice for small business within the federal government. Interesting timing for that statement, because the prior chief counsel for SBA recently switched jobs. The chief counsel was Casey Mulligan. He’s a renowned economist from the University of Chicago, and he was a Senate-confirmed chief counsel. There hadn’t been a Senate-confirmed chief counsel at SBA since President Trump was first elected. So there’s not a permanent chief counsel in that position, making it kind of questionable whether the advocacy is acting as an independent voice established by Congress when there’s not a Senate-confirmed head of that office.
WOSB Program Backlog
There are some good statements in the House Appropriations budget report for SBA. One of them is about the WOSB program. The committee states in its report that it’s concerned about the WOSB program having a month-long backlog of applications. The increased number of certified firms in the program, as well as the recent surge of participants undergoing an in-depth recertification process as they enter their third year, has added an additional strain on the program’s resources. The committee directs SBA to ensure that eligible applicants obtain the required initial certification and continued certification to meet SBA’s goal of supporting WOSBs.
That’s a significant development, with the House Appropriations Committee putting a spotlight on a backlog in the WOSB program. We’ve seen recently that SBA is pushing through applications on the WOSB program. One day they had approved over 250 applications, and I’ve seen it myself as well—WOSB applications getting approved. So they may be heeding this guidance from the Appropriations Committee to get through this backlog of applications.
8(a) Program New Entrants & Terminations
The Appropriations Committee is also interested in the 8(a) program. Number one, they’ve taken on this mantle of looking at new entrants. This has been a sticking point for SBA and policymakers for quite some time, and the Appropriations Committee notes that the number of new small business entrants entering new contracts declined 80% during the period between 2005 to 2019. You see this issue come up again and again. SBA highlighted it in its scorecard changes—we’ll be talking about that in a bit—and is looking to add that as a factor to the scorecard.
Here it is: the House Appropriations Committee is also paying attention to the decline in new entrants. The committee links that with actions we’ve already talked about in the 8(a) program, stating that recent actions undertaken by the SBA are exacerbating the decline in new entrants, particularly in the 8(a) contracting program. 8(a) is a way for companies to get into government contracting for the first time. They’re able to get sole source contracts, so they don’t necessarily have to compete and face that deficit in past performance because they’re new. They have limited competition against other 8(a) firms when they do have to get into a competitive atmosphere.
But the committee is directing SBA to look closely at the 8(a) program and report to the committee on appropriations on the statutory and legal justifications for terminating 622 small businesses on March 4th. They must also include the statutory and legal justification for initiating SBA’s June 2025 audit of the program. The report should include the results of the June 2025 audit and evidence of fraud and/or improper payments in the 8(a) program supporting the removal of these small businesses from the program.
That’s language I hadn’t heard before—that there could be improper payments in the 8(a) program. I suppose SBA is really looking at eligibility. Are companies meeting the disadvantage requirements of the program? Maybe they’re thinking that if the company is not eligible, it could potentially be an improper payment to have paid a company that’s not qualified for the program. I think that’d be a bit of a stretch when looking at firms that might be a few thousand dollars over the economic disadvantage threshold. That’s a lot of the firms that have been suspended or considered for termination. As for those 628 small businesses that were removed, that was that big jump in the red line that I showed on the graph. That’s primarily firms that didn’t reply to the data call.
Remember, I had this conversation with Matt Schoonover a while back. It was very expensive for firms to reply to the data call—thousands of dollars, tens of thousands of dollars—and firms may not have seen the return on investment in replying. But now Congress, through the House Appropriations Committee, is first of all not cutting SBA by 67% as the White House had proposed, but also putting a spotlight on the WOSB program and the 8(a) suspensions and terminations.
Section 1071 Loan Reporting Delay
One other note in this is there’s a provision here, Section 520, that is drafted to prohibit small businesses from having to comply with Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. That’s loan reporting. Section 1071 was passed in 2010. So it’s 15 years old and has just been running around regulatory procedures for a while and hasn’t gone into effect. We have a further delay in the enactment of Section 1071 from this committee report here.
Case Law Update: KriaaNet & Reprocurement
Let’s get into some case law. I’m going to have a podcast next week with Scott Flesch, who is one of the best protest lawyers out there right now. We’re going to go over a lot of court cases and protest decisions coming out, and we’ll also talk about the executive order on fixed-price contracting that just came out. I’m going to save some of those until next week when I talk with Scott. But I couldn’t stop from highlighting this decision that came out from GAO just this week called KriaaNet.
This is about a reprocurement case. This is an 8(a) contract that was reprocured by the agency. It’s interesting because honestly, I’ve been around federal procurement now for almost 20 years and I have not seen a reprocurement in the flesh. I think I’ve talked about it and thought about it, but these do not come up very often. So it’s interesting to see this area of law arise.
KriaaNet is protesting a task order awarded to LBO Technology. There was an RFQ under the GSA Schedule set aside for 8(a) firms. KriaaNet and LBO were two of the firms that submitted quotes on that. KriaaNet actually won the initial competition in February of 2025. There were some protests, and KriaaNet had some personnel changes during the course of that time that they were waiting to perform on the contract. The agency had concerns regarding KriaaNet’s failure to provide proposed key personnel in a timely manner, issued a cure notice, and ultimately terminated KriaaNet’s task order for default. The agency did eventually convert that termination to a no-cost termination for convenience.
The SBA issue comes up after the agency goes to issue a task order to LBO. Back off the original competition in 2024, the agency goes back and asks LBO for a revised quotation, and then issues the task order to LBO after terminating KriaaNet’s task order for a lack of those key employees. The area of law that comes up is the process under reprocurements. The FAR Section 49.402-6 covers reprocurements. It says an agency has considerable discretion to repurchase goods and services for a substitute contract where the agency needs to repurchase goods or services in a quantity not exceeding the undelivered quantity. It may use any acquisition method, provided that it preserves competition to the maximum extent practicable. GAO has said it will not review an agency decision to exclude a defaulted contractor from a reprocurement for the remaining work under the defaulted contract.
KriaaNet brings up a number of arguments. The one I paid most attention to was an argument about the SBA Certificate of Competency (COC) procedures. The COC is rarely seen but often discussed. It comes up in GAO cases and Court of Federal Claims cases from time to time, and it’s kind of a historic process. There used to not be as many set-asides, and a lot more contracts used to be lowest price or sealed bidding. A small business would bid against larger businesses and might have the lowest bid. But the agency would deny the small business the contract because the small business didn’t have the capacity to do the work. It was too small, basically, or didn’t have the past performance to do the work. So Congress and SBA created the COC process, where that small business that is excluded from a contract—even though it has the top-rated proposal or the lowest price—can appeal to SBA for a COC. If SBA grants that certificate, the agency would need to award the contract to the small business under the COC.
That’s the way historically it was designed. It doesn’t quite work that way anymore because of two-step procurements and go/no-go decisions on past performance, but KriaaNet here is trying to use the COC procedures to make the case that the agency needed to allow it the opportunity to appeal to SBA to be considered for the follow-up task order. Now remember, KriaaNet is the company that just got terminated. So it has a number of other arguments, but on this argument, GAO says, “We’re not even going to consider that”. Under the procedures for reprocurements, when a company is defaulted and the agency reprocures, GAO has said the statutes and regulations governing federal procurements do not apply, and the COC process does not apply because of that.
That’s another reason agencies can avoid using the COC appeal process. We saw another one with the CSlope case—which I may be talking about with Scott Flesch—where the agency was able to make the case that it did not use a go/no-go procedure, that it was a comparative evaluation, and the agency was able to avoid the COC procedure. Here in KriaaNet, the agency is able to avoid it because the award to LBO is conducted under a reprocurement in FAR Part 49. So I will keep this case in mind in case I ever run into a reprocurement. Very interesting set of facts.
Case Law Update: Threat Tec & SBIR Protests
Then another GAO case, which is significant for anybody who works on SBIR, came out recently. It’s called Threat Tec. That name may sound familiar in the context of SBIR cases because there was a Court of Federal Claims decision about CICA stay procedures involving Threat Tec that came out just a few weeks ago. We’ll be talking more about stays in the next episode with Scott Flesch, but what eventually happened in that Court of Federal Claims case was that Threat Tec was denied the challenge to the override of the stay. So the agency was able to override the stay during the GAO case.
Now we see the GAO decision coming out in Threat Tec regarding SBIR. The outcome of this case is that you have to pay really close attention to who wins and who loses an SBIR award. Threat Tec had its protest dismissed not on the substance, but on timeliness. It got dismissed on timeliness because the agency had selected a company, Chitra Productions LLC out of Virginia Beach, that was awarded under SBIR Phase III, and Threat Tec did not know that when it brought the protest. Threat Tec actually protested in part because the agency did not give an explanation as to why Chitra was able to receive the award.
Very quickly in the protest response—just five days after the protest was filed—the agency told Threat Tec that the award was made to Chitra under Phase III. Eventually, on February 17th, Threat Tec filed a supplemental protest at GAO stating that Chitra hadn’t received an SBIR Phase I or Phase II. So how can it possibly receive a Phase III? That’s what Phase III is—it’s a follow-on to an SBIR Phase I or Phase II award. You can’t get a Phase III unless you’ve got an SBIR Phase I or Phase II.
Now, the agency has an explanation for it. You don’t see this in GAO cases very often, so it’s interesting that it’s even discussed. The agency is claiming that Chitra is a successor-in-interest to another company’s Phase II contract. Chitra had purchased IP and technology from a company called Architecture Technology Corporation (ATC) that had won a Phase II. That technology is what led to this Phase III acquisition. The agency said the technology it’s going to use in this Phase III contract is the same technology that ATC had designed under the Phase II contract.
Threat Tec tries to challenge that. There’s stuff about the DEC standard—derives from, extends, or completes. Maybe it’s arguing it’s not actually a successor-in-interest, but they don’t even get there. If you pay attention to the dates, the agency had told Threat Tec very early on, within five days of filing a protest, that Chitra was the company and had gotten the award under Phase III. At that point, GAO says, the clock starts to challenge Chitra’s SBIR Phase III. You can’t wait until you get more information from the agency in a request for dismissal or further filing.
The reason is you can look up all of this stuff on SBIR.gov. You can look up who’s won an SBIR Phase III award. GAO quotes the SBIR.gov website as having every SBIR award since the program’s inception. It says this is a publicly available government source—the same source the agency used when it conducted its search. So there’s an expectation that Threat Tec can’t wait to find out that Chitra is the successor-in-interest to this architecture firm. Instead, Threat Tec had the information at the time it knew the identity of the company to go search the SBIR.gov database and find out that the company’s not in the database.
GAO also goes through some of the discussion about the successor-in-interest argument and notes that they considered the argument that it’s not a successor-in-interest, determining Threat Tec had not given a reason to question the agency’s judgment. So it’s interesting there that once you know what the company is, you’ve got to go and find out what your challenges are to that company right away. You can’t wait until you get further explanation from the agency. GAO says a protester may not passively await information providing a basis for protest. Threat Tec did not file a timely supplemental protest challenging Chitra’s eligibility, and therefore its second supplemental protest was untimely.
SBIR Program Reauthorization
On that note, with SBIR, most people probably heard this, but the SBIR program was reauthorized through the Small Business Innovation and Economic Security Act that became law on April 13th. It was signed by the president, and it creates a new program: strategic breakthrough allocations for critical technology areas. That’s higher value SBIR awards that have to have a match to them.
It also requires agencies to set a maximum number of proposals per fiscal year that a company can submit in response to a Phase I or Phase II solicitation. That had been a big issue with multiple award winners—are we going to try to cap the number of awards? Here it’s a cap on the maximum number of proposals, and that’s set by the agency. There’s no specific cap in the legislation. It also expands requirements for federal agencies to evaluate security risks for small businesses that apply.
And if the agency denies an application for security reasons, the agency must provide the small business with a basis for such determination. We’ve heard from companies that are getting denied, and they don’t get a reason. The legislation requires the agency to provide the basis for that. So that’s the new Public Law 119-83 extending the SBIR program. It gets five years, so it’s now authorized through 2031—through Fiscal Year 2031. Hopefully, we don’t have to deal with all this stress and back and forth on the SBIR program when it gets to 2031.
OHA Suspension Appeals and the 8(a) Data Call
On the OHA front, OHA has been busy with the suspension appeals. Let’s see, 714 is the last one I saw. These are numbered sequentially, so you can kind of see how many they’ve done. Let me see, 714 is still the last one. They number all these cases, and at the beginning of this, they were at 638. They’re now at 714, which means they’ve done upwards of 80 suspension cases. All of these are dismissed. We have not seen a substantive suspension decision. For the most part, they’re dismissed because SBA has told the OHA judge that they’ve let the company back into the program.
I think a lot of what happened here is companies got suspended because they didn’t reply to the 8(a) data call, and they filed an appeal at OHA. They also filed the response to the data call with SBA at the same time. Now that they filed the response to the data call, SBA can take them off the suspension list. That means SBA can let them back into the program, and OHA, even if that happens—even if there’s really not a long period of suspension—still issues the decision. For firms that are suspended, they get the time they were suspended back on their 8(a) term. So if you’re suspended for 30 days, you get an extra 30 days at the end of your 8(a) term. You still get the full nine or 10 years in the program, even if you’re suspended from the program because of not replying to the data call.
Now, there are a number of companies that have been suspended because of concerns with their economic disadvantage. They may be over—or at least from SBA’s view, they may be over—some of the thresholds for economic disadvantage: $400,000 for income, $850,000 net worth, $6.5 million for assets. Some of those suspensions are coming through in these decisions as well. All told, there are probably well over 100 cases that have reached OHA, but many of them have been dismissed, and for the most part, it is because the company has gotten back in. I’m sure there are companies in here that have withdrawn from the program as well during the course of time and just seek not to continue to push their suspension.
OHA Case Law: Nisu and Identity of Interest Affiliation
There are a couple of substantive cases out of OHA. Let me see if there are any good ones here. We do have a case called Nisu. I may be trying to set up something about Nisu in the future, so I won’t go too far into it, but it’s an interesting identity of interest case. You don’t see identity of interest come up in these OHA cases as an affiliation ground very often. I think there was a point in time where identity of interest was a much bigger deal, but in the last few years, it seems to have waned in importance. This is potentially because of the way economic dependence has changed; they kind of made a big exception that follows the economic dependence rule.
But identity of interest comes up a lot with familial relationships. People who are related can have this identity of interest ground for affiliation, and those were the facts here. This happened in multiple stages. SBA finds a firm to be affiliated or not affiliated, and OHA reviews it. At the SBA stage, the SBA had found the firms to be affiliated because I believe it was a father-daughter relationship. The father was an executive at one firm, and the daughter was the head of an 8(a) company, and they were doing business together, including through a mentor-protégé relationship. The area office found affiliation, which would cause them to lose the contract that they were going after. Let’s see if I can find out what the contract was. It was an Air Force contract for sustainment, restoration, and modernization. So they’re affiliated, they lose the contract, but OHA actually granted the appeal and vacated the decision—not reversed it, but vacated it—and remanded it to the area office. I’ll be tracking that and seeing if we can have more discussion about it in the future.
The SBA Scorecard and Category Goals
The SBA Scorecard has made it into the news lately. There’s an article by Jason Miller in the Federal News Network about changes to the SBA Scorecard, and I was actually quoted in it. I know a bit about the SBA Scorecard; I used to run it. I was quoted in the article saying it’s probably time to change the SBA Scorecard because it’s been about the same for nine to 10 years, and the administrator has the ability to change it within some statutory confines. I pointed out in an earlier article that the numbers put out online didn’t actually add up to 100%. It was 110%. Apparently, SBA heard a little bit about that from Congress. There was a letter, summarized in the Jason Miller article, that went from the ranking member on the House Small Business Committee to SBA, pointing out that these numbers don’t add to 100—they add up to 110.
I think the biggest impact, as I noted when I first looked at the scorecard, is on the trade-off between the 8(a) program and veterans. The 8(a) program used to be a big emphasis for the scorecard in the Biden administration because that administration raised the goal for small disadvantaged businesses to 15%. In federal contracting, the only way you can target small disadvantaged businesses is through the 8(a) program. So, that was a bigger use of the 8(a) program encouraged by the scorecard under the Biden administration. Here, this administration is seeking to emphasize veterans. They’ve added veterans into the disadvantaged business category. They’ve created this economic disadvantage category and say veterans are presumptively economically disadvantaged. Veterans also have another category, the SDVOSB category. So it’s not clear whether that overlaps. Are you only counting veterans that are not service-disabled for that? Are you going to double-count service-disabled veterans for that?
There are additional elements in the scorecard that consider veterans. There’s actually a standalone category called “Serving Our Veterans” that is worth 15% of the scorecard. It says that increasing award dollars in outreach to SDVOSBs and veteran-owned small businesses could earn agencies that 15% of the scorecard, although I’m not sure if it’s going to stay 15% if it all adds up to 110. I told Jason Miller this in the article: my general view on the scorecard is that it can be effective for a bit. It leads to a letter grade. It’s good for agencies to get A’s; they want to get A’s, and people expect them to get A’s. But I think it’s more important to hold agencies to the actual numerical goal. There’s a 5% SDVOSB goal. The Department of Defense does not meet that 5% goal. Many agencies do. The VA is at over 25%, so they meet that goal. But a lot of agencies don’t meet that goal. I think it’s more important to hold agencies to those goals than it necessarily is to get them an A. Because you can see here, okay, you get 15% for increasing outreach. What does that really mean? How do you get that 15%? These things can go back and forth on the grade. Sometimes you can work the grade a little bit, just like you can in high school and college, but you can’t work the numbers. The numbers are what they are, and agencies that don’t meet their numerical goals should be held to account. I would focus more on those than I would on the grades.
Regulatory Developments: FAR Council and DEI Executive Order
Going over to other regulatory developments, there was the executive order that I discussed in my last podcast on addressing DEI discrimination. The FAR Council came out very quickly with its deviations for that executive order. They had a 30-day deadline, and they did it ahead of that deadline, which is pretty incredible. I think they actually did it the day before I filmed the podcast; I would have talked about it otherwise. The deviations are very similar to what you saw in the executive order. I’ll be talking about that a bit with my next podcast guest, Scott Flesch. The timelines are very aggressive on these deviations, and they also include incorporation into existing contracts. By July, agencies should look at incorporating the deviations into existing contracts through a bilateral modification. It says if a contractor refuses to agree to a bilateral modification, the CO should consider whether, absent the modification, the contract no longer meets the agency’s needs and should therefore be terminated for convenience. That’s a good reason for contractors to strongly consider allowing the modification to the contract, because otherwise, the CO will strongly consider whether it might be terminated for convenience. We’ll be talking about that in the future.
Q&A: AI in Source Selection and Bid Protests
Okay, I’m going to go to questions that I’ve received online, first in the articles, and then if there are any in the chat, I’ll go over those questions too. On the last podcast that I had in North Carolina, I talked about AI legal risks and what law firms were doing with AI, and what the government was doing with AI. There was a GSA clause on AI. There’s a good question in the comments about the government using AI as part of source selection. If the RFP states that the government is using AI to help in source selection, is that protestable, particularly since there aren’t any bumpers or guardrails for AI? I think that’s happening; I’ve seen it out there. Lufield Consulting is putting out some information about AI and source selection and how to deal with that.
I think we’ve seen it with SBA already with the terminations and suspensions. It looks like a lot of these suspension letters are at least combed through by AI, if not written by AI. And yes, is that protestable? If it’s unreasonable, then certainly it is. I think that’s why you see so many suspension appeals at OHA, and seeing that OHA is dismissing those because SBA is lifting those suspensions. A few of those suspensions might be lifted because AI got it wrong when it was going through and looking through all these files.
I think you could look at the same with AI in source selection. I always thought of it as having inherently governmental tasks, and source selection is inherently governmental. You’re not supposed to have contractors rating proposals. Shouldn’t it be the same way for AI? Could we use the inherently governmental guidance to say there has to be a human looking at this as well, because an AI is conducted through a contract? I suppose, unless you have an AI government employee, you’d have to develop the AI yourself within the government. I don’t think that’s happening. So I’d want to have some sort of explanation as to why the government is doing inherently governmental tasks under the OMB memo using AI. I’m sure it’s happening, though, especially with government employees leaving because of RIFs. There’s this Article II decision that came out recently, and government employees are leaving because of that. There are just fewer government employees around, so whether they’re directed to by their agency or not, I’m sure there’s AI being used in procurement. But yes, is it protestable? The AI is going to make mistakes. It’s probably going to make a lot more mistakes than humans will. We talked about that with Jackson Moore as to how many mistakes judges are pointing out during protests and such. So those mistakes are certainly protestable, no question.
Q&A: 8(a) Sole Source Trends for Native-Owned Firms
Then I got a question, and I have some data for this, so I’m excited to talk about it. Major Clark, who used to be the acting chief counsel for advocacy, asked: what’s the impact of the transition away from 8(a) sole source contracts on Alaskan and Native American businesses? And then, what are the characteristics of the small businesses that are winning sole source contracts? Let me share my screen on this, but I went back and looked at the data and updated it for 8(a) sole source awards. This is in the context of my article that said 8(a) sole source contracts have cratered. They were 50% more in previous years. In 2024, they were about 870, and then in 2026 they fell to 590. So a pretty big decrease—about a 40% decrease in 8(a) sole sources. Who’s getting those? Well, at this point in the year—so we’re about a month after I published that article—we’re now at 772 8(a) sole sources. This is still considerably down when you consider there were almost 900 the previous year.
Of those 772 as of the end of April, a little bit more than half are individual. There are 450 sole source contracts to individually owned firms, and 323 to Native-owned firms, which includes Tribal, ANC, and Native Hawaiian. Of those, 235 are to Alaska Native Corporation-owned firms. Individually owned firms still make up the large number of 8(a) firms, so they’re still getting a large number of 8(a) sole sources. There is a very considerable number going to ANCs, and then a smaller number to the tribes and Native Hawaiians. If you look at the number of sole sources by firms, though, it is dominated by Native-owned firms. I looked up all the sole source 8(a) contracts in Fiscal Year 2026 and the number to each individual firm. The top one is Chenega Government Mission Solutions. It has won nineteen 8(a) sole source contracts in Fiscal Year 2026, and of course, that’s a Native firm.
The top three are actually all Native firms. You have to go all the way to number four to find the first individually owned firm. That’s a firm called Aleto, out of Arlington. They got eight 8(a) sole sources. If you go all the way to the top 16, that’s the only one that’s individually owned. So the bulk of the multiple 8(a) sole source award winners are Native-owned firms, especially when you’re above five awards. The top individual ones are Aleto with eight, and then the next ones have four. So they’re being spread very evenly across individually owned firms, maybe just because there are so many more of those. Thank you, Major Clark, for that question.
Q&A: White House Procurements and Sole Source Contracts
I got another question on that post about 8(a) sole sources from Bill Elmore. He used to be at SBA in the Veterans Office. He said he’d be interested in the White House’s procurements and how those have progressed. Just in time, The New York Times did an investigative story to answer Bill’s question about how the White House’s procurements are going. There’s an article published by David Farenthold, Luke Broadwater, and Andrea Fuller titled, “The Firm Building Trump’s Ballroom Got a Secret No-Bid Contract for a Nearby Job.” The National Park Service increased the value of the contract several times over and then awarded it to Maryland-based Clark Construction in a process that experts said was highly unusual.
The circumstances involved Lafayette Park across from the White House. The Biden administration estimated the contract at $3 million. It was awarded to Clark for about $12 million, and then it got increased to $17 million. So it ended up well above the estimate and even above the original award amount. Because this same firm is building the ballroom, the suggestion in the article is that they’re getting extra money for the park because they’re working on the ballroom. It’s not said in those exact terms, but that seems to be the suggestion. They quote Steve Schooner and others about how this is really unusual to see. First of all, a sole source contract for the repair of a park is highly unusual because it’s not like somebody’s going to die because the park is in that shape. And also, it is highly unusual that there’d be such a large financial increase for the park project. I’ll put a link to that very well-researched story into the show notes.
Q&A: 8(a) Certifications and OHA Remand Timelines
We have a question from the chat now from the people on the live stream. Michael Mataccio asked: what are your thoughts on when SBA will return to proceeding with sending out approvals and denials for 8(a) certifications? Did I check this week? It’s been August 15, 2025, for so long that I don’t always check because it’s kind of boring if it’s the same every time. Let me go in and check. It’s been a really long time since SBA has sent approvals, but it’s also interesting to hear that maybe they haven’t been sending denials as well. I’ve heard from some firms—people contact me and say they’re in the last step of the 8(a) process, but they still haven’t gotten anything on their 8(a) application. It seems like if there are enough people experiencing this, they should bring some sort of request to SBA. There is a regulation that says SBA will decide applications within 90 days. So if there are companies out there that have been waiting for years in some of these cases, they’re definitely past that 90-day period.
Let me go in and check the database to see what the last firm is. Let’s see... no prediction on my part, certainly. I can’t tell you what SBA is going to do. I guess I can say that the staff doing the applications is probably the same staff doing the suspensions and terminations that may be wrapping up. So to the extent that the application processing shifted to the suspension processing, maybe those people can shift back to applications. Looking at the database, yes, the most recent firm still remains a firm that was certified on August 15, 2025, at least according to the SBA search website.
Then we have a comment or question from David Timm: how quickly do you expect SBA to issue a new size determination after an OHA remand? It varies a lot. There was a case about six months ago where OHA had remanded a size case to the area office. I think it was to find the firm other than small, but it had been nine months, and the firm still hadn’t gotten the remand decision from the area office. So OHA, in a very rare type of case—I’ve never seen one like it—just declared the firm to be small or other than small; I’d have to go back and find that case. But in that instance, it took nine months. There was another remand case recently involving JP Morgan, finding that JP Morgan was an investor with negative control in a company, and that was a remand as well. You can check to see how long SBA took to decide the remand in that case.
All right, that’s all I have. Thanks for joining me for data and case law updates, legislative updates, and tracking the SBA budget goings-on within the SBA Office of Advocacy. Keep your questions coming. I’ll have another podcast next week with Scott Flesch, where we’ll be going over recent bid protests and the executive order. Feel free to take a look at that, comment on it, and we’ll see you again soon. Thanks for joining, everybody.
With 20 years of Federal legal experience, Sam Le counsels small businesses through government contracting matters, including bid protests, contract compliance, small business certifications, and procurement disputes. Sam obtained his law degree from the University of Virginia and formerly served as SBA’s director of procurement policy. His website is www.samlelaw.com.
This video is for informational purposes only and does not constitute legal advice.
