Watchdogs find billions in misspent small-biz awards as SBA expands eligibility

FEDERAL OVERSIGHT REPORTS REVEAL BILLIONS IN QUESTIONABLE SMALL-BUSINESS CONTRACTING AWARDS AS SBA PROPOSES EXPANDING ELIGIBILITY

SAN FRANCISCO, CA, UNITED STATES, November 10, 2026 /EINPresswire.com/ -- A series of federal oversight reports has exposed significant failures in the administration and enforcement of federal small-business contracting programs, raising serious questions about the Small Business Administration's ability to protect opportunities for genuinely small businesses as it proposes sweeping changes to eligibility standards.

Reports from the Government Accountability Office (GAO), the SBA Office of Inspector General (OIG), and the General Services Administration Inspector General document billions of dollars in contracts affected by inaccurate reporting, inadequate eligibility verification and failures to enforce requirements designed to protect small businesses.

Among the findings:
• $1.1 billion in improperly reported awards: A March 2025 GAO report found that approximately $1.1 billion in federal contracts reported as small-business awards had actually gone to companies that did not meet applicable SBA size standards. Another $1.9 billion could not be verified.

• $89 million in misclassified procurements: A 2020 GSA Inspector General report identified $89 million in procurements incorrectly recorded as small-business awards, along with approximately $120 million involving large-business performance that was not adequately captured in reporting.

• $850 million contract involving a major lender's affiliate: An April 2022 SBA Inspector General report found serious oversight failures involving a small-business set-aside contract largely performed by an affiliate of a major mortgage lender. The investigation identified approximately $13 million in payments exceeding applicable subcontracting limitations.

• Recurring subcontracting enforcement failures: A September 2026 SBA Inspector General report found continuing deficiencies across federal agencies in monitoring and enforcing subcontracting limitations on small-business set-aside contracts.

These findings come at a particularly troubling time. SBA is proposing to consolidate 978 industry-specific size standards into 338 broader categories, potentially making approximately 114,541 additional businesses eligible for small-business contracting programs. Approximately 37,002 of those companies already hold federal contracts worth more than $71 billion.

The Don’t Cheat Women Project (DCW) argues that expanding eligibility without first addressing documented oversight failures risks further disadvantaging the genuinely small businesses these programs were created to support.

"The success of federal small-business programs should not be measured by how many companies the government can classify as small. It should be measured by whether small businesses are actually receiving the opportunities and taxpayer-funded contracts intended for them,” said Laura Cherry, Director of the Don’t Cheat Women Project.

DCW is urging SBA to reconsider the proposed changes, strengthen eligibility verification, improve transparency in federal contracting data, and demonstrate that existing safeguards are working before dramatically expanding the pool of eligible businesses.

The federal government is the largest marketplace in America. Small businesses deserve a meaningful opportunity to compete in it—not to have those opportunities diluted by inadequate oversight and ever-expanding eligibility standards.

To find links to the US Government Accountability Office reports go to: https://asbl.com/press-room/consolidated-document-library/

About the American Small Business League and Don’t Cheat Women Project
Led by president and founder Lloyd Chapman, the American Small Business League (ASBL) has advocated for small-business contracting opportunities for more than 40 years. The Don’t Cheat Women Project builds on that work, advocating for an increase in the federal contracting goal for women-owned small businesses from 5% to 15%.

Laura Cherry
Don't Cheat Women Project
+1 415-404-7733
l.cherry101@protonmail.com