SBA strips USAID of 8(a) contracting authority following $550M bribery scandal

SBA has rescinded the U.S. Agency for International Development’s authority to independently award sole-source 8(a) contracts after a decade-long bribery scheme steered over $550 million in contracts to two firms, reported the Washington Business Journal.

The SBA decision follows a joint DOJ-USAID Inspector General investigation that resulted in a USAID contracting officer’s pleading guilty to accepting $1 million in bribes—including cash, mortgage payments, event tickets, and lavish gifts—from executives at Apprio, Inc. and PM Consulting Group (doing business as Vistant).

The KO then steered contracts to the firms through the 8(a) business development program, which aims to support small, minority-owned businesses with set-asides and sole-source awards. The program’s sole-source authority is among the broadest and most widely used in government; under 8(a) sole-sources, buying agencies issue directed awards via SBA.

According to DOJ, bribes were funneled via shell companies and concealed with false payroll and invoices. Both Apprio and Vistant have agreed to deferred prosecution agreements and will pay reduced penalties due to financial hardship, along with installing new compliance measures.

“The decision to revoke USAID’s independent 8(a) contracting authority is necessary to prevent further wrongdoing,” said SBA Administrator Kelly Loeffler. Although USAID obligated $3.6 billion through the 8(a) program last year, the agency has since been chopped by the Trump administration.

The SBA is auditing 8(a) contracts issued over the past fifteen years, initially focusing on high value, limited-competition awards.