The United States Agency for International Development lost the right to independently issue or manage government contracts with small businesses, a sharp rebuke from an administration that views the agency as rife with corruption.
In a Wednesday announcement, the U.S. Small Business Administration revoked USAID’s ability to contract with and award grants to small businesses, citing recent discoveries of systemic fraud.
“The decision to revoke USAID’s independent 8(a) contracting authority is necessary to prevent further wrongdoing by an agency with a well-documented record of waste, criminal fraud, and bribery,” SBA Administrator Kelly Loeffler said. “Taxpayers will no longer foot the bill for outright corruption perpetrated by those entrusted with Americans’ hard-earned tax dollars.”
In June, the Department of Justice uncovered a decade-long criminal scheme involving three companies who bribed a USAID official to receive a cumulative $550 million in government contracts.
Loeffler said SBA will “pursue all available actions to recover the misused funds.” She recently ordered a full-scale audit of the 8(a) program to review all contracts over the past 15 years for instances of fraud, bribery, and other corrupt practices.
USAID awarded approximately $3.6 billion in federal contracts through the 8(a) program in 2024. The loss of USAID’s independent contracting authority could deal a blow to its humanitarian aid efforts.
SBA’s actions constitute the most recent effort by the Trump administration to dismantle USAID, the largest provider of international humanitarian aid. The independent federal agency has come under fire from Republicans for its funding of diversity initiatives, climate programs, abortion, LGBTQ+ activism, and armed terrorist groups around the world.
