What 8(a) Contractors Should Do After Receiving an SBA Suspension Notice

By Aron C. Beezley and Nathaniel J. Greeson of Bradley Arant Boult Cummings LLP
Originally published February 17, 2026

A suspension notice from the U.S. Small Business Administration (SBA) can have immediate and significant consequences for a participant in the 8(a) Business Development Program. While a suspension is not the same as a final termination, it typically halts a firm’s ability to receive new 8(a) contract awards and may jeopardize its continued participation in the program.

If your company receives a suspension notice, prompt and strategic action is essential. Here are eight things to consider:

1. Carefully Review the Suspension Letter

The SBA’s notice should identify:

• The specific regulatory or statutory grounds for suspension (e.g., exceeding economic disadvantage thresholds, failure to submit annual review materials, misrepresentation concerns);
• The effective date of the suspension;
• The time period to respond; and
• Instructions for requesting reconsideration or submitting additional documentation.

Pay close attention to response deadlines. These are often short and strictly enforced.

2. Preserve and Gather Relevant Documentation

Immediately assemble documentation relevant to the SBA’s stated grounds for suspension, which may include:

• Personal financial statements;
• Tax returns (typically three years);
• Balance sheets and income statements;
• Ownership and operating agreements;
• Prior annual review submissions; and
• Correspondence with SBA officials.

Ensure that all materials are accurate, consistent, and complete before submission. Inconsistencies can compound the issue.

3. Evaluate the Basis for Suspension

Common grounds for suspension include:

• Exceeding statutory limits for personal net worth, adjusted gross income, or total assets;
• Failure to submit required annual review documentation;
• Questions regarding control or ownership; or
• Potential misrepresentations.

Your response strategy will depend on whether the issue is:

• A correctable administrative deficiency (e.g., missing documents);
• A disputed financial calculation; or
• A substantive eligibility issue that may require legal argument.

4. Submit a Timely and Substantive Response

In most cases, the SBA provides an opportunity to submit a written response explaining why the suspension should be lifted. An effective response should:

• Address each ground for suspension directly;
• Cite applicable regulations (generally found at 13 C.F.R. Part 124);
• Provide supporting documentation; and
• Clearly explain any mitigating circumstances or errors in the SBA’s findings.

If the issue involves financial thresholds, careful recalculation and explanation of exclusions (where permitted under SBA regulations) may be critical.

5. Understand Reconsideration and Appeal Rights

a. Reconsideration Within SBA

If the SBA issues a proposed termination following suspension, the firm typically has the right to:

• Submit a written response opposing termination; and
• Request reconsideration based on factual or legal errors.
• The SBA will review the submission and issue a final determination.

b. Appeal to the SBA Office of Hearings and Appeals (OHA)

If the SBA issues a final termination decision, the firm may have the right to appeal to the SBA Office of Hearings and Appeals (OHA).

Key considerations:

• Appeals must generally be filed within a short window (often 45 days, depending on the type of determination).
• OHA reviews whether the SBA’s decision was based on clear error of fact or law.
• The appeal is typically decided on the written record, although procedural rules must be strictly followed.

Missing the appeal deadline can forfeit your rights.

6. Assess Impact on Current and Future Contracts

A suspension may affect:

• Eligibility for new 8(a) set-aside awards;
• Pending offers for sole-source contracts;
• Option exercises on existing 8(a) contracts; and
• Mentor-protégé relationships.

Contractors should coordinate with legal counsel and contracting officers as appropriate and assess whether performance on existing contracts may continue during the suspension period.

7. Consider Broader Risk Exposure

Depending on the underlying issue, a suspension could trigger additional scrutiny, including:

• Size protests;
• Negative CPARS reviews;
• Suspension or debarment referrals;
• False Claims Act exposure if eligibility certifications were inaccurate.

A proactive compliance assessment may be advisable to evaluate enterprise-wide risk.

8. Engage Experienced Counsel Early

Because suspension can quickly escalate into termination or other enforcement actions, early legal guidance can help:

• Frame the response effectively;
• Preserve appeal rights;
• Avoid inadvertent admissions; and
• Develop a strategy for either reinstatement or transition planning.

Conclusion

An SBA suspension notice is serious — but it is not necessarily the end of your 8(a) participation. Contractors should act immediately, respond thoroughly, and preserve all reconsideration and appeal rights. With careful documentation and a strategic response, some suspensions can be resolved before they result in permanent termination from the program.

 

Aron C. Beezley is the co-leader of Bradley’s nationally ranked Government Contracts Practice Group. Beezley’s experience includes representation of government contractors in numerous industries and in all aspects of the government-contracting process, including negotiation, award, performance, and termination. He can be reached at abeezley@bradley.com or 202.719.8254.

 

Nathaniel J. Greeson is a Partner with Bradley. He helps clients solve government contracts challenges. Greeson represents clients in a range of government procurement issues, including bid protests, claims, disputes, audits, and investigations. He can be reached at ngreeson@bradley.com or 202.719.8202.

 

Republished with permission. The article, “What 8(a) Contractors Should Do After Receiving an SBA Suspension Notice” was originally published on BuildSmart by Bradley Arant Boult Cummings LLP. Copyright 2026.