The Treasury Department has launched an investigation into possible misuse of a Small Business Administration program that awarded federal contracts worth up to $9 billion.
The department said in a news release Thursday that it will conduct a comprehensive audit of all contracts and task orders awarded under preference-based contracting through the SBA’s 8(a) Business Development Program and related initiatives.
“President [Donald] Trump has directed his administration to eliminate fraud and waste wherever it occurs, ensuring that each taxpayer dollar is spent as intended,” Treasury Secretary Scott Bessent said in the release. “Treasury will not tolerate fraudulent misuse of federal contracting programs.
“These initiatives must benefit legitimate small businesses that deliver measurable value to the government and the public.”
The 8(a) Business Development Program allows small businesses to compete for federal contracts and provides opportunities such as access to SBA mentorship, guidance from compliance experts and priority eligibility for federal surplus property.
To qualify, companies must be at least 51% owned and controlled by U.S. citizens who are economically and socially disadvantaged — meaning people who have faced bias, often racial or cultural, that has limited their ability to succeed in business and who also have reduced access to capital or credit compared with others in their industry.
Applicants must also meet financial limits: a personal net worth of $850,000 or less, an adjusted gross income of $400,000 or less and assets totaling $6.5 million or less.
They must demonstrate good character and the potential for success, such as at least two years of business operations.
The department said the investigation follows the suspension and termination of all contracts with ATI Government Solutions, a technology services firm accused of defrauding the 8(a) program of more than $253 million in previously issued awards.
In June, SBA Administrator Kelly Loeffler ordered a separate review of the 8(a) program amid similar allegations of fraud.
“During the Biden Administration, federal contracting set-aside programs proliferated without scrutiny or oversight — which is why the SBA launched a full audit of the 8(a) Business Development Program earlier this year to examine contracts across every agency,” Loeffler said in the release. “This Administration will not tolerate DEI-based contracting and abuse that compromises opportunity for legitimate and eligible small businesses.
“I am grateful to Secretary Bessent for his commitment to rooting out fraud at the Department of the Treasury and for taking major steps to help SBA stop the rampant waste of taxpayer dollars.”
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