Government contractors who abused minority “set-aside” programs could wind up in jail.
By Catholics for Catholics
No more preferential treatment.
The Small Business Administration instructed all companies that get first choice for government contracts due to their status as “socially disadvantaged” minorities, to provide comprehensive financial information to show they are not defrauding the program.
The shift denotes a move to reconsider a decades-old program that Washington insiders have long considered as clearly corrupt. The 8(a) program is one of the largest and oldest DEI initiatives in the country, affecting contracts at almost all federal agencies, according to the Daily Wire
On Friday, SBA administrator Kelly Loeffler said there is increasing evidence that minority contracts had become “a pass-through vehicle for rampant abuse and fraud,” especially after the Biden administration raised the target for contracts that are “set aside” for minorities from 5% to 15% of all contracting dollars.
“We’re committed to thoroughly reviewing every federal contract, contracting officer, and contractor — while working alongside federal law enforcement,” she said.
“Today, as part of the SBA’s effort to protect taxpayer dollars and restore program integrity, we’re requiring all 8(a) firms to provide basic financial documentation for SBA review,” Loeffler said. “As our previously-announced government-wide audit continues, we’re committed to thoroughly reviewing every federal contract, contracting officer, and contractor – while working alongside federal law enforcement and other agencies to deliver accountability for taxpayers.”
The Daily Wire reported that the records will shed light on the degree to which companies are subcontracting out the work to non-“disadvantaged” firms, while keeping a cut for serving as a middleman or “front” company. That would defeat the purpose of the program and result in higher prices for government services across the board.
The Wire reported that undercover journalist James O’Keefe discovered employees from one such firm bragging that they did exactly that. O’Keefe Media Group published a video exposing ATI Government Solutions, an 8(a) firm based on Native American ownership that is run by whites.
Anish Abraham, senior director at ATI Government Solutions, admitted that his company was a “pass-through” that received a $100 million contract, kept $65 million, and paid another firm $35 million to do the work.
Such reports “have raised questions about widespread misconduct within the 8(a) Business Development Program, adding to years of credible concerns that the program designed to serve ‘socially and economically disadvantaged’ businesses has become a vehicle for institutionalized abuse at taxpayer expense,” the SBA wrote to each of the 4,300 “disadvantaged” contractors.
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