BY TYLER DURDEN
SATURDAY, DEC 06, 2025 – 06:00 AM
The Daily Wire has learned that the Small Business Administration has ordered all 4,300 firms in its 8(a) "socially disadvantaged" program, which receive no-bid federal contracts, to turn over their financial records, including general ledgers, bank statements, payroll files, subcontracting agreements, and other internal documents, by January 5 or face removal from the program.
SBA’s crackdown on one of Washington’s oldest DEI initiatives follows mounting evidence that some 8(a) firms have become a major pipeline for fraud, pass-through schemes, and artificially inflated contract costs.
Late last month, Peter Schweizer, president of the Government Accountability Institute and the investigative journalist who broke the Clinton Cash corruption story, published a report exposing the cronyism and corruption inside the 8(a) program, where pass-through firms handed bidless contracts on silver platters while quietly outsourcing the real work to major consulting companies.
"For years, DC insiders have exploited a federal DEI contracting program that provides windfalls to Beltway elites. This open secret isn’t about helping the downtrodden; it’s about bagging no-bid paydays. The SBA’s 8(a) program is long overdue for reform," Schweizer wrote on X.
There was also a recent U.S. Treasury Department investigation into $9 billion in small-business contracting, amid alarming concerns from Treasury Secretary Scott Bessent and others about rampant fraud and abuse in preference-based programs. In other words, meritocracy will return under the Trump administration.
Everyone in the DC consulting world understands how the game works: set up a compliant 8(a) "small business," win the no-bid award, and let the big consulting firms do all the work.
Several firms, including ATI, have since been suspended. Native American tribes whose names were used in pass-through schemes are also under increasing scrutiny.
SBA Administrator Kelly Loeffler said there is mounting 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 "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," Loeffler said.
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