In a hugely important press release that was sent out on November 6, the Treasury Department announced that it was reviewing billions of dollars in federal contracting after discovering $253 million in alleged fraud connected to one of its major contractors, and aims to root out all the fraud it finds while holding the wrongdoers accountable.
For reference, at issue in this crackdown is the Small Business Administration’s (SBA) 8(a) Business Development Program, which provides preferential opportunities for “experienced socially and economically disadvantaged small business owners, who have already been in business for at least two years or more,” according to the SBA.
Announcing the crackdown, the Treasury announced that it would be investigating $9 billion in “preference-based contracting,” saying, “The U.S. Department of the Treasury today announced a comprehensive audit of all contracts and task orders awarded under preference-based contracting, totaling approximately $9 billion in contract value across Treasury and its bureaus.”
Continuing, it explained which program was at issue and noted that “potential misuse” of it is suspected, saying, “The audit will examine potential misuse of the Small Business Administration’s 8(a) Business Development Program, and other initiatives that provide federal contracting preferences to certain eligible businesses.”
Then, noting that massive fraud was recently discovered, suggesting that such fraud was the reason for this crackdown, the Treasury statement said, “These actions follow Treasury’s earlier suspension and termination of all contracts and task orders with ATI Government Solutions, following allegations of fraud involving more than $253 million in previously issued contract awards.”
Describing the scheme at issue and noting how the SBA program might have been misused, the Treasury statement provided, “Under President Trump’s leadership, Treasury is focused on detecting and eliminating fraud and abuse of taxpayer dollars. Prior use of contracting preferences that fall outside normal procurement rules may have enabled large companies to use pass-through arrangements where an eligible small business retains fees for minimal participation, while subcontracting nearly all work. Most of the contracts under review were awarded by the Biden administration’s equity in procurement initiative.”
Treasury Secretary Scott Bessent, describing what the goal of this operation is and how the Trump Administration is aiming to obliterate fraud, said, “President Trump has directed his administration to eliminate fraud and waste wherever it occurs, ensuring that each taxpayer dollar is spent as intended.”
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Continuing, he explained that fraud will not be tolerated and taxpayer dollars will be protected from this nefarious activity, saying, “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.”
Also chiming in was Kelly Loeffler, Administrator of the U.S. Small Business Administration, who said, “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.”
She further added, “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.”
Watch Elon Musk comment on SBA fraud he found when in charge of DOGE here:
.@elonmusk: “There were over $300M of @SBAgov loans that’s been given out to people under the age of 11… the youngest recipient of an SBA loan is a 9 month old.. obviously, which is fraudulent.” pic.twitter.com/Tz5Lwmzw4S
— Rapid Response 47 (@RapidResponse47) March 27, 2025