Letter to SBA OIG on 8(a) sole-source awards (Oct. 30, 2025)

Summary

A letter dated October 30, 2025 from Joni K. Ernst, Chair, to Sheldon Shoemaker, Acting Inspector General and Deputy Inspector General of the U.S. Small Business Administration, on the 8(a) Business Development Program and sole-source awards. The letter states that in Fiscal Year 2024 the agency oversaw more than $40 billion in 8(a) contract awards and that a subset of 8(a) participants, the “Super 8(a)’s,” may be taking undue advantage of their ability to obtain sole-source awards in unlimited amounts. It requests that the SBA OIG immediately investigate ATI Government Solutions, Susanville Indian Rancheria as its Super 8(a) parent entity, and the network of 8(a) subsidiaries, citing allegations by the Citizen Journalism Foundation. It asks for a staff-level briefing by November 13, 2025.

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                                                  October 30, 2025

Mr. Sheldon Shoemaker
Acting Inspector General and Deputy Inspector General
U.S. Small Business Administration
409 3rd Street, SW
Washington, D.C. 20416

Dear Mr. Shoemaker,

The U.S. Small Business Administration’s (SBA) 8(a) Business Development Program is the largest
set-aside program at the agency, in Fiscal Year 2024, the agency oversaw more than $40 billion in
8(a) contract awards. 1 For nearly 20 years, the SBA Office of Inspector General (OIG) has
identified shortcomings and opportunities for fraud in the 8(a) program. 2 Specifically, within the
incentives created by the program’s deliberate restriction of competition for certain contracts to only
8(a) participants (“set-asides”), and elimination of competition altogether via no-bid, sole-source
awards. 3 Unfortunately, over the years an egregious pattern has emerged where a special subset of
8(a) participants, the “Super 8(a)’s,” may be taking undue advantage of their ability to obtain sole-
source awards in unlimited amounts. 4 These entities themselves generally do not participate in the
8(a) program; rather, businesses that are at least 51 percent owned and controlled by such entities
participate in the program (“8(a) subsidiaries”). This combination of an expansive and permissive
sole-source authority for 8(a) firms, with the ability to generate multiple 8(a) subsidiaries working
under the umbrella of a single parent Super 8(a) entity, creates the ideal conditions for criminals to
defraud the American taxpayers.



1 SBA, Scorecard Details, (July 14, 2025), available at https://www.sba.gov/federal-contracting/contracting-data/small-

business-procurement-scorecard/scorecard-details.
2 OIG REPORT 13-08, THE SBA MISMANAGED CERTAIN 8(A) TECHNOLOGY CONTRACTS (Dec. 3, 2012), available at

https://www.sba.gov/document/report-13-08-audit-report-13-08-sba-mismanaged-certain-8a-information-technology-
contracts; see also OIG REPORT 9-15, PARTICIPATION IN THE 8(A) PROGRAM BY FIRMS OWNED BY ALASKA NATIVE
CORPORATIONS (Jul. 10, 2009), available at https://www.sba.gov/document/report-9-15-report-9-15-participation-8a-
program-firms-owned-alaska-native-corporations-71009.
3 15 U.S.C. § 636(j)(10); see also 15 U.S.C § 637(a).
4 Super 8(a)’s include: Alaska Native Corporations (ANCs), Native Tribes, Native Hawaiian Organizations (NHOs),

and Community Development Corporations (CDCs). Sole-source contracts are authorized for 8(a) individual
participants for up to $7M in construction and manufacturing, and $4.5M for all other acquisitions. In contrast, there are
no limits to a sole-source contract award for Super 8(a) participants, however a written justification must be made for a
sole source award exceeding $30 million for civilian agencies, and $150 million for defense agencies. Federal
Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds, 90 Fed. Reg. 41872, (Aug. 27, 2025),
available at https://www.federalregister.gov/documents/2025/08/27/2025-16412/federal-acquisition-regulation-
inflation-adjustment-of-acquisition-related-thresholds.
Mr. Sheldon Shoemaker
October 30, 2025
Page 2 of 4

A new alleged fraud scheme involving ATI Government Solutions highlights these ongoing
vulnerabilities in the 8(a) program. This year alone, SBA has already ordered a full-scale audit,
issued formal guidance to contracting officers on 8(a) fraud, rescinded USAID’s 8(a) contracting
authority, and reinstated the “bona fide place of business” rule. 5 Now, I request the SBA OIG
immediately investigate ATI, its Super 8(a) parent entity Susanville Indian Rancheria, and its
network of 8(a) subsidiaries, while conducting a thorough review of the program with priority on
whistleblower tips and allegations of wrongdoing.

A recent citizen investigation undertaken by the Citizen Journalism Foundation (CJF), an
organization affiliated with the O’Keefe Media Group, asserted that it uncovered a “$100 billion
federal contracting scam. 8(a) firm admits to violating federal law using minority-owned status as a
front to obtain $100M+ no-bid government contracts while outsourcing 80 percent of the work.” 6
The investigation focuses on 8(a) technology services contractor, ATI Government Solutions (ATI),
and its Super 8(a) parent, the tribal entity Susanville Indian Rancheria (Susanville). 7

These allegations cast doubt on compliance with the Limitations on Subcontracting rule, which
requires 8(a) participants on services contracts to perform at least 50 percent of the work itself. 8
While this requirement is designed to restrict small businesses from acting as pass-through
companies for ineligible firms, in practice, weak enforcement of this rule leaves the door open for
abuse. 9

The continuing alleged exploitation of the 8(a) Program in this way, with such apparent ease, is the
symptom of larger, cumulative failures over the years to adequately safeguard the program against
systematic abuse. For years, the 8(a) Program has been riddled with challenges, and its many flaws
have subjected the program to over a dozen investigations and audits by government watchdog




5 Press Release, SBA, Administrator Loeffler Orders Full-Scale Audit of 8(a) Contracting Program, (June 27, 2025),

available at https://www.sba.gov/article/2025/06/27/administrator-loeffler-orders-full-scale-audit-8a-contracting-
program; see also Press Release, SBA, SBA Issues Letter of Warning to Federal Contracting Officers, (July 29, 2025),
available at https://www.sba.gov/article/2025/07/29/sba-issues-letter-warning-federal-contracting-officers; see also
Press Release, SBA, SBA Rescinds USAID Contracting Authority Following Massive Bribery Scandal, (July 30, 2025),
available at https://www.sba.gov/article/2025/07/30/sba-rescinds-usaid-contracting-authority-following-massive-
bribery-scandal; see also Press Release, SBA, SBA Reinstates Rule to Return Federal Contractors to Work, (June 17,
2025), available at https://www.sba.gov/article/2025/06/17/sba-reinstates-rule-return-federal-contractors-work.
6 James O’Keefe (@JamesOKeefeIII), X (Oct. 20, 2025, at 2:44 PM ET), available at

https://x.com/JamesOKeefeIII/status/1980344367014429114.
7 Id.
8 FAR 19.108-8(a)(1).
9 GAO, GAO-14-706, 8(A) SUBCONTRACTING LIMITATIONS: CONTINUED NONCOMPLIANCE WITH MONITORING

REQUIREMENTS SIGNALS NEED FOR REGULATORY CHANGE (Sept. 16, 2014), available at
https://www.gao.gov/products/gao-14-706.
Mr. Sheldon Shoemaker
October 30, 2025
Page 3 of 4

agencies, including your own. 10 Just recently this past June, the Department of Justice found that the
8(a) Program was the primary vehicle used to facilitate a decades-long bribery scheme involving
over $550 million in contracts; four men, including a government contracting officer at the United
States Agency for International Development, pled guilty to the charges. 11

I am encouraged by the quick work of the Trump Administration to take corrective action, in
response to this ATI scheme. Within a day of the breaking CJF investigation, Administrator
Loeffler announced an investigation into ATI and Susanville Indian Rancheria; two days later, the
Administrator suspended ATI and three of its executives from any new contracting with the federal
government. 12 Days later, the Department of the Treasury and the General Services Administration



10 11 reports from the GAO and 4 reports from the SBA OIG.    GAO, GAO-22-105567, DOD SMALL BUSINESS
CONTRACTING: USE OF SOLE-SOURCE 8(A) CONTRACTS OVER $22 MILLION HAS INCREASED (Mar. 28, 2022), available
at https://www.gao.gov/products/gao-22-105567 see also GAO, GAO-22-104146, DOD SMALL BUSINESS
ADMINISTRATION: STEPS TAKEN TO VERIFY TRIBAL RECOGNITION FOR 8(A) PROGRAM (Dec. 02, 2022), available at
https://www.gao.gov/products/gao-22-104146 see also GAO, GAO-20-184T, DOD SMALL BUSINESS ADMINISTRATION:
STEPS TAKEN ON LONG-STANDING WEAKNESSES IN SBA’S OVERSIGHT OF TRIBAL 8(A) FIRMS, BUT ADDITIONAL
ACTIONS NEEDED (Oct. 22, 2019), available at https://www.gao.gov/products/gao-20-184t see also GAO, GAO-16-113,
ALASKA NATIVE CORPORATIONS: OVERSIGHT WEAKNESSES CONTINUE TO LIMIT SBA’S ABILITY TO MONITOR
COMPLIANCE WITH 8(A) PROGRAM REQUIREMENTS (Mar. 21, 2016), available at https://www.gao.gov/products/gao-16-
113 see also GAO, GAO-14-706, SUBCONTRACTING LIMITATIONS: CONTINUED NONCOMPLIANCE WITH MONITORING
REQUIREMENTS SIGNALS NEED FOR REGULATORY CHANGE (Sep. 16, 2014), available at
https://www.gao.gov/products/gao-14-706 see also GAO-13-118, FEDERAL CONTRACTING: SLOW START TO
IMPLEMENTATION OF JUSTIFICATIONS FOR 8(A) SOLE-SOURCE CONTRACTS (Dec. 12, 2012), available at
https://www.gao.gov/products/gao-13-118 see also GAO, GAO-12-84, FEDERAL CONTRACTING: MONITORING AND
OVERSIGHT OF TRIBAL 8(A) FIRMS NEED ATTENTION (Jan. 31, 2012), available at https://www.gao.gov/products/gao-12-
84 see also GAO, GAO-11-440T, 8(A) PROGRAM: THE IMPORTANCE OF EFFECTIVE FRAUD PREVENTION CONTROLS
(Mar. 03, 2011), available at https://www.gao.gov/products/gao-11-440t see also GAO, GAO-10-353, SMALL BUSINESS
ADMINISTRATION: STEPS HAVE BEEN TAKEN TO IMPROVE ADMINISTRATION OF THE 8(A) PROGRAM, BUT KEY CONTROLS
FOR CONTINUED ELIGIBILITY NEED STRENGTHENING (Mar. 30, 2010), available at https://www.gao.gov/products/gao-
10-353 see also GAO, GAO-10-425, 8(A) PROGRAM: FOURTEEN INELIGIBLE FIRMS RECEIVED $325 MILLION IN SOLE-
SOURCE AND SET-ASIDE CONTRACTS (Mar. 30, 2010), available at https://www.gao.gov/products/gao-10-425 see also
OIG REPORT 21-12, EVALUATION OF SBA’S ELIGIBILITY VERIFICATION OF 8(A) FIRMS OWNED BY MEMBERS OF
FEDERALLY OR STATE- RECOGNIZED INDIAN TRIBES (March 31, 2021), available at
https://www.sba.gov/document/report-21-12-evaluation-sbas-eligibility-verification-8a-firms-owned-members-
federally-or-state-recognized-indian see also OIG REPORT 18-22, IMPROVEMENTS NEEDED IN SBA’S OVERSIGHT OF 8(A)
CONTINUING ELIGIBILITY PROCESSES (Sept. 7, 2018), available at https://www.sba.gov/document/report-18-22-
improvements-needed-sbas-oversight-8a-continuing-eligibility-processes see also OIG REPORT 13-06-I, ADVISORY
MEMORANDUM 13-06-I REGARDING SECTION 8(A) ANNUAL REVIEW (Nov. 13, 2012), available at
https://www.sba.gov/document/report-13-06-i-advisory-memorandum-13-06-i-regarding-section-8a-annual-review see
also OIG REPORT 13-01-I, ADVISORY MEMORANDUM 13-01-I REGARDING THE SECTION 8(A) PROGRAMS' USE OF
INTERNAL REVENUE SERVICE TAX VERIFICATION FORM 4506T (Oct. 4, 2012), available at
https://www.sba.gov/document/report-13-01-i-advisory-memorandum-13-01-i-regarding-section-8a-programss-use-
internal-revenue-service-tax.
11 Press Release, Dep't of Justice, USAID Official and Three Corporate Executives Plead Guilty to Decade-Long

Bribery Scheme Involving Over $550 Million in Contracts; Two Companies Admit Criminal Liability for Bribery
Scheme and Securities Fraud, (June 12, 2025), available at https://www.justice.gov/opa/pr/usaid-official-and-three-
corporate-executives-plead-guilty-decade-long-bribery-scheme.
12 Kelly Loeffler (@SBA_Kelly), X (Oct. 20, 2025, at 6:18 PM ET), available at

https://x.com/SBA_Kelly/status/1980398153980342614.
Mr. Sheldon Shoemaker
October 30, 2025
Page 4 of 4

followed Administrator Loeffler’s lead, suspending ATI from participating in government
contracts. 13

In this fight against fraudsters, crooks, and swindlers, the American taxpayers are losing. Your
office is uniquely positioned to track down, investigate, and recommend prosecution of bad actors.
In the coming days and months, I expect to see significant 8(a)-related accountability actions and
investigations initiated. To this end, I request that you immediately take the following actions and
provide a staff-level briefing by November 13, 2025:

    1. Assess the credibility of all allegations made by CJF concerning ATI and Susanville.
           a. Focus specifically on the alleged violation of the limitations on subcontracting by
              ATI.
           b. If credible evidence of wrongdoing is found, initiate a thorough investigation into the
              offending parties.
           c. Inform the Committee of the IG’s decision to launch its own investigation into ATI
              and/or Susanville or not.
           d. If not, please provide a written explanation.
    2. An examination into Susanville’s network of 8(a) subsidiaries and whether there is credible
       evidence of wrongdoing amongst those entities.
    3. Examine the IG Hotline for actionable, plausible tips and evidence implicating current or
       former government contractors and the 8(a) program, Super 8(a)’s, or 8(a) subsidiaries.

Thank you for your prompt attention to this important matter. If you have any questions, please do
not hesitate to contact Meredith West at Meredith_West@sbc.senate.gov or (202) 224-5175.


                                                  Sincerely,



                                        _______________________
                                              Joni K. Ernst
                                                 Chair




13 Kelly Loeffler (@SBA_Kelly), X (Oct. 22, 2025, at 11:47 AM ET), available at

https://x.com/SBA_Kelly/status/1981024674885566517; see also Treasury Secretary Scott Bessent
(@SecScottBessent), X (Oct. 22, 2025, at 9:13 PM ET), available at
https://x.com/SecScottBessent/status/1981167068692025455; see also Office of the FAS Commissioner
(@FASCommissioner), X (Oct. 23, 2023, at 2:23 PM ET), available at
https://x.com/FASCommissioner/status/1981426148950040988.


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