Sen. Joni Ernst Asks 24 Agencies to Freeze SBA 8(a) Contracting Program Amid Fraud Allegations

Republican Sen. Joni Ernst, chair of the Senate Small Business Committee, has asked leaders at 24 federal agencies to pause funding and new awards under the Small Business Administration’s 8(a) business development program while alleged fraud and corruption tied to some participants are investigated.

What Ernst Is Asking For

In letters to agency heads, Ernst requested an immediate halt to new 8(a) no-bid awards, audits of current contracts, and reviews of set-aside awards issued since fiscal year 2020. She asked agencies to report findings to the Senate Committee on Small Business and Entrepreneurship by Dec. 22. Ernst says the program has grown substantially and that recent enforcement actions and reporting show systemic weaknesses that must be addressed.

Background On The 8(a) Program

The SBA’s 8(a) Business Development Program is intended to help socially and economically disadvantaged small businesses by providing training, counseling, and access to federal contracting opportunities set aside for eligible participants. According to the letters, the program accounted for more than $40 billion in contract awards in fiscal year 2024.

Investigations And Enforcement Actions

Ernst’s push follows multiple probes and enforcement actions. In June, the Department of Justice arrested four people in connection with an alleged decade-long bribery scheme that the DOJ said involved at least 14 8(a) contracts valued at more than $550 million; those defendants later pleaded guilty. Separately, undercover reporting cited by Ernst published an interview in which representatives of an 8(a) firm reportedly admitted using minority-owned status to secure substantial no-bid contracts and outsourcing most of the work.

The SBA has initiated a multi-year audit of contracting officers who awarded grants and contracts under the 8(a) program and has asked registered 8(a) contractors to provide financial records as part of a broader effort to detect fraud, waste and abuse. Treasury officials have also announced a comprehensive review of preference-based contracting across bureaus, focusing in part on 8(a)-related awards totaling roughly $9 billion.

Legislative And Agency Responses

Sen. Ernst introduced the "Stop 8(a) Contracting Fraud Act," which would suspend new no-bid awards until an exhaustive audit and report are completed. The SBA has said it will prioritize reviews of high-dollar and limited-competition contracts within the 8(a) program. Agencies contacted by reporters have been asked for comment; the White House had not provided an immediate response to requests for comment at the time of reporting.

Ernst said: "Tax dollars designed to help small businesses must actually benefit all small businesses."

What Comes Next

If agencies comply with Ernst’s request, existing and pending 8(a) no-bid awards could be paused while audits proceed. Lawmakers, auditors and prosecutors will likely continue to examine whether program rules were followed, whether participants improperly acted as pass-through entities, and whether additional oversight or legislative changes are necessary to protect taxpayer funds and ensure fair competition.