Given the new year, I thought it would be helpful to provide a summary of recent events involving the Small Business Administration (“SBA”) and the SBA’s 8(a) Program.

On October 20, 2025, the “O’Keefe Media Group” published a recording of a meeting with individuals associated with ATI Government Solutions, LLC, an 8(a) company owned by the Susanville Indian Rancheria. The report alleged that ATI Government Solutions, LLC was serving as a “pass through” entity for 8(a) contracts. There was no actual evidence of wrongdoing included in the report. Immediately after, on October 21^st, the SBA suspended ATI Government Solutions, LLC, and three individuals associated with ATI Government Solutions from federal contracting. The stated basis in SAM.gov for the suspension was:

Preliminary ineligible based upon adequate evidence of conduct indicating a lack of business honesty or integrity, or a lack of business integrity, or regulation, statute, executive order or other legal authority, pending completion of an investigation and/or legal proceedings; or based upon initiation of proceedings to determine final ineligibility based upon regulation, statute, executive order or other legal authority or a lack of business integrity or a preponderance of the evidence of any other cause of a serious and compelling nature that it affects present responsibility.

On November 7, 2025, the SBA suspended seven additional entities that also have the Susanville Indian Rancheria as an ultimately owner. The stated reason in SAM.gov for these suspensions is identical to the reason given for the suspension of ATI Government Solutions, LLC.

On November 12, 2025, Senator Joni Ernst, the Chair of the Senate Committee on Small Business and Entrepreneurship, sent letters to SBA Administrator Kelly Loeffler and the SBA’s OIG asking for both more oversight of the 8(a) Program and information related to entity-owned 8(a) firms.

On November 17, 2025, Senator Ernst then introduced legislation to halt all 8(a) sole source awards until an audit is completed of the program.

On December 5, 2025, the SBA began sending data requests to all 8(a) companies asking for a variety of financial and contract information. The original deadline for responding was January 5, 2026. That deadline was extended to January 19, 2026.

On December 8, 2025, Senator Ernst issued twenty-two letters to various federal agencies alleging that certain Alaska Native Corporations, Tribes, and Native Hawaiian Organizations had violated various SBA regulations, primarily regarding the prohibition on having two active 8(a) companies with the same primary NAICS code. Based on news reports, those entities had not actually violated any SBA regulations, and Senator Ernst’s letters were based on misunderstandings regarding the law and/or facts.

On December 10, 2025, the Senate Committee on Small Business and Entrepreneurship held a hearing on the 8(a) Program and SBA oversight. This hearing was conducted by Senator. Ernst. Senator Ernst attacked SBA set aside loans and the 8(a) program, stating, “Government contracting should be based on eligibility and merit, not skin color.” The Ranking Member, Senator Markey, opposed Senator Ernst, focusing on claims of fraud and abuse within the Trump Administration and highlighting the politicization and orchestrated attack on the 8(a) Program. Two other senators spoke, Senator Hirono and Senator Husted. Senator Hirono highlighted her “serious concern” regarding Senator Ernst’s recent letter sent to over twenty administrations and agencies. Senator Husted presented a practical example of how legal set asides operate for a material supplier and asked the committee to focus on making it illegal.

Before introducing the witnesses, Senator Ernst read a statement by Senator Sullivan into the record: “Senator Sullivan has been a fierce advocate for Alaskans and a partner in working to ensure fraud is eradicated from Federal Contracting.”

The four witnesses for the hearing were:

• • Luke Rosiak, Investigative Reporter, The Daily Wire
  • Dylan Hedtler-Gaudette, Vice President of Policy and Government Affairs, Project on Government Oversight (POGO)
  • John Hart, Chief Executive Officer, Open the Books
  • Courtney LaFountain, Acting Director, Financial Markets and Community Investment, Government Accountability Office (GAO)

In the question and answer portion of the hearing, Senator Ernst focused her questioning on oversight failures, transparency, and fraud risks within federal small-business programs. She pressed Rosiak on whether existing oversight mechanisms prevent abuse in set-aside contracting, and he responded that oversight has consistently failed, noting structural vulnerabilities such as passthroughs and partnerships that mask true control. Senator Ernst then turned to Hart to clarify whether Congress intended omissions in federal spending databases; Hart emphasized that full transparency was the clear legislative intent. Responding to Senator Hirono, Senator Ernst defended her call for a temporary pause of the 8(a) program as an audit measure rather than an effort to eliminate it, stating that recent investigative findings warranted review. Senator Ernst later questioned Hedtler on whether fraud in small-business programs should be pursued, and he agreed that strong oversight is necessary.

Senator Ernst’s key issues:

• • Oversight failures and inherent vulnerabilities in set-aside contracting
  • Transparency and reporting requirements
  • Justification for a temporary pause to conduct an audit of 8(a)
  • The need to pursue documented fraud in small-business programs
  • Examples of waste or misuse within existing federal systems

Senator Markey approached the Q&A from a contrasting perspective, questioning the firing of a respected Inspector General, the hiring of SBA Administrator Loeffler, and Administrator Loeffler’s recent call for a full-scale audit on 8(a), and Senator Ernst’s critiques directed at the 8(a) program. He challenged Rosiak directly, noting prior public statements and suggesting ideological bias, while Rosiak responded by reiterating concerns about structural weaknesses in SBA contracting procurement, and highlighting a recent court ruling regarding race and government assistance, and the injunction issued in the Ultima case.

Senator Markey and Senator Hedtler then discussed how 8(a) Program and other small-business programs contribute to competition and resilience in the federal industrial base. Senator Markey also expressed concerns about the political motivation behind recent SBA oversight actions, with Senator Hedtler noting that independent inspectors general—not politically aligned initiatives—are best suited for such reviews. Senator Markey questioned LaFountain on GAO’s review of DOGE’s compliance with the law. Senator Markey later underscored the lack of transparency surrounding DOGE personnel and activities, arguing that meaningful oversight and trust in DOGE findings cannot occur without basic information about the office.

Senator Markey’s key issues:

• • Credibility concerns regarding criticism of 8(a)
  • Role of set-asides in competition and industrial-base resilience
  • Political motivations behind recent SBA actions
  • Audit standards and GAO’s review of DOGE
  • Influence of major contractors on executive-branch decision-making
  • Insufficient transparency surrounding DOGE’s operations

Senator Dan Sullivan of Alaska and Senators Mazie Hirono, Edward Markey, and Maria Cantwell have responded to the SBA audit and Senator Ernst’s assertions regarding the 8(a) Program.

Senator Sullivan submitted a statement in response to a December 10, 2025, hearing before the Senate Committee on Small Business and Entrepreneurship on the 8(a) Program and SBA oversight. In that statement, Senator Sullivan highlighted the benefits afforded by the 8(a) Program to the federal government, including prior statements from Department of Defense officials regarding the speed and efficacy of the 8(a) Program. He stated:

The 8(a) Program is a voluntary contracting tool established under Section 8(a) of the Small Business Act. Its participants are among the nation’s most capable, mission-driven small businesses. Most deliver specialized, high-quality performance; provide pricing transparency; and save the government significant time and money, with lower administrative costs than large contractors and the avoidance of months, if not years, of procurement protests and delays.

Senator Sullivan also noted that Alaska Native and Native American participation in the 8(a) Program is not “DEI” or race-based:

Recently, I retired after 30 years in the U.S. Marine Corps, where I saw firsthand the destructive DEI policies the Biden Administration imposed on our military that had nothing to do with warfighting. I am a full supporter of Secretary Hegseth’s focus on getting rid of DEI in the ranks. However, let me also address a misconception: Native American participation in the 8(a) Program is not a DEI initiative or race-based affirmative action, and, as noted above, has repeatedly made our military more lethal. It is grounded in Congress’s explicit recognition of the political and legal status of American Indians, Alaska Natives, and Native Hawaiians – a status reaffirmed repeatedly by federal statute, the Courts, and the SBA itself, when Administrator Loeffler recently stated in writing to me that Executive Order 14151 does not apply to Native programs. This is about self-determination, not race.

On December 22, 2025, Senators Mazie Hirono, Edward Markey, and Maria Cantwell sent a letter to SBA Administrator Loeffler expressing concern over the SBA’s audit request, including the short timeline given to respond, the uncertainty over how the audit will be conducted, and how confidential and proprietary information will be protected. The Senators also expressed support for the 8(a) Program, noting that:

Congress created the 8(a) Business Development Program to provide training, technical assistance, and federal contracting opportunities for socially and economically disadvantaged businesses in the United States. Today, the program plays an important role in making sure these companies have the opportunity to do business with federal agencies, which not only supports those businesses and the communities in which they are located—creating jobs, for example— but also pays dividends for the agencies. Within the Department of Defense, for example, there is evidence to show that these businesses play a role in strengthening the industrial base by diversifying the supply chain. The same can be said for other agencies.

We have not seen a response from the SBA to this letter from Senators Hirono, Markey, and Cantwell.

Although the SBA has extended the deadline to respond to its data request to January 19^th, there remain significant questions about the scope of information that is being sought and how the SBA will utilize the information. There are also concerns that firms that fail to meet the January 19^th deadline will be subject to adverse action by the SBA, including potential removal from the 8(a) Program. The SBA has indicated that 8(a) companies that fail to respond may be removed from the 8(a) Program and/or subject to further investigation or other remedial actions.

Given the current environment, and the swift action taken by the SBA against ATI Government Solutions based on news reports, the pending information request from the SBA poses a significant issue for 8(a) companies.

This article summarizes aspects of the law and opinions that are solely those of the authors. This article does not constitute legal advice. For legal advice regarding your situation, you should contact an attorney.