A shocking new undercover investigation has revealed widespread abuse within the federal government’s 8(a) contracting program, exposing how companies exploit minority-owned business status to win lucrative federal contracts — then quietly outsource most of the work to noncompliant firms.
Hidden-camera footage obtained by O’Keefe Media Group shows senior executives openly describing how easy it is to game the system. One official explained that his firm acted as a “pass-through,” using its “Native-owned” designation to win bids reserved for socially and economically disadvantaged small businesses. “They do all the work,” he said of the subcontractors. “I just sit back, collect my percentage, and they do the work.”
The 8(a) Business Development Program, overseen by the U.S. Small Business Administration (SBA), was designed to help disadvantaged entrepreneurs compete in the federal marketplace and grow their operations. But the new findings suggest the system has become riddled with loopholes and manipulation, funneling hundreds of millions of taxpayer dollars to corporations that merely pretend to meet the eligibility rules.
The exposé is part of a months-long probe led by investigative journalist James O’Keefe, who said the recordings expose systemic corruption that has gone largely unchecked. “This isn’t one bad actor — it’s a structural scam,” O’Keefe said. “The 8(a) program has turned into a hundred-billion-dollar shell game where politically connected firms profit while real small businesses are left behind.”
Following publication of the report, the SBA confirmed it has launched an internal review into possible misconduct within the 8(a) system. Lawmakers have also begun calling for congressional oversight hearings to ensure accountability. O’Keefe said additional footage will be released soon, revealing how the exploitation of minority contracting rules has drained funds away from the very communities the program was intended to uplift.
In 2022 for example, the SBA distributed approximately $19.7 billion through the program.