Scott Bessent launches investigation into possible fraud with $9 billion in fed contracts

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President Trump has directed his administration to eliminate fraud and waste wherever it occurs, ensuring that each taxpayer dollar is spent as intended.

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.

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The Treasury Department announced Thursday an investigation into small-business government contracts worth about $9 billion and whether federal programs have been used fraudulently.

The department is probing to see if companies have misused preference-based contracting programs, including one initiative anchored by the Small Business Administration called the 8(a) business development program.

That program allows small businesses to apply for federal contracts with unique special benefits such as opportunities for companies to gain access to a mentorship program, connect with contract and compliance experts to help business leaders understand various regulations and a chance to qualify for federal surplus property on a priority basis.

Companies using the program must be at least 51% controlled by U.S. citizens who are economically and socially disadvantaged, as well as have a personal net worth of $850,000 or less, among other requirements.

Treasury officials, though, say that these programs have led to possible fraud and abuse by a host of firms. Officials allege that companies may have used pass-through arrangements with small businesses.

“Treasury will not tolerate fraudulent misuse of federal contracting programs,” Treasury Secretary Scott Bessent said. “These initiatives must benefit legitimate small businesses that deliver measurable value to the government and the public.”

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