The U.S. Department of the Treasury has launched a department-wide audit to investigate possible fraud within its contracting programs, reviewing contracts and task orders totaling about $9 billion across the agency and its bureaus. The review will focus on preference-based contracting programs, including the Small Business Administration’s 8(a) Business Development Program, which are designed to give eligible businesses better access to federal contracts.
This action comes after Treasury previously suspended and terminated all contracts with ATI Government Solutions amid allegations of fraud involving more than $253 million in contract awards.
Treasury officials said the investigation is part of an effort under President Trump’s administration to detect and prevent misuse of taxpayer funds. Concerns have been raised that certain contracting preferences may have allowed large companies to use small businesses as intermediaries, or “pass-throughs,” retaining only fees for limited participation while subcontracting most work elsewhere. Most of the contracts now under review were awarded during the Biden administration’s equity in procurement initiative.
“President Trump has directed his administration to eliminate fraud and waste wherever it occurs, ensuring that each taxpayer dollar is spent as intended,” said Treasury Secretary Scott Bessent. “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.”
Kelly Loeffler, Administrator of the U.S. Small Business Administration, stated: “During the Biden Administration, federal contracting set-aside programs proliferated without scrutiny or oversight – which is why the SBA launched a full audit of the 8(a) Business Development Program earlier this year to examine contracts across every agency. This Administration will not tolerate DEI-based contracting and abuse that compromises opportunity for legitimate and eligible small businesses. I am grateful to Secretary Bessent for his commitment to rooting out fraud at the Department of the Treasury and for taking major steps to help SBA stop the rampant waste of taxpayer dollars.”
To strengthen oversight, Treasury acquisition staff have been told to require detailed staffing plans and monthly workforce performance reports for all service contracts going forward. The aim is to improve detection of non-performance or pass-through arrangements that could signal potential fraud.
