William Hart, Gregory Rosen Publish Law360 Article on 8(a) Program Fraud Risks
Rogers Joseph O’Donnell, PC of counsel William G. Hart and shareholder Gregory P. Rosen published a Law360 article examining the growing fraud risks facing federal contractors under the Small Business Administration’s 8(a) program, as the Trump administration intensifies scrutiny of sole-source and set-aside contracting.
Hart and Rosen write that the administration’s push, which began with SBA Administrator Kelly Loeffler’s June 2025 audit announcement and expanded to reviews by the Treasury and Defense Departments, is centered on pass-through fraud: arrangements in which an 8(a) firm wins a set-aside or sole-source contract on the strength of its status and then passes the actual work to an ineligible subcontractor while collecting a management fee. They explain that such arrangements can expose both the 8(a) contractor and its subcontractor to False Claims Act liability under multiple theories, including implied certification and fraudulent inducement, with the statute’s presumed loss rule and treble damages provision creating what they describe as potentially existential financial risk.
The authors point to several recent enforcement actions as evidence that the focus is more than rhetorical, including multimillion-dollar settlements involving pass-through arrangements in the service-disabled, veteran-owned small business program and criminal prosecutions tied to 8(a) contractors. They also note the SBA’s own administrative crackdown, in which the agency demanded years of financial records from thousands of program participants and opened termination proceedings against hundreds of firms that failed to comply.
Hart and Rosen conclude that while the pass-through problem the government is targeting is real, the enforcement response has been broad enough that contractors acting in good faith should still expect increased audit and compliance costs, and they recommend firms strengthen documentation and compliance programs to manage the exposure.
Hart is a member of the firm’s White-Collar Criminal Defense and Government Contracts Practice Groups and previously served in the Fraud, Public Corruption and Civil Rights Section at the U.S. Attorney’s Office for the District of Columbia.
Rosen is a member of RJO’s White-Collar Criminal Defense and Government Contracts Practice Groups and a former federal prosecutor. He handles False Claims Act matters, government contracts fraud and complex financial and regulatory investigations.