Indian American-owned businesses are increasingly utilising a federal initiative intended to support socially and economically disadvantaged small businesses, a Senate panel has been told.
During a hearing before the Senate Small Business and Entrepreneurship Committee, investigative journalist Luke Rosiak told senators that the Small Business Administration’s 8(a) programme, established in 1978, has shifted from its original goal of assisting Black Americans in overcoming historic discrimination.
Rosiak told senators that South Asian-owned businesses, particularly from India, now secure a substantial share of 8(a) contracts, while Black Americans receive only around 15 per cent.
The hearing, titled ‘Running Government Like a Small Business’, examined whether the programme continues to align with its original mission of addressing social and economic disadvantage.
Rosiak noted that Indian Americans, described as one of the wealthiest demographics in the US, dominate sectors such as information technology, which accounts for a large portion of federal procurement.
Allegations of Contract Misuse
Rosiak cited OCT Consulting LLC, an IT firm certified under the 8(a) programme. He stated that the government awarded 19 federal contracts worth $43 million to the company’s owner, Atul Kathuria, without competitive bidding.
Rosiak argued that, although 8(a) rules allow these arrangements, companies are using minority ownership mainly as a contracting tool instead of addressing disadvantage. He added that the programme’s structure, which lets larger firms receive subcontracts, could increase costs and weaken oversight, potentially enabling abuse.
The hearing revealed contrasting viewpoints among senators. Committee Chair Senator Joni Ernst stressed rooting out ‘waste, fraud, and abuse’ to ensure accountability for taxpayer funds.
Conversely, Democratic Ranking Member Senator Edward Markey defended the programme’s original intent, cautioning against dismantling minority-focused initiatives based on selective cases.
Other witnesses, including officials from the Government Accountability Office and the Project on Government Oversight, suggested improvements in oversight, data systems, and enforcement rather than eliminating the programme.
Rosiak highlighted that recent Supreme Court rulings limiting the use of race in federal programmes have prompted agencies to rely on subjective measures of ‘social disadvantage’, heightening the potential for misuse.
Ongoing litigation could force the SBA to revise 8(a) rules entirely.
The hearing underscores the ongoing debate over balancing minority-focused support with transparency and fairness in federal contracting.
Indian Americans remain a prominent and economically successful community in the US, particularly in technology, medicine, and entrepreneurship.
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