- Details
- By Brian Edwards
- Native Contracting
The Small Business Administration has suspended tribally owned ATI Government Solutions from obtaining new federal contracts while the agency investigates allegations the company fraudulently used its tribal status to secure over $100 million in no-bid contracts.
The suspension of the Susanville Indian Rancheria-owned company, effective Oct. 21, also applies to three ATI executives and prevents the company from bidding on new federal contracts or receiving government assistance while the investigation continues, according to a notice on SAM.gov. Under the suspension, federal agencies cannot award new contracts to ATI or renew existing ones, and the company cannot serve as a subcontractor on contracts over $35,000 unless an agency head grants a written exception for compelling reasons.
SBA Administrator Kelley Loeffler used social media to announce the probe, which focuses on allegations that ATI operated as a pass-through entity, using its status as a tribally owned 8(a) firm to win sole-source contracts while subcontracting most of the work to other companies. Under federal law, 8(a) contractors must perform a specific percentage of work themselves rather than passing it to subcontractors.
The investigation follows the release of an undercover video by O'Keefe Media Group that captured ATI contract manager Melayne Cromwell discussing the company's subcontracting practices. Loeffler cited the video in announcing the investigation.
The Treasury Department announced that it suspended approximately $253 million in contracts with ATI pending the investigation. In a social media post, Treasury Secretary Scott Bessent said his department would cooperate with the SBA, inspectors general and enforcement partners, and refer the matter to the Department of Justice.
“Taxpayer dollars must be protected,” Bessent wrote on the X platform. “We will not tolerate schemes that try to game small business programs.”
In a statement dated Oct. 22, Susanville Indian Rancheria Tribal Chairman Arian Hart said the tribe is cooperating with the SBA and has launched an internal investigation. Hart said the tribe is committed to transparency and takes the allegations seriously.
“Integrity, accountability, and compliance are foundational to our tribal government and business operations,” Hart said in the statement.
In response to the allegations, the Native American Contractors Association expressed support for the SBA's enforcement efforts while defending the broader Native 8(a) program. NACA Executive Director Quinton Carroll said the program has proven effective at creating jobs and strengthening Native-owned businesses, often in remote rural areas.
“The Native 8(a) program is a proven model that creates jobs, drives economic opportunity, and strengthens Native-owned small businesses,” Carroll wrote in an email to Tribal Business News. The association emphasized that NACA and its members work to ensure compliance through training and strict adherence to policies aimed at preventing wrongdoing.
ATI Government Solutions was established in 2019 to provide financial opportunities for the Susanville Indian Rancheria through federal contracting. Tribal businesses receive enhanced benefits under the 8(a) program, including the ability to receive sole-source contracts without dollar limits. According to Washington Technology Washington Technology, the company reached the No. 1 position on the publication's 2024 Fast 50 rankings of the government market's fastest-growing small businesses.
The ATI investigation comes as the SBA conducts a comprehensive audit of the entire 8(a) program announced in July.
According to a briefing by law firm Holland & Knight, the audit covers a 15-year period and focuses on high-dollar and limited-competition contracts, with particular scrutiny on joint ventures and pass-through arrangements.
“The audit will target arrangements where the disadvantaged partner may have served as a nominal participant or where the structure was used to circumvent eligibility or competition requirements,” the briefing notes.
