Undercover video alleges $100 billion scam in federal 8(a) minority contracting program

An undercover video released by O’Keefe Media Group alleges that a Native–owned federal contractor used its minority status to funnel more than $100 million in no-bid government contracts to non-minority firms while performing little of the actual work.

The 12-minute video, posted on YouTube, Rumble, and X, features OMG founder James O’Keefe, in a wig and glasses, posing undercover as part of a fictitious cybersecurity firm called “Sev-Zero Solutions.” The sting targets ATI Government Solutions, a Fairfax, Virginia–based company certified under the Small Business Administration’s 8(a) Business Development Program.

The 8(a) program, created under Section 8(a) of the Small Business Act, is designed to help socially and economically disadvantaged businesses compete for federal work. The program allows qualified firms, including those owned by Native American tribes or individuals, to receive set-aside and sole-source (no-bid) contracts. The SBA estimates the 8(a) program encompasses over $100 billion in annual awards across all participants.

ATI Government Solutions is certified as 100% Native American–owned through its affiliation with the Salish & Kootenai Tribes of the Flathead Nation in Montana. The company provides IT, cybersecurity, and engineering services for agencies including the Department of War and the Department of Homeland Security. Federal data show ATI has received more than $100 million in awards since 2018, much of it through sole-source contracts.

In the undercover footage, O’Keefe and other OMG reporters met with ATI executives in Arlington, Virginia. The central figure in the recording is Melayne Cromwell, ATI’s Director of Contracts, who is seen describing how the company partners with larger, non-minority subcontractors to win set-aside contracts those firms could not otherwise access.

Cromwell is recorded explaining that ATI acts as a “pass-through” entity, keeping roughly 20% of the contract value while outsourcing up to 80% of the work to non-qualifying firms.

“We bid on it for them, they become our sub, and it’s an automatic win because of our government set-aside,” Cromwell says in the video. “You automatically will win that contract because you’re Native American status.” She also calls the pass-through structure “a great thing.”

Public records from USAspending.gov confirm that ATI’s contract volume has surged since entering the 8(a) program. Arrangements like these could be costing taxpayers billions annually, since much of the work is subcontracted at inflated rates. The group says it has additional footage from another ATI official describing a network of similar “shell” companies nationwide, to be released in a follow-up report soon.

Federal rules governing the 8(a) program explicitly prohibit such arrangements. The Federal Acquisition Regulation requires that prime contractors perform at least 50 percent of the work’s cost (excluding materials), and SBA regulations forbid using minority ownership as a mere front for non-qualifying firms.

No criminal or civil actions had been filed as of Oct. 20, but the video prompted calls for investigations by the SBA and War Department inspectors general. Similar cases in recent years have led to multimillion-dollar settlements and contractor debarments.

The OMG investigation marks the latest in a series of stings by O’Keefe’s organization aimed at exposing alleged corruption and misuse of federal programs.