By John Shoraka – Chairman, GCP
Having served in government and worked alongside businesses across the federal contracting ecosystem, I have learned that procurement policy is rarely just about procurement. It is often a reflection of broader economic priorities and political objectives. In this opinion piece, I offer my perspective on how recent actions affecting small business programs fit into that larger context.
The federal government is the largest buyer of goods and services in the world. Executive agencies collectively spend hundreds of billions of dollars annually through highly regulated contracts. For decades, administrations of both parties recognized that opening pathways for underserved communities…minority-owned firms, economically disadvantaged businesses, women-owned, veteran-owned, HUBZone, and especially Tribal, Native Hawaiian Organizations and Alaska Native Corporation (ANC) entity-owned companies—into this marketplace was not just effective procurement policy, it was a powerful lever for economic development, generational wealth creation, and, ultimately, political influence.
That policy, and related statues, and regulations are now coming into sharp focus.
Building Participation: From Obama to the First Trump Term
During the Obama administration, when I served as Associate Administrator for Government Contracting and Business Development at the SBA, there was deliberate focus on expanding access to programs like the 8(a) Business Development Program, HUBZone, and others. For example, we required all Senior Executives in the Federal Government to be evaluated on small business goals as part of their annual performance reviews. We also established a Small Business Procurement Committee which met at the White House quarterly and required each agency to send their Deputy secretary or Administrator. The goal was straightforward: the federal marketplace should not be the exclusive domain of large, established contractors. Set-asides, sole-source authorities (particularly for entity-owned 8(a) firms), Mentor-Protégé Agreements, and joint ventures were tools to bring in firms from communities that had historically been locked out.
The first Trump administration largely maintained, and, in some cases, strengthened the small business goaling framework while pursuing reforms. During FY 2019, the federal government exceeded its statutory small business contracting goal, awarding about 26.5% of eligible contract dollars to small businesses. That same year the federal government met its Woman-owned small business goal. Furthermore, the SBA substantially revised the HUBZone program in 2019 and 2020 to simplify eligibility requirements and expand opportunities in qualifying rural areas. The through-line was recognition that these programs served dual purposes:
1. Economic — They channeled federal dollars into local communities through businesses that hire locally, build supply chains in distressed or rural areas, and create scalable enterprises.
2. Strategic — Successful contractors generate profits that stay in communities. They build balance sheets, bonding capacity, past performance, and networks. Over time, this creates generational wealth through business equity, family succession, and reinvestment. Economically empowered communities invest in themselves, schools, civic organizations, local leadership, and become more engaged in the political process.
When businesses from underserved communities win federal work, they don’t just grow revenue, they gain standing; they hire neighbors; and they contribute to local economies that influence state and congressional races. They become stakeholders with real skin in the game. Put differently, the cumulative impact of these programs goes far beyond individual owners of small businesses. That influence compounds.
This was never hidden. Policymakers understood that federal contracting was one of the most effective, scalable mechanisms available to broaden economic participation and prosperity without creating new entitlement programs.
The Current Shift: “Reform” in Name, Strangulation in Effect
Fast-forward to the current administration. We are witnessing a rapid, aggressive rollback of the very infrastructure that enabled this participation by historically excluded communities.
The SBA, along with the Department of Defense, have conducted sweeping reviews of the 8(a) program, demanding years of financial documentation from thousands of Participants. Each of the 8(a) Participants were forced individually to spend thousands of dollars and significant manpower to respond to data calls that were frankly unprecedented and unnecessary. Through various policy initiatives at executive agencies, coupled with loss of job protections for civil servants, the administration’s message was clear: the 8(a) Program is rife with fraud and should not be relied upon to meet agencies’ needs. The administration claimed that there was a “potential $100B” in fraud; to date, they have failed to identify and/or validate that claim.
Official statements frame these moves as “restoring integrity, ending abuse and pass-through schemes that flourished previously, removing firms that no longer qualify as economically disadvantaged, and prioritizing merit over identity-based preferences.” There is legitimate debate about federal contracting integrity, including the 8(a) Program, which has long faced criticism from various stakeholders regarding eligibility creep, concentration of sole-source awards, and instances of abuse. Cleaning up clear fraud and ensuring only truly eligible small and disadvantaged firms benefit is crucial.
But the breadth, speed, and framing tell a different story when viewed alongside who is being squeezed and who appears insulated from these changes to federal contracting.
Small and mid-sized firms that built their growth strategies around these programs, many serving as the economic backbone of specific communities, are facing sudden loss of access, contract disruptions, and compliance burdens that favor larger players with deeper legal and accounting resources. Meanwhile, public commentary and reporting continue to surface examples of large, politically connected contractors maintaining or expanding footprints with far less apparent scrutiny…the classic “friends and family” dynamic.
https://www.csmonitor.com/USA/Politics/2026/0605/donald-trump-presidency-private-wealth-ethics
This is not primarily about fraud, waste, and abuse in the neutral, good-government sense. It is about redirecting revenue flows and disrupting the economic ascent of communities that had begun converting federal contracting participation into durable wealth and political agency. The programs that once nurtured that ascent are being systematically narrowed or delegitimized in favor of Tammany Hall-style favoritism among elites.
The Intended Outcome
When the strategy becomes clear, the logic is consistent:
• Weaken the revenue engine for businesses rooted in underserved communities.
• Slow or reverse the accumulation of generational wealth and institutional capacity in those communities.
• Reduce their independent economic and political leverage over time.
• Reallocate opportunity and capital toward networks more aligned with the current administration.
Federal contracting is not a neutral procurement function in this frame. It is a high-stakes arena of political economy. Previous administrations used it to broaden the circle of participants and build new centers of gravity around the underserved communities and those with limited access. The current approach claims “reform” but is really shrinking that circle and recentering power.
Underserved communities participating in the federal marketplace were never just chasing contracts. They were building durable economic footing that translates into community influence and electoral relevance. Attacking the programs that facilitated that participation, while shielding or privileging other channels, achieves the downstream political objective without needing to say it outright.
What Practitioners and Communities Should Do
For firms still in or seeking entry to these programs, the immediate task is rigorous compliance: meticulous documentation for 8(a) annual reviews and more general FAR compliance, careful auditing of any internal DEI-related practices to align with the new Executive Order, diversification beyond sole reliance on set-asides, and strategic use of mentor-protégé and joint venture structures where still viable. Gov Contract Pros and similar advisors exist precisely to help navigate these shifting rules without losing eligibility or exposing the business to risk.
But firms and community leaders should also see the larger pattern. Understanding this administration’s strategy allows for clearer long-term positioning, whether that means deeper engagement in truly competitive, non-preference channels, coalition-building across affected groups, or advocating for reforms that genuinely strengthen integrity and competition rather than serving as cover for selective economic pressure.
The federal marketplace remains the biggest game in town. Who gets invited to play, under what rules, and with what degree of sustained access has always been about more than widgets and services. It has been about power: economic power that becomes political power.
The current policies and priorities represent a significant departure from normative practices; they risk creation of a permanent underclass of citizens who are permanently excluded from meaningful political participation. Is this the vision of an ever more perfect union intended by the founders on this, the 250th anniversary of American independence?
Respectfully, I think not.
John Shoraka is Chairman of Gov Contract Pros, LLC and former Associate Administrator for Government Contracting and Business Development at the U.S. Small Business Administration. The views expressed here are his own.
