A clip circulating on X features author Chris Rufo questioning the federal government’s use of contracting programs meant for socially and economically disadvantaged groups, arguing that they increasingly benefit communities that are already among the most successful in the United States.
In the video, Rufo points to firms led by Indian Americans as a prominent example. “It is crazy. We look through a lot of these contracts. These are supposed to be for socially disadvantaged or oppressed people.”
“But you have a firm, for example, that’s run almost exclusively by Indian Americans with PhDs that have millions of dollars in assets. To give you one small example, and you say, wait a minute, this is a group that has the highest education level, the highest income level, run by people who, by any measure, are part of the American elite now. Why are we giving them a contract advantage over other groups, and I hope that we see action, maybe not today or tomorrow, but I hope we see something by next week at the latest,” he emphasized.
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Rufo’s remarks have renewed attention on the 8(a) Business Development program, a federal contracting and training initiative administered by the U.S. Small Business Administration. Authorized under Sections 7(j)(10) and 8(a) of the Small Business Act, the program is designed to help small business owners who are classified as socially and economically disadvantaged gain a foothold in the federal marketplace.
According to the SBA, businesses admitted into the 8(a) program receive training, technical assistance, and access to contracting opportunities that are otherwise difficult to secure. The program does not guarantee contract awards, but it does provide a competitive advantage when bidding for federal work. Certification under the program lasts for a maximum of nine years, divided into a four year development stage and a five year transitional stage.
Indian Americans are eligible to receive contracts under the 8(a) program as part of the government’s broader definition of socially and economically disadvantaged groups. Once certified, businesses can pursue set aside and sole source federal contracts during the nine year eligibility window, giving them an edge over companies that do not qualify.
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So now the argument that is put forward that this framework no longer reflects present day economic realities. Indian Americans, as a demographic group, have the highest education levels and among the highest household incomes in the United States. Many firms benefiting from 8(a) certification are run by highly educated owners with substantial assets, prompting questions about whether they still meet the spirit of a program originally intended to uplift disadvantaged communities.
The U.S. Small Business Administration outlines strict eligibility requirements for participation, including limits on personal net worth, income, and total assets, as well as a requirement to demonstrate business viability. “To qualify for the 8(a) program, businesses must meet the following eligibility criteria:
- Be a small business
- Not have previously participated in the 8(a) program
- Be at least 51% owned and controlled by U.S. citizens who are socially and economically disadvantage
- Have a personal net worth of $850 thousand or less, adjusted gross income of $400 thousand or less, and assets totaling $6.5 million or less
- Demonstrate good character
- Demonstrate the potential for success such as having been in business for two years”
Despite these safeguards, Rufo and others contend that granting contract advantages to groups that now sit firmly within the American economic elite is indefensible, calling for swift policy action to reassess who should qualify for preferential access to federal contracts.