So and so would find some relative or friend who matches one or more of those categories and then claim they were the owner on paper to get the contract.
They don't even have to go to that much trouble. There's a whole ecosystem of 8(a) companies set up to take advantage of these contracts and then subcontract the work out to ineligible companies. They usually walk the halls to find the contract, handle some paperwork, provide the corporate history/legitimacy and take a bit off the top. And what you get is some tiny shop winning multi-million dollar contracts allocated for disadvantaged businesses, then turning around and farming out the work to Northrup-Grumman or SAIC or some other tradition, giant defense/government contractor (whom they usually have already worked out arrangements).
I spent a few years as a DoD contractor, and both companies I worked for were the bigger company on the contract, but the lead contractor what some small company that fit a specific category. I'll admit that I considered starting my own company,being a compensated disabled veteran, to get in the same action, but it didn't seem right and I wanted to get away from government contracting anyway.
Can confirm the same. There was always some one-person “company” who was the prime contractor simply because he was a disabled-Alaskan-native-owned-small-business, who did nothing but skim a little $$ and pass all communications back and forth between the government and the actual contractors who were doing all the work. Nice work if you can get it!
This is annoying but ultimately a small cost to work around bad legislation. The fix is to stop this sort off I'll thought out micro-managing and social engineering. There are better ways to make women and minorities more wealthy and powerful.
The 8(a) company, or similarly situated subcontractors, have to get at least 50% of the $, more than a bit off of the top. You can't sub more than half of the work to large businesses.
They don't even have to go to that much trouble. There's a whole ecosystem of 8(a) companies set up to take advantage of these contracts and then subcontract the work out to ineligible companies. They usually walk the halls to find the contract, handle some paperwork, provide the corporate history/legitimacy and take a bit off the top. And what you get is some tiny shop winning multi-million dollar contracts allocated for disadvantaged businesses, then turning around and farming out the work to Northrup-Grumman or SAIC or some other tradition, giant defense/government contractor (whom they usually have already worked out arrangements).