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Congress has established a program (the section 8(a) program) that, despite having taken various forms over the years, has worked to benefit disadvantaged business entities and, by extension, the socioeconomically disadvantaged individuals who run them by setting aside and awarding to those entities opportunities to perform on certain designated public contracts. Occasionally, people either lie ex ante or fail to fulfill obligations ex post in order to fraudulently procure these section 8(a) contracts (i.e., they commit procurement fraud).

This fairly esoteric area of the law is disoriented by a circuit split over how to sentence such white-collar defendants (if convicted) in cases of affirmative action procurement fraud. Specifically, the circuit courts do not agree on how to calculate the amount of loss attributed to the fraud, the value of which may result in severe sentencing enhancements. At this point, the Third, Fourth, Fifth, Seventh, Ninth, and Eleventh Circuits have all chimed in, yet the issue on which they cannot seem to agree is whether a government contract, set aside for affirmative action purposes and awarded to a disadvantaged business entity, constitutes a “government benefit” for purposes of loss calculation.

This Essay posits that a section 8(a) public contract does constitute a government benefit when calculating loss and, in such cases, that the credits-against-loss rule should apply as well. Nominally, the circuits are split only on the first issue; however, that nomenclature is part of the reason this split persists. In actuality, the circuit-splitting issue comprises not one but two questions. Resolution will require searching for the answers with binoculars, not a telescope. This Essay attempts to assist in that search by revisiting the events that led to this split in the first place and weighing the merits of those courts’ decisions.



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