U.S. Secretary of War Pete Hegseth announced plans to “sledgehammer” the 8(a) Program, a federal contracting program aimed at assisting socially and economically disadvantaged small business owners, calling it “the oldest DEI program in the federal government.”
Established in 1978, the 8(a) program is run by the U.S. Small Business Administration (SBA), a federal agency, to provide eligible small businesses with access to contracting opportunities in the federal marketplace, as well as training and technical assistance designed to strengthen their ability to compete effectively. Among the criteria for eligibility is a requirement for the small business to be majority owned “by U.S. citizens who are socially and economically disadvantaged.”
In a social media post announcing plans to review the program, Hegseth called the program’s initiative to provide opportunities for small businesses “a laudable goal,” he claimed that over time, the 8(a) program “has morphed into swamp code words for DEI, race-based contracting.”
Hegseth added that “in many, many instances,” the businesses benefiting from the program don’t actually perform the contracted work, but instead take a fee and subsequently “pass the contract off to a giant consulting firm, commonly known as Beltway Bandits,” claiming that the program is “a breeding ground for fraud.”
The announcement marks the latest in a series of actions by the Trump administration over the past year targeting programs and firms supporting programs and policies related to Diversity, Equity and Inclusion, starting with an Executive Order signed by Trump after taking office eliminating DEI preferencing in federal contracting, and required contractors to affirm that they “will not engage in illegal discrimination, including illegal DEI.”
More recently, as part of an initiative to “expose fraud, waste, and abuse,” the SBA ordered more than 4,300 Program 8(a) firms to provide three years of financial records as part of a full-scale audit of the program.
As part of his new initiative, Hegseth said that he is ordering “a line-by-line review of every small-business, sole-source 8(a) contract that is over $20 million,” in addition to examining all smaller contracts as well, stating that “if a contract doesn’t make us more lethal, it’s gone. We have no room in our budget for wasteful DEI contracts that don’t help us win wars,” and making sure that “every small business getting a contract is the one actually doing the work.”
Hegseth added:
“Our goal is to spend your money to build our defense industrial base with businesses large and small that share our mission not to line the pockets of beltway fraudsters, or to advance the agenda of DEI apologists. Only lethality, and we’re going to look at every single contract.”
