Earlier today, Secretary of War Pete Hegseth released a video entitled “We are taking a sledgehammer to the oldest DEI program in the federal government—the 8(a) program”, announcing an immediate Department-wide review of the 8(a) contracting program as it operates within the Pentagon.
In the announcement, Hegseth described the 8(a) program, administered by the Small Business Administration, as a small business assistance initiative for firms owned by socially disadvantaged individuals or tribes. He said that while the program’s intent was originally “laudable,” it has, over time, become associated with race-based contracting and widespread abuse.
Hegseth pointed to recent findings by the Department of Justice, which he said exposed half a billion dollars in 8(a)-related fraud. He also stated that the Department of the Treasury identified another quarter billion dollars, with Treasury’s investigation still underway. He added that the Treasury, Justice Department, and the Small Business Administration are all actively investigating 8(a) contracts.
According to Hegseth, the Pentagon issues $100 million sole-source contracts to 8(a) firms on a frequent basis and is legally required to award nearly $100 billion per year in contracts to small businesses, including 8(a) firms. He emphasized that while small-business participation is important, the Department is not required to tolerate what he described as pass-through arrangements, where 8(a) firms retain significant fees while subcontracting work to large consulting companies.
Effective immediately, Hegseth ordered a line-by-line review of every sole-source 8(a) contract over $20 million, with smaller contracts also subject to review. He described the effort as a two-stage process. First, contracts that do not directly contribute to military lethality will be eliminated. Second, the Department will move to end pass-through contracting practices and ensure that small businesses receiving awards are performing the work themselves.
Hegseth stated that the review is not intended to harm legitimate small businesses, but rather to redirect spending toward strengthening the defense industrial base and ensuring contracts align with the Department’s core mission.
The full announcement can be viewed here:
