The Small Business Administration's crackdown on Washington's oldest DEI program, otherwise known as the 8(a) program for "socially disadvantaged" businesses, which has largely amounted to a major vector for fraud, pass-through schemes, and artificially inflated contract costs, has expanded to the Department of War.
Secretary of War Pete Hegseth revealed late Friday on X that his team is "taking a sledgehammer to THE OLDEST DEI program in federal government…a program few people outside of Washington have ever heard about! It is called the 8(a) program."
"Providing these small businesses with opportunities is a laudable goal but over decades as it happens the 8(a) program has morphed into swamp code words for DEI race based contracting. And here's the worst part – in many, many instances these socially disadvantaged businesses don't even do the work!" Hegseth said, adding, "They take a 10%, 20% sometimes 50 percent fee off the top and then pass the contract to giant consulting firms commonly known as Beltway Bandits. For decades this is what they've been doing…for years now. This program, 8(a) has been a breeding ground for fraud. And this administration is finally doing something about it."
Hegseth revealed that the DoW will begin an audit of every small-business sole-source contract over $20 million. He noted that the DoW accounts for the largest share of 8(a) spending by far, roughly 10 times that of any other agency. As a result, the cleanup, he said, will be more complex but will still accomplish the mission because "We have no room in our budget for wasteful DEI contracts that don't help us win wars. Period. Full stop. Second, we're doing away with these pass-through schemes."
Late last year, journalist James O'Keefe blew the lid off 8(a), DC's best-kept secret. O'Keefe went undercover and captured video of an individual linked to ATI Government Solutions bragging about keeping $65 million of a $100 million contract while subcontracting out the work.
Then O'Keefe's reporting was picked up by Peter Schweizer, president of the Government Accountability Institute and the investigative journalist who broke the Clinton Cash corruption story, who correctly called months ago about how to end the 8(a) waste, fraud, and abuse once and for all:
Congress needs to investigate the program and subpoena ALL contractors suspected of fraud
Every agency that has 8(a) contracts needs to audit those contracts (start with the Pentagon!
The rules need to be rewritten to get rid of DEI focus, level the playing field, and close the "pass-through" loophole
Related and excellent reporting by RealClear Investigations' Benjamin Weingarten:
More here:
Ending the swamp's corruption will transform business around the DC-VA-MD area and provide new opportunities for legitimate small and medium-sized businesses based on merit and cost, rather than DEI-driven corruption.
We'll end with Peter Schweizer's lead researcher, Seamus Bruner, who recently told Morning Wire that the 8(a) corruption his team uncovered was just the tip of the iceberg and that "the Pentagon is where a lot of these billions will be hiding out."
What's happening is a major, urgent reset of the federal procurement landscape that needs to happen across every agency.
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