The federal government is reviewing a business program that brings contracting opportunities to Alaska Native corporations and tribes.
U.S. Secretary of Defense Pete Hegseth said in a video posted on X last week that his department will review the 8(a) Business Development Program. The program falls under the federal Small Business Administration and supports businesses owned by socially disadvantaged individuals or tribal entities, including Alaska Native corporations.
Hegseth said in the video that the program promotes diversity, equity, and inclusion framework and race-based contracting.
“We are taking a sledgehammer to the oldest DEI program in the federal government,” Hegseth said. “Our goal is to spend your money to build our defense industrial base with businesses, large and small, that share our mission.”
Quinton Carroll, the executive director of the Native American Contractors Association, originally from Utqiaġvik, said that Native participation in the program is not a diversity, equity and inclusion initiative.
“It is grounded in the unique political and legal status of tribal nations under U.S. law and fulfills longstanding federal trust and treaty obligations to tribes, Alaska Native Corporations and Native Hawaiian Organizations,” Carroll said.
Tribal participation in the program
Alaska Native Corporations rely heavily on federal contracts, which they often secure through the 8(a) program.
In 2021, corporations received more than $11 billion from federal contracts, which were their primary source of revenue, according to data from the Federal Reserve Bank of Minneapolis. More than a half of that revenue came through the 8(a) program, and the majority of those contracts were with the Department of Defense, according to that research.
Christopher Slottee, an attorney who works with Alaska Native villages, regional corporations and tribal governments, said that makes the Pentagon’s review of the program “a significant concern” for tribes and corporations.
“They often rely on those contracts to generate the revenue that lets them provide the benefits to their shareholders and tribal members,” he said.
Slottee said that tribal entities are subject to the same standards, reviews and compliance requirements as everyone else, but they do have a few advantages in the program.
Slottee said tribal entities, unlike individuals, don’t have to prove their social disadvantage. They can also have multiple companies in the program, while individuals can only have one. Plus, tribal entities have significantly higher limits for certain awards, he said.
Slottee said a government agency also might want to contract with an Alaska Native organization because they often have more experience than some of the traditional small businesses. And there are treaty obligations to fulfill, he added.
“There is a general, government-wide encouragement for agencies to contract with entities owned by tribes and ANCs, as part of the government's responsibility to Alaska Natives and Native Americans,” he said.
The DoD review of the program
Hegseth ordered a line-by-line review of 8(a) contracts that are over $20 million in value. He said in a memorandum to the Pentagon leadership that the department would get rid of contracts that don’t make the country’s military more lethal.
“We have no room in our budget for wasteful DEI contracts that don't help us win wars,” he said in the social media video.
Carroll, with the Native American Contractors Association, said that Native federal contractors have been partners of the Department of Defense, working to strengthen readiness and the military industrial base.
Hegseth also said the department would make sure that the businesses with contracts were actually doing the work. He claimed that small businesses often receive a contract, take a fee and then pass the job on to a larger firm that’s not eligible for the program.
In June, the Small Business Administration ordered an audit of the 8(a) program following a fraud investigation. The Treasury Department has also been looking into potential misuse of the program.
Carroll said Native contractors support the elimination of fraud and waste within the program.
“It is critical that oversight efforts preserve a program that has proven its value — strengthening national security, reinforcing the defense industrial base, and supporting economic growth in Native and surrounding communities,” Carroll said.
Other threats to the program
The 8(a) program has faced recent scrutiny from other directions as well.
President Trump signed an executive order in April directing the rewriting of federal contracting regulations. Slottee, the attorney, said the revision has been completed, but it’s not clear yet how the changes will affect tribal entities.
He said that there is more focus now on the use of larger contracts, which can be harder for smaller corporations and tribes to access.
“It's going to take a little bit for folks to actually see the kind of on-the-ground downstream impact, but we definitely anticipate seeing that in the course of 2026,” Slottee said.
Earlier this month, the Small Business Administration issued an announcement that, among other things, described a massive reduction in how many applications were approved for the program.
“The Trump SBA accepted just 65 new 8(a) firms into the program last year – compared to over 2,100 who were accepted during the Biden Administration,” it said.
Slottee said that the many Native-owned businesses felt that reduction.
“There is a concern that ANCs and tribes will have to start looking for alternatives,” he said. “If the SBA is not going to be approving new 8(a) applications, even though they should be under the rule established by Congress, that's going to be a downstream impact on ANCs and tribes.”
