In a candid video that was posted on January 16, 2026, Secretary of War Pete Hegseth announced a major crackdown on the SBA’s 8(A) Business Development program. He said cracking down on this DEI program was essential to building the “most lethal fighting force” and erradicating fraud.
Additionally, he accused many participants of acting as shells, charging 10-50% fees before passing work to large “Beltway bandit” consulting firms, while the Pentagon awarded ~$100 million in no-bid contracts daily. Explaining the new policy, he ordered an immediate line-by-line review of all 8(A) sole-source contracts over $20M.
Starting his comments, the Secretary of War began, “When President Trump appointed me as your Secretary of War, I made you a series of promises. I promised that every single one of your taxpayer dollars would go toward one thing and one thing only, building the most lethal fighting force on the planet,” adding, “I promised we would gut the corruptive, unconstitutional, non-merit-based DEI programs that have weakened our military and distracted us from our primary mission.”
Referring to his other goals, Secretary of War Hegseth noted, “I promised we would hunt down the waste, the fraud, and the abuse that have run rampant in this department for decades, and to instead redirect that money to President Trump’s America First priorities.”
“Well, today we are once again taking action on these promises. We’re actually taking a sledgehammer to the oldest DEI program in the federal government…It’s called the 8(A) program… 8(A) refers to the Small Business Administration’s program to assist ‘small disadvantaged businesses owned by a socially disadvantaged individual or tribe,'” the former Fox News host then went on to explain.
Describing the corruption linked to 8(A), Hegseth stated, “Over the 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, they don’t even do work.”
Digging into the details, Hegseth revealed, “They take a 10%, 20%, or sometimes 50% fee off the top, and then pass the contract off to a giant consulting firm, commonly known as the beltway bandits. For decades, this program, 8(A), has been a breeding ground for fraud, and this administration is finally doing something about it.
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Still not done, he pointed out, “At the Pentagon, $100 million in sole-source contracts go out the door to these 8(A)firms almost every day. $100 million sole-source contracts go out our door to these 8(A) firms almost every day without any competition or opportunity for anyone else to bid.”
He continued, “The Department of War is required by law to do almost $100 billion worth of contracts per year with small businesses, including 8(A) firms… We’re not doing this anymore. So effective immediately, I’m ordering a line by line review of every small business sole source.”
Laying out the solution, he added, “[Any] 8(A) contract that is over $20 million, and we’ll look at everything smaller than that, too. The Department of War has the biggest chunk of 8(A), spending 10 times more than any other agency. So our cleanup is going to be 10 times tougher.”
Watch the clip here:
Concluding his comments, he noted, “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.”
Featured image from embedded video