How Hegseth's "sledgehammer" video could change control of the U.S. Senate

The 2026 midterms run through Alaska, and Alaska Native Corporations are most under scrutiny in the "line-by-line" review

Just before the long weekend—that long weekend where 8(a) participants rushed to submit their data-call responses—Secretary of War Pete Hegseth posted a video committing to take a “sledgehammer to the oldest DEI program in the Federal government.” He was referring to the 8(a) program. That’s even though the 8(a) program is no longer a DEI program nor even all that old.

The most intriguing part of the video, though, was its timing. Secretary Hegseth published the video just days after former U.S. Representative Mary Peltola, a Democrat from Alaska, announced her run for the Senate. Peltola’s announcement pushed incumbent Dan Sullivan’s seat from “Safe Republican” into “Lean” territory. It created a path for control of the U.S. Senate in the 2026 midterms to go through Alaska.

And no companies receive more assistance from the 8(a) program than those in Alaska. Alaska Native Corporations win the most 8(a) contract dollars, and they win the largest 8(a) contracts. If the “sledgehammer” is wielded in the way Secretary Hegseth suggested—concentrating on large, sole-source contracts—Alaskan companies become the overwhelming target.

It’s now entirely plausible that the 8(a) program, though just 4% of Federal contract spending, could become a pivotal issue in a pivotal political race. That’s already part of the discussion. Bret Weinstein introduced Joe Rogan listeners to the 8(a) program in February last year. He observed on X that Hegseth’s video would “likely help Democrats win back the Senate.”

The reason for Weinstein’s prediction gets back to the first point: The 8(a) program isn’t DEI. Not anymore.

Mostly for ANCs, Tribes, and NHOs, plus veterans

The idea of a fast-track contracting method is older than SBA itself. What has changed is which firms can receive the contracts.

In 1942, when the Smaller War Plants Corporation was the precursor to SBA, the agency would find specific small-business manufacturers to supply the military. Those manufacturers could then receive direct, sole-source contracts through the SWPC. I have a favorite fun fact about the SWPC program: The small-business program was headed by pharmaceutical magnate Robert Wood Johnson. His family founded Johnson & Johnson and now owns the New York Jets.

Outside of wartime, though, the direct-contract program waned. The SBA was founded in 1953, but it didn’t use the program at all. The race riots of the late 1960s caused SBA to rediscover the authority. In 1967, the Johnson Administration brushed off the direct-contract authority to encourage Black entrepreneurship. Then Congress formalized the 8(a) program in 1978. It’s far from the oldest DEI program—that crown probably goes to FDR’s 1941 edict to end discrimination in the military.

But take a look at who the program most benefits today. It’s not Black business owners, or even minority-owned firms in general. It’s ANCs, Indian tribes, Native Hawaiian Organizations, and veterans. Those four categories together receive over 80% of the military’s 8(a) dollars:

Today, the 8(a) program is first and foremost a fast-track contracting method where Alaska Native Corporations, Indian Tribes, and Native Hawaiian Organizations can win contracts the fastest. After that, it’s veterans.

Outside of those four groups, Secretary Hegseth’s department spends only $2.5 billion with minority-owned contractors through the 8(a) program. That’s just 0.5% of the military’s budget. Put another way, people spent more on Labubu in 2025 than the Department spent with (non-veteran) minority-owned 8(a) firms.

Where the sledgehammer will land

Secretary Hegseth sounded most concerned with 8(a) firms acting as “brokers” for “giant consulting firms.” To address that, he ordered a line-by-line review of 8(a) sole-source contracts over $20 million.

Guess which companies have those contracts: It’s mostly Alaskan companies. Over the past two years, the military has awarded 207 8(a) sole-source contracts over $20 million. Alaska Native Corporations have over half of those, 104. Indian tribe-owned and NHO-owned firms have the other half.

Less than 10 percent of those $20-million-plus contracts are for consulting. That’s consistent with the concentration of the 8(a) program in general. Consulting isn’t a big part of the program. The top three industries in the program are construction, computer systems design, and facilities support. Consulting doesn’t crack the top three. So reviewing the contracts that involve giant consulting firms isn’t going to be hard.

Plus, the fact that Secretary Hegseth put consulting firms under the microscope likely means that big consulting firms will be increasingly wary of partnering with 8(a) firms. Consulting will become an even smaller part of the program.

What this talk of “brokers” misses, though, is the value that the 8(a) program adds in terms of speed and innovation. On her Substack, Holly MathNerd wrote a wonderful and comprehensive response to Secretary Hegseth’s video. The website 8A Facts goes even deeper into the value of the program. I can’t do the analyses justice, so just go read Holly’s piece and peruse 8aFacts.org. The most persuasive point I found in Holly’s piece is that 98% of the Department’s sole-source contracts go not to 8(a) firms, but to primes like Raytheon and Boeing.

An Open Letter to Sec. Hegseth

The point I would add to 8A Facts and Holly MathNerd is that the sledgehammer’s force is not equally distributed. We’ve already seen the outsized effect on Alaskan companies. Another group with much to lose is white male-owned firms.

White men lose because SBA stopped applying racial preferences in 2023. Now, white men have exactly the same process to get 8(a) certification as other businesses. They must establish social disadvantage using a narrative that describes instances of discrimination. The discrimination could be the result of disability, religion, or a rural upbringing. Under the new process, white men have benefited to an enormous degree. Since 2023, the number of non-minority, male-owned 8(a) firms has jumped over 50%. Everyone else’s participation is virtually unchanged.

If I were a white man in the 8(a) program, I would be unusually dismayed by the Secretary’s actions. Only recently have white men had a fair chance of admission. They have just started to gain a foothold, but actually winning contracts takes more time. But now the Secretary has pulled the rug out from under them.

What contractors under scrutiny can do now

Secretary Hegseth did not provide a timeline for when the sledgehammer would strike. That makes it even more curious why his department published the video the same week as Peltola’s announcement instead of in, say, mid-November. But, while we await details about the review, there are a few things 8(a) companies can do now.

First, check whether you are on the $20-million sole-source list. I know that the Secretary said that they would review “everything smaller than that too.” But, if all contracts were undergoing the same scrutiny, there would be no reason to pinpoint a specific dollar amount. So we have to assume that the $20 million-plus contracts will undergo a special review.

Second, know your contracts’ NAICS codes. This is important not only for determining whether it is classified as consulting. It also determines what subcontracting pass-through limits apply to your contract, or if the nonmanufacturer rule applies. The nonmanufacturer rule is one of the more complicated rules in government contracting, as I wrote a few months back. If you have a supply or manufacturing NAICS, examine the application of the rule and whether a waiver was issued.

The nonmanufacturer rule puts additional regulations on small-business resellers that large businesses don't face

And, third, catalog your subcontractors—which you probably did during the data call—and apply the similarly situated-entity rule. That rule allows for unlimited subcontracting. There is nothing that prohibits an entity-owned firm from winning a large sole-source contract and then subcontracting entirely to another 8(a) firm. Secretary Hegseth and other critics might call that a “pass-through.” But it’s legal. If that’s a problem, Congress wrote the rule and can limit it.

Congress wrote these rules so that the military can move fast. Alaska Native companies—more than anyone else—have brought that speed. Now, Secretary Hegseth’s sledgehammer threatens that advantage. His stated purpose is to end a DEI program. But the 8(a) program as DEI doesn’t exist anymore. Whether the program should continue to exist at all may end up in the hands of voters, especially those in Alaska.

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With 20 years of Federal legal experience, Sam Le counsels small businesses through government contracting matters, including bid protests, contract compliance, small business certifications, and procurement disputes. His website is www.samlelaw.com.

This article is for informational purposes only and does not constitute legal advice.