Secretary of War Pete Hegseth announced in a strident post on X that he would be reviewing all contracts over $20 million awarded under Section 8A of the 1978 Small Businesses Act, which provides support and favorable contracting to companies run by “socially and economically disadvantaged” individuals, a category with a lengthy definition.
Hegseth claims that the preferential contracts enable fraud, where companies with the right demographic credentials can arbitrage that qualification to win contracts which they can profitably subcontract out, while pocketing the difference. “Effective immediately, I’m ordering a line-by-line review of every small business sole source 8A contract that is over $20 million.”
