Two Senate Republicans are standing in the way of efforts to eliminate a major DEI program that gives no-bid federal contracts to “socially disadvantaged” groups, a letter obtained by The Daily Wire shows.
Alaska Sens. Lisa Murkowski and Dan Sullivan wrote to agencies saying that a race-based program that removes competition for federal contracts for racial minorities “has reflected conservative, market-based principles by empowering small businesses to compete, grow, and succeed.” They said a Republican request that agencies review past contracts for “potential fraud” was “premature” and “unsupported by established facts.”
The Trump administration’s Small Business Administration moved to rein in the federal minority contracting program, known as 8(a), after a black businessman bribed a USAID official for half a billion dollars in contracts — a bribe the official could make good on only because contracts to minorities can be handed out at will instead of based on a showing of best value.
In October, James O’Keefe’s Citizen Journalism Foundation captured officials from a white-led, but ostensibly Native American contractor, bragging about how they got a $100 million contract using minority preference and simply found someone else to do the actual work for a small portion of that. Follow-up reporting featured members of the Native American tribe bemoaning that outsiders were abusing the tribe’s name to enrich themselves, while tribe members lived in poverty.
Alaska Natives get even more preferential treatment than black, Hispanic, and Asian Americans, allowing them to run multibillion-dollar defense contractor companies while getting benefits initially designed for small, disadvantaged firms.
In December, Sen. Joni Ernst (R-IA), chair of the Senate Small Business Committee, which has jurisdiction over the program, wrote to agencies asking them to “immediately pause all 8(a) sole-source contracting” and “examine all 8(a) set-aside contracts awarded by your agency since FY 20 for any violation of laws and regulations,” noting that the Biden administration raised the goal for minority contracts to 15%.
For years, inquiries have flagged fraud and abuse in such arrangements, but Alaska Republicans have used their disproportionate power in the Senate to make the topic off-limits. The now-deceased Ted Stevens was an Alaska Republican who chaired the Senate’s Appropriations Committee for years, and Murkowski now sits on the committee.
Before the DEI craze captured Democrats, it wasn’t partisan to point out waste and abuse. In 2010, Sen. Claire McCaskill (D-MO) found abuse similar to what was highlighted by O’Keefe. But Murkowski “immediately sprung into action, lodging objections” to McCaskill’s effort to reform the program. McCaskill folded, but said, “Reform in this area is going to happen. It’s not a matter of if, but a matter of when.”
In the time since, little has changed. In 2011, The Washington Post reported that a D.C. lawyer named Paralee White had used the Alaska program to land more than $500 million in military contracts and pay her family members lavish salaries. The Post noted, “Significantly for White, the subsidiaries set up by the corporations to receive contracts did not have to operate in Alaska or even be run by natives. They just had to be 51 percent owned by Alaska Natives, and they could hire nonnative subcontractors to do much of the work.”
In another case, a Bethesda, Maryland, man was paid $15 million to run an Alaskan government contractor for three years, while Alaska Natives received a total of $682,000 in dividends in 2009, or $305 each. The company won a contract to make military uniforms, which it manufactured in Puerto Rico instead of Alaska.
Sullivan and Murkowski did not publicize their letters to federal agencies, which goes against Republican orthodoxy when it comes to DEI and fraud and waste. A spokesman for Murkowski, Joseph Plesha, did not respond when The Daily Wire asked about the letter.
The inquiry asked: “Do you think the SBA and agencies have done a sufficient job rooting out abuse? If not, what are some examples that you’ve uncovered through your oversight? Do you support 8(a) for all minorities or only Alaskan natives?”
It also asked whether the type of Alaska Native Corporation that Murkowski holds up as a success includes Bowhead, virtually all of whose executives are white men. Bowhead is technically an arm of an Alaskan tribe, but it is headquartered in the D.C. suburbs, and its family of high-tech defense contractors looks and operates like Northrop Grumman or Lockheed Martin — but without having to compete with them on price.
A spokeswoman for Sen. Sullivan, Amanda Coyne, also did not respond to a Daily Wire inquiry requesting data showing that such firms were actually staffed by Alaska Natives.
The letter said the 8(a) program “reduces administrative burden, shortens acquisition timelines, and avoids the delays and litigation risks that often accompany large-scale procurements. Further, as two Senators who care about the readiness of our military, we consistently hear from top Pentagon officials that the 8(a) Program provides flexibility and timeliness in procuring weapons systems that strengthen our country.”
The reason that some government officials like using 8(a) contracting is that they do not have to bother with competing for the work, a process designed to get the highest quality and lowest cost. Instead, they can simply choose who they want to give it to. At times, that includes the implicit understanding that the supposedly disadvantaged firm will subcontract much of the work to a traditional firm.
The 8(a) program is also facing court challenges, particularly after recent Supreme Court decisions made it likely that elements of it are unconstitutional. Multiple injunctions have been put in place by judges, and a lawsuit by lawyers from the Center for Individual Rights and the Wisconsin Institute for Life and Liberty has recently been filed on behalf of white people who were left out in the cold.
Dan Lennington, the director of the Wisconsin group’s Equality Under the Law Project, told The Daily Wire, “There is simply no question that the 8(a) program has been the source of significant waste, fraud, and abuse. The program was designed for ‘economically disadvantaged’ small business owners, yet our clients have reported that these limits are not enforced and easily evaded, meaning that high net-worth individuals often scoop up preferences and sole-source contracts.”
“Moreover, the Section 8(a) program has been tainted with unconstitutional racial preferences, including racial preferences for ‘Alaska Natives,’ which Senators Murkowski and Sullivan undoubtedly support. Federal law defines this category based on ‘blood,’ ‘bloodlines,’ and ‘minimum blood quantum,’ all of which constitute unconstitutional racial categorizations. SBA should vigorously enforce the President’s Executive Orders, which require all agencies to eliminate racial preferences, including those remaining in Section 8(a),” he continued.
Murkowski and Sullivan’s letter read:
Fraud, waste, and abuse have no place in federal programs, and any participant who violates the law should be held fully accountable. However, we write to express serious concern with recent, unsubstantiated attacks on the Small Business Administration’s (SBA) 8(a) Business Development Program and the request that federal agencies halt all 8(a) sole-source awards absent verified findings of wrongdoing.
On December 8, 2025, the Chair of the Senate Committee on Small Business and Entrepreneurship sent letters to 22 federal agencies urging a pause on future 8(a) sole-source awards and a review of prior awards based on allegations of “potential fraud.” These requests are premature, unsupported by established facts, and risk significant harm to federal missions and thousands of compliant small businesses that lawfully participate in this program. Broad, sensationalized allegations leveled before the completion of any investigation amount to a presumption of guilt and undermine fundamental principles of due process.
For more than 40 years, the 8(a) Program, authorized under Section 8(a) of the Small Business Act, has been one of the federal government’s most effective tools for promoting entrepreneurship and economic mobility for disadvantaged communities. Participating firms routinely deliver high-quality, specialized services, achieve strong Contractor Performance Assessment Reporting System (CPARS) performance ratings, and provide agencies with cost-effective, timely procurement options. The program reduces administrative burden, shortens acquisition timelines, and avoids the delays and litigation risks that often accompany large-scale procurements. Further, as two Senators who care about the readiness of our military, we consistently hear from top Pentagon officials that the 8(a) Program provides flexibility and timeliness in procuring weapons systems that strengthen our country.
We fully support targeted, evidence-based oversight that identifies and removes bad actors. We cannot support sweeping actions that jeopardize thousands of legitimate businesses, many of which perform mission-critical work for your agency and others across the federal government.
Accordingly, we urge you to continue utilizing the 8(a) Program consistent with existing law and regulation, while allowing any appropriate reviews to proceed in an orderly and fact-driven manner. For decades, this program has reflected conservative, market-based principles by empowering small businesses to compete, grow, and succeed, rather than expanding government dependence on bureaucracy.
Editor’s note: Luke Rosiak testified to the Senate Committee on Small Business about 8(a) contract abuse.
