Defense Secretary Pete Hegseth on Jan. 16 lambasted a decades-old contracting program that provides business opportunities for small and disadvantaged businesses, calling it a breeding ground for fraud and disparaging it as a “DEI” effort.
But experts and an executive from a firm that uses such contracts say the level of fraud critics like Hegseth alleged has been greatly exaggerated.
Some fear the harsh rhetoric around the program signals a desire to eliminate it, which they say would hurt small businesses and the Pentagon’s ability to quickly respond to unfolding emergencies.
In a video posted on social media, Hegseth described the Small Business Administration’s 8(a) Business Development Program in harsh terms, connecting it with diversity programs he has strongly criticized and ordering a strict review.
“We’re actually taking a sledgehammer to the oldest DEI [diversity, equity and inclusion] program in the federal government,” Hegseth said. “A program few people outside of Washington have ever heard of, that I hadn’t heard of. It’s called the 8(a) program.”
I worked for a series of such companies when I contracted for the DoD. They basically get points towards winning contracts for being owned by veterans, women, and minorities. After like 3 years they lose all of those benefits, go out of business, and reform under a new configuration, hiring back the same set of contractors that worked for the first company. Minus sub-standard performers.
My observation is those companies are owned, controlled, and financed by white men with token minority leadership.
I never observed any fraud. One of the companies did have an open vacation policy which I guess might feel sketchy but it was mostly about not having to pay anyone out for vacation when they were done. I didn’t observe anyone taking excessive vacations (though we had folks who saved vacation days for years under different contracts to go back to India for a month so I’m not sure how that played out).
So not only does this not resolve any fraud, it barely counts as DEI. This is someone trying to kill something they don’t even understand is already part of their own stacked deck. I will be shocked if this actually happens because I think someone will pull him aside and explain the program is nothing but optics.
Caveat: this is just my experience with about 3 different contracting companies while working one job for about 5 years, which is a very narrow perspective of the system as a whole.
Tracks with my experiences too. Its such a stereotype that its practically the third part of military retirement: military pension, then civilian job pension, then contractor job getting paid to do almost nothing riding out retirement.
Edit: actually, fourth part. Getting approved 100% disability while civilian would be the third.
It helps to cut the middle man which yes is usually a white dude vet with a minority to up those points. But that means it’s doing what it’s intended. Now they are arguing literally that the small guys just go to the big guys so why not just have the big guys take over.
Idk about you but that’s just more concentrated wealth going to the same people. It is a shit idea from a shit person. He is a corporate shill. Kegsbreath.
