In Washington, when a government program comes under scrutiny, the conversation often jumps too quickly from “this needs oversight” to “this should be eliminated.” That instinct is now on display in the debate over the federal government’s 8(a) Business Development Program, a long-standing initiative designed to help small businesses owned by socially and economically disadvantaged individuals compete in federal contracting.
For many Black-owned businesses, 8(a) is often the primary pathway into federal contracting, providing access to capital, experience, and credibility that would otherwise remain out of reach in a system shaped by longstanding racial inequities. Yet even with this program, equal access to opportunity remains elusive. The U.S. Department of Labor reported in 2021 that, despite representing 24 percent of eligible businesses, minority-owned firms accounted for only 3 percent of all contract awards.
Critics argue the program is outdated, vulnerable to abuse, and legally fragile. Some have gone further, calling for its dismantling. But this debate is unfolding amid a broader political effort to roll back diversity, equity, and inclusion initiatives, particularly those that acknowledge race as a factor in unequal economic outcomes. In that context, enforcement risks being used not to strengthen the program, but to shrink it.
That contraction is already visible. The Small Business Administration has admitted only 65 companies to the 8(a) program in 2025, compared with more than 2,000 admissions over the previous four years. It also suspended more than 1,000 of roughly 4,300 active firms in January for noncompliance.
The real question is not whether 8(a) is flawless. It is whether policymakers will do the harder work of governing it effectively or use enforcement as a pretext for eliminating one of the few federal tools designed to expand opportunity for disadvantaged entrepreneurs.
The 8(a) program is not a permanent preference or a guaranteed pipeline of contracts. It is a time-limited business development initiative, typically lasting up to nine years, intended to help small businesses owned by socially and economically disadvantaged individuals build the capacity to compete in the federal marketplace. Participants receive contracting opportunities alongside business counseling, technical assistance, and mentoring. The goal is graduation, not dependency.
The program exists because Congress recognized that socially and economically disadvantaged businesses, including many Black-owned firms, face documented barriers to capital, bonding, and commercial networks. Federal contracting requires past performance, upfront financing, and institutional relationships that many entrepreneurs have historically been denied. 8(a) attempts to narrow that gap.
Yet labeling 8(a) as “DEI” distorts both its purpose and its results. Black-owned businesses still receive only about 1.5 percent of total federal contract dollars, a fraction of their share of the small business community and the population. Even with 8(a), the gains have been modest. If this is what critics call preferential treatment, it is a remarkably limited one.
The danger is that in the name of eliminating “DEI,” policymakers are dismantling one of the few structured entry points into federal contracting for disadvantaged small businesses without replacing it with anything stronger. That does not punish elites. It harms small firms that rely on federal contracts to build past performance, stabilize cash flow, and create jobs.
Shrinking the program will not produce a more competitive marketplace. It will concentrate federal contracting further among established incumbents, reduce supplier diversity, and weaken the resilience of federal supply chains. The result is not neutrality. It is consolidation, higher barriers to entry, and potentially higher costs for taxpayers.
There is no serious dispute that the program faces risks. Problems can arise when a small business functions primarily as a pass-through, when large contracts are awarded without competition, or when agencies fail to monitor performance. These issues deserve attention. But acknowledging risk is not the same as proving a program is beyond repair. Oversight bodies have consistently shown that targeted enforcement, better data, and risk-based supervision work.
The Department of Defense awarded more than $18 billion in contracts to 8(a) firms in 2024. A January memo indicates that the DoD is conducting an 8(a) review intended to eliminate what it describes as unconstitutional and non-merit-based DEI. Eliminating the program would require significant supply chain restructuring and would contradict Commerce Department findings emphasizing the importance of minority-owned businesses for supply chain resilience.
The choice facing policymakers is not between oversight and abandonment. It is between dismantling a flawed but necessary tool or reforming it to deliver better results. A reformed and well-enforced 8(a) program is not a special favor. It is a practical mechanism to expand competition and strengthen the small-business ecosystem. Scrapping it may be politically convenient. Fixing it and demanding that it do more is far more valuable.
Dumas is a Joint Center senior researcher.