Pentagon’s 8(a) Review Highlights a Deeper Truth: Agency Action Alone Is Insufficient

Section 8(a) is a federal set-aside program that provides preferences to social and economically disadvantaged contractors. The Department of Defense announced that it will start scrutinizing abuses in the program—especially as it relates to ending race-based presumptions about eligibility. This internal policy change is welcome, but it is not enough because a future administration can simply reverse this reform. 

For nearly four decades, regulations implementing the Section 8(a) program have used an explicit racial presumption to determine who receives the preference. Individuals from certain racial and ethnic groups are automatically deemed “socially disadvantaged” and granted preferential access to billions of dollars in federal contracts, loans, and other opportunities. Everyone else is excluded or must pursue a burdensome and costly process to prove their disadvantage that many can never satisfy.

A system built on racial spoils invites abuse. It also rests on stereotypes that the Supreme Court has repeatedly rejected, most recently in Students for Fair Admissions v. Harvard.

Yet the unconstitutional framework remains embedded across the federal government. Multiple agencies, not just DOD, continue to distribute contracts and many other benefits using the race-based Section 8(a) rules last modified in the 1990s, which were unconstitutional even then.

The DOD now rejects this unconstitutional policy. But more is needed. Regulations and statutes need to be rewritten to make such needed reform more widespread and durable. Ideally, courts would invalidate the underlying regulation itself as unconstitutional, which would prevent a future administration from reviving it. That is why CIR sued on behalf of Matthew Schultheis and Young America’s Foundation.

Matthew Schultheis, founder of Revier Technologies, was denied access to federally provided investment capital for his Louisiana-based artificial intelligence startup because he did not belong to a government-preferred racial category.

Students affiliated with Young America’s Foundation seek to compete for paid cybersecurity fellowships at the Department of Homeland Security. Yet they are blocked from equal consideration because of their race.

These are not policy abstractions. They are real injuries imposed by a regulatory system that sorts Americans by skin color.

Agency reviews and recent DOD policy changes are laudable. The first step is to do no more harm. Yet such policy changes can be reversed quietly, diluted over time, or abandoned by the next administration. Regulatory and statutory repeal, supported by court orders requiring them, are necessary to provide more durable protections against constitutional violations.