WASHINGOTN (KTUU) – Alaska Sen. Lisa Murkowski led a hearing Tuesday morning examining federal contracts that have played a significant role in Alaska’s economy — contracts now targeted by the Trump administration.
The hearing comes after Defense Secretary Pete Hegseth vowed to take a “sledgehammer” to the 8(a) contracting program, calling it “the oldest DEI program in the federal government.”
What’s at Stake for Alaska
The 8(a) Business Development Program is overseen by the Small Business Administration. It assists small businesses owned by socially and economically disadvantaged individuals or tribes.
Alaska Native corporations were created by the Alaska Native Claims Settlement Act in 1971 to manage tribal land and resources. Those corporations later gained access to the 8(a) program, which supporters say promotes economic self-determination for tribal communities.
The program has become critical to Alaska’s economy. The state describes its economic foundation as a “three-legged stool” supported by oil, federal spending, and industries like tourism and fishing.
Hegseth’s Threat
In a video posted to social media on Jan. 16, Hegseth announced an immediate review of the 8(a) program.
“We’re actually taking a sledgehammer to the oldest DEI 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.”
Hegseth alleged that many 8(a) firms “take a 10%, 20%, sometimes 50% fee off the top, and then pass the contract off to a giant consulting firm.” He called this practice “Beltway Bandits” and described the program as “a breeding ground for fraud.”
He ordered a “line-by-line review” of every small business sole-source 8(a) contract over $20 million.
“If a contract doesn’t make us more lethal, it’s gone,” Hegseth said. “We have no room in our budget for wasteful DEI contracts that don’t help us win wars.”
Alaska’s Response
Murkowski, the Alaska Republican who chairs the Senate Committee on Indian Affairs, scheduled Tuesday morning’s hearing in response. She is leading the session with Sen. Brian Schatz, a Hawaii Democrat who serves as vice chairman.
The hearing is titled “Economic Self-Determination in Action: Examining the Small Business Administration Native 8(a) Program.”
Two Alaska Native corporation leaders are testifying: Katherine Carlton, president of Chugach Alaska Corporation, and Polly Watson, vice president of operations for Bristol Bay Native Corporation.
Also testifying: Cherokee Nation Principal Chief Chuck Hoskin Jr. and Cariann Ah Loo, president of the Native Hawaiian Organizations Association.
Alaska’s other senator, Dan Sullivan, has defended the program while calling for reforms. Last December, he announced changes to allow 8(a) firms to compete for contracts before establishing physical offices in a state.
“This long-overdue fix opens the door for more of Alaska’s businesses—including disabled-veteran-owned firms, women-owned firms, and Alaska Native Corporations—to compete and deliver results for our federal government and for taxpayers,” Sullivan said.
A Long-Running Debate
The controversy over 8(a) contracts isn’t new for Alaska’s senior senator.
In 2011, Murkowski defended the program before the same committee: “My colleagues want to measure the Indian 8(a) program with a spreadsheet, but bean counters can’t measure self-sufficiency or innovation.”
The Alaska Native Claims Settlement Act was signed by President Richard Nixon in 1971. The late Sen. Ted Stevens, who championed the legislation, saved the pen Nixon used to sign the act.
The law created Native corporations to benefit tribal members who hold shares in the companies. Those corporations later gained advantages in federal 8(a) contracting, which supporters say fulfills Congress’s intent to promote tribal economic self-determination.
The hearing can be viewed here.
Editor’s note: This story will be updated throughout the day with testimony from Alaska Native corporation leaders and other witnesses.
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