Key Takeaways
- •The hearing affirmed the Native 8(a) program's legitimacy and critical role in tribal economic self-determination, rejecting claims of it being a "fraud magnet" or DEI initiative.
- •Witnesses, including Katherine Carlton, detailed how 8(a) earnings are reinvested into Native communities for education, healthcare, and infrastructure, directly supporting self-sufficiency.
- •Senator Mullin (R-OK) and Chief Hoskin Jr. discussed how 37% of Cherokee Federal's net profit is legally mandated to fund tribal government programs and services.
- •Senators Murkowski (R-AK) and Schatz (D-HI) both emphasized that the 8(a) program is based on trust obligations, not DEI, and requires targeted oversight.
- •The committee aimed to establish a factual record to counter misinformation and ensure the Native 8(a) program's integrity and continued effectiveness for federal agencies and Native communities.
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Hearing Analysis
Overview
On February 10, 2026, the Senate Committee on Indian Affairs held an oversight hearing to examine the Small Business Administration (SBA) Native 8(a) program. The hearing sought to address recent criticisms of the program, including allegations that it serves as an illegitimate Diversity, Equity, and Inclusion (DEI) initiative and claims of widespread fraud. Chair Lisa Murkowski (R-AK) and Vice Chair Brian Schatz (D-HI) led the committee in a bipartisan defense of the program, emphasizing its role in fulfilling federal trust responsibilities and promoting economic self-determination for Alaska Native Corporations (ANCs), Indian tribes, and Native Hawaiian Organizations (NHOs).
The hearing opened with Chair Murkowski categorically rejecting the characterization of the 8(a) program as "fraud" or a "DEI program." She entered a letter from SBA Administrator Kelly Loeffler into the record confirming that the Native 8(a) program is not a DEI initiative. Murkowski argued that the program is grounded in the U.S. Constitution and the political relationship between the federal government and Native entities, rather than race. Vice Chair Schatz echoed these sentiments, noting that while allegations of waste and abuse should be investigated, they should not lead to a "blanket pause" on the program, which provides critical revenue for Native communities.
Key Testimony
Witness testimony focused heavily on the tangible community benefits funded by 8(a) contracting revenue. Chuck Hoskin Jr., Principal Chief of the Cherokee Nation, testified that Cherokee Federal serves more than 60 federal agencies and contributes significantly to the tribal general fund. Under Cherokee law, 37% of net income from tribal businesses must be reinvested into the community. Chief Hoskin reported that over the last decade, federal contracting has contributed at least $364 million to essential programs, including the largest tribally operated health system in the country, housing, and a Cherokee language immersion campus. Sen. Markwayne Mullin (R-OK) provided a personal anecdote illustrating this impact, describing how the Cherokee Nation quickly replaced a broken school bus for a small rural school district when local government funds were unavailable.
Policy Proposals
Katherine Carlton, President of Chugach Alaska Corporation and Policy Chair of the Native American Contractors Association (NACA), highlighted the program's role in Alaska. She noted that Chugach delivered $32.6 million in community and shareholder benefits in 2024 alone, supporting scholarships, cultural programs like the Nuuciq Spirit Camp, and infrastructure such as a housing facility in Valdez. Carlton also addressed the efficiency of the program, stating that sole-source 8(a) awards can be executed in 30 to 60 days, compared to 18 months for traditional procurements, providing the federal government with a nimble contracting tool.
Key Testimony
Polly Watson, Vice President of Operations for Bristol Bay Native Corporation (BBNC), shared her personal journey as a shareholder who benefited from 8(a)-funded scholarships and management training. She detailed how BBNC uses its revenue to provide mobile DMV services to remote villages where travel costs to urban centers are prohibitive. Cariann Ah Loo, President of the Native Hawaiian Organizations Association (NHOA), testified that NHO-owned firms directed more than $120 million back into the Native Hawaiian community between 2018 and 2024, supporting wildlife recovery, healthcare, and education.
Overview
A significant portion of the discussion centered on oversight and the "chilling effect" of recent SBA actions. Chief Hoskin expressed concern that reckless rhetoric and aggressive audits were causing contracting officers to question the integrity of Native firms, despite their proven performance. Witnesses and senators alike agreed that while oversight is necessary, it must be fact-based. Sen. Schatz pointed out that while the SBA’s current reporting requirements are "slender," Native organizations are often collecting more robust data than required and would welcome standardized reporting to demonstrate the program's value.
Policy Proposals
Regarding policy and regulation, the witnesses clarified the mechanics of "sole-source" and "no-bid" contracts, which are often misunderstood by critics. Ms. Watson explained that even sole-source awards require rigorous price negotiations, technical evaluations, and SBA approval. She also detailed the strict subcontracting limitations that ensure 8(a) firms perform the required percentage of work themselves. Sen. Schatz emphasized that federal agencies, particularly the Department of Defense, choose to work with 8(a) firms because they offer the best value and flexibility, not merely to fulfill a mandate.
Overview
The hearing concluded with a consensus that the Native 8(a) program is a vital economic engine that delivers mission-critical services to the federal government while simultaneously funding the social and cultural survival of Native peoples. Senators Murkowski and Schatz indicated that the committee would continue to monitor the SBA’s administration of the program to ensure it remains a transparent and effective tool for tribal self-sufficiency. No specific new legislation was introduced, but the committee signaled a strong intent to protect the program's statutory framework against administrative overreach or mischaracterization.
Transcript
[Gavel sounds.] Good morning. I call this oversight hearing to order. Today we will examine the Small Business Administration's Native 8(a) program and the role that it plays in economic self-determination of our Native communities. This isn't a new topic for oversight. We have regularly conducted oversight of this program, and that remains important because 8(a), in this Senator's view, is a success story. It's not a fraud, as some have mistakenly alleged, and quite honestly, that's terminology that I would just categorically reject. This program may not be well understood, which may be part of our challenge here. But it is important to note that it simultaneously provides benefits to the federal government and to Native communities all across our country. That's true in Alaska, that's true in Hawaii, and in most every state. As structured today, the 8(a) program leads to a more responsive and resilient supply base for the federal government. It delivers mission-critical work for civilian and defense agencies. And it promotes economic development in Native communities while helping to fulfill the federal trust responsibility. Now lately, we've seen some criticisms that 8(a) is an illegitimate DEI program. Also concerns over whether revenues and earnings are leading to sufficient community benefits. Now on this first question, I do have a letter from SBA Administrator Kelly Loeffler confirming that the Native SBA 8(a) program is not DEI, which I will enter into the record. As the committee with jurisdiction over tribal and Native affairs, these are matters that we must explore here with testimony from those that are involved in the program. As we engage on this, I think we should start by making just a few things clear. First, the United States has unique obligations to Indian tribes and Native people that are grounded in the United States Constitution, in our treaties, in our statutes, in our court decisions, and executive orders. And based on that, beginning in the 1980s, Congress chose to make Native entity-owned firms eligible for the 8(a) program. And that was not based on race, it was not based on DEI, but it was based on Congress's constitutional authority over Indian affairs and the long-standing federal trust responsibility to Native peoples. Second, the firms owned by tribes, Alaska Native Corporations, and Native Hawaiian Organizations participate in the 8(a) program under a different statutory framework than firms that are owned by individuals. But that too is deliberate. That's not an accident, that's deliberate. Congress set up this framework because Native entity-owned firms are accountable to entire Native communities. That's a different responsibility. They're accountable to entire Native communities, reinvesting their earnings in broader community priorities and advancing economic self-determination. Third point: Congress has reaffirmed and expanded the inclusion of Indian tribes, ANCs, and Native Hawaiian Organizations in the 8(a) program. And these were also deliberate decisions and remain the right decisions, in my view, so long as we maintain the program integrity and the transparency. Now some suggest that by restricting 8(a) eligibility, we're suddenly going to save a ton of taxpayer dollars. But in truth, it would actually cost the federal government a key contracting tool and further disadvantage Native peoples around the country, excluding them from any potential participation in federal procurement and the community benefits that they provide. And that's especially true in Alaska, where Congress took a different route. They did that as they settled the Aboriginal land claims. It was different than in the lower 48, but they transferred land and assets to corporations that are owned by Alaska Native people. That distinctive structure reflects Congress's recognition of the unique circumstances of Alaska Natives and supports their self-determination. Congress actually amended ANCSA, or the Alaska Native Claims Settlement Act, to clarify that ANCs are eligible to participate in 8(a) and that they were acting under their constitutional authorities, making access to federal procurement programs a key part of the settlement and Alaska Native economic development. When Congress passed ANCSA, one of the goals was to connect communities that were primarily reliant on subsistence hunting and fishing, essentially non-cash economies. But seeking to help advance them within the American business world. The 8(a) program has been pivotal to that, building up managerial leadership and business capacity in Alaska Native communities. Now I know that some colleagues and federal agencies are conducting reviews of the 8(a) program, including participation of Native-owned entities. And those reviews must be based on facts and in the law, ensuring that SBA and agencies are equipped to administer an effective program as Congress intended, while targeting any waste, fraud, and abuse. I think we all recognize that we don't want to see that within our system. So I'm pleased that today we're able to focus very keenly on some of these issues today. I'm looking forward to hearing from our witnesses who are involved in Native 8(a) contracting, including those who have traveled down from Alaska to testify before us. Thank you for that. And they will share how the 8(a) program advances economic self-determination and tribal self-sufficiency in a manner consistent with congressional intent that is good for Native peoples. So I now turn to the Vice Chair for his opening statement.
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