The U.S. Small Business Administration (SBA) 8(a) Business Development Program has long been a critical entry point for small and disadvantaged businesses entering federal contracts, particularly in defense.
In 2026, that landscape is shifting. Policy changes aimed at increasing competition are putting pressure on incumbent 8(a) firms, while compliance expectations around security, performance, and ownership are rising.
Dig deeper below to understand why contractors that rely on 8(a) awards to fund operations or new requirements such as Cybersecurity Maturity Model Certification (CMMC) should reassess their strategy now.
The 8(a) Program is a nine-year business development program administered by SBA. It is designed to help socially, and economically disadvantaged small businesses compete in the federal marketplace through set asides and sole source contract opportunities.
The 8(a) Program plays an outsized role in defense contracting. Of the 35 new 8(a) opportunities posted so far for 2026, 21 are Department of Defense (DoD) (also known as Department of War) related. Many small defense firms rely on these awards to establish past performance, fund growth, and absorb rising costs tied to cybersecurity, supply chain security, and compliance.
Historically, many 8(a) contracts followed a “once 8(a), always 8(a)” model. Contracts originally awarded under the program often remained restricted to 8(a) participants for follow on awards, limiting competition and providing stability for incumbents.
That reliance is now a risk factor. Increased competition and tighter oversight mean fewer predictable paths to recompete contracts that were once considered protected.
DoD is increasing scrutiny of certain 8(a) awards. Secretary of War Pete Hegseth has ordered a review of sole source 8(a) contracts, with particular attention on awards valued above $20 million.
Most standard 8(a) sole source contracts fall well below this threshold. However, tribal entities, Alaska Native Corporations, and Native Hawaiian Organizations operate under different affiliation and management rules that allow them to receive sole source 8(a) awards at significantly higher dollar values.
As a result, the review is expected to focus primarily on these organizations and their portfolios of large sole source contracts. While this action does not change 8(a) eligibility requirements today, it signals heightened oversight and potential future policy shifts affecting how high value 8(a) awards are justified, reviewed, and competed.“The 8(a) program remains a cornerstone for growing and developing small business participation in defense acquisition, but recent compliance challenges and heightened scrutiny have highlighted the need for transparency and agility in how these contracts are awarded,” said Andrew Lotwin, ISI Senior Vice President, Federal.
The current administration is aiming to move away from the “once 8(a), always 8(a)” approach. Follow on contracts that were previously restricted to8(a) firms may instead be competed under other small business set aside programs, including HUBZone, SDVOSB, and WOSB.
Additional changes that contractors should be watching include:
The result is a more crowded and demanding competitive environment, with less tolerance for complacency or weak differentiation.
As of December 2025, there were approximately 4,300 active 8(a) contractors. According to SBA’s website, in January 2026, more than 1,000 firms were suspended for failing to submit documentation requested by the SBA. Additionally, the Trump administration accepted far fewer businesses into the program compared to the previous administration. From 2021-2024, the 8(a) program accepted on average 525 new businesses per year. In 2025, only 65 new companies were admitted into the program.
The message is clear. Fewer companies will be admitted into the program and will face more competition than previous 8(a) participants.
Contractors that depend on 8(a) awards should take proactive steps to remain competitive:
For defense contractors, this also means aligning compliance investments like CMMC with a realistic assessment of future contract access.
ISI works with government contractors navigating regulatory change, increased competition, and rising compliance costs. From market positioning to readiness planning, we help firms adapt before disruption becomes loss.
The SBA 8(a) Business Development Program is designed to help socially, and economically disadvantaged small businesses compete for federal contracts. To qualify, a business must be small under SBA size standards, at least 51 percent owned and controlled by eligible individuals, and demonstrate good character and potential for success. The program provides access to set aside and sole source contract opportunities, as well as business development support, making it a common entry point for companies new to government contracting.
Defense contractors that rely on 8(a) awards face increased competition and reduced certainty around recompetes, particularly for Department of Defense contracts. With many firms using 8(a)revenue to fund operations or compliance investments like CMMC, these changes increase financial and strategic risk. Enhanced scrutiny of CPARS, ownership structures, and security related requirements means defense focused 8(a)contractors must be more proactive in maintaining eligibility and differentiation.