Sandgren and top-ranked John Isner were the only seeded Americans in the field. Isner will play Sam Groth, who faced match point and rallied past American qualifier Austin Krajicek 6-7 (3), 7-6 (2), 6-3. Groth had 23 aces and 13 double faults.
The Americans lost five of the six overall singles matches on Tuesday and the Australians won three.
Sixth-seeded Lukas Lacko of Slovakia beat American Reilly Opelka 7-6 (7), 6-4. Australian qualifier Matthew Ebden beat two-time Newport champion Rajeev Ram 6-1, 6-4. Australian Akira Santillan, a 20-year-old, won his first ATP main-draw match on an ace in beating American wild card Michael Mmoh 6-1, 6-2.