Winners and one possible loser

Small-business programs under Obama could benefit vets and women, but Alaska native corporations might suffer

Small businesses owned by veterans and women could be winners under the Obama administration.

But with a new Congress, Alaska Native Corporations (ANCs) are looking for a key ally and could see some of their advantages diminish.

During Barack Obama’s presidential campaign, the Democratic candidate said he would strengthen federal small-business programs that focus on women, service-disabled veterans and minority business-owners. He wants to offer them more contracting opportunities with the government to help them grow. To help with that, Obama said he would restore SBA’s budget and strengthen its clout in the government. Karen Mills, a principal in the private equity and venture capital industry since 1983, was nominated as SBA’s administrator.

In particular, the president-elect wants to boost opportunities for women business-owners. He said he would stand up the women-owned business contracting program. Despite years of neglect, SBA officials made efforts in the last two years to launch the program, but a recent regulatory proposal crushed any progress by upsetting some members of Congress and small-business advocates. SBA’s rule would have opened the set-aside program to a select few industries. Lawmakers vehemently objected to the rule and were ready to block it statutorily in an appropriations bill. SBA hasn’t implemented the rule.

Small-business observers also expect veterans to benefit more than some other set-aside groups. Warfighters returning from Iraq and Afghanistan will get a lot of attention from the government under Obama. Guy Timberlake, chief visionary and chief executive officer at the American Small Business Coalition, said the support for veterans could lead to the creation of a program on par with companies owned by ANCs.

Timberlake and others in the small-business community said ANCs are a small segment of government contractors yet they have a large advantage over other small businesses. But ANCs are losing a key ally on Capitol Hill as Sen. Ted Stevens (R-Alaska) didn’t return to the Senate this year after being defeated in his re-election bid.

Whatever the set-aside category, many small businesses teeter on the verge of collapse when the economy falters. Thom Rubel, practice director of government programs at Government Insights, said the government must develop ways to incubate businesses to help them grow. If it can do that, the government can expect some valuable savings. But he said it takes more than simply awarding a percentage of contract dollars to help small businesses.

Timberlake said small businesses can offer government much more than in the past because they are more sophisticated today. That leads to greater capacity to handle more work on large, complex contracts, which in the past were geared for large companies.

But some small-business executives are still skeptical about Obama’s promises.

“It’s an easy thing to say, ‘We support small businesses,’ ” said Daniel Carr, chief executive officer of Distributed Solutions. Small-business owners have listened to the importance of small businesses while federal dollars have gone elsewhere.

However, Carr added, “it’s in our nature to be optimistic. The entrepreneurial hat worn by small businesses requires that we see opportunity and hope around every corner.”

So, Carr is waiting to see what comes from Obama.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

Reader Comments

Fri, Sep 4, 2009 Fred Tucson AZ

I like how the defenders of the ANCs come up with all of these anecdotal and bumper stickers comments to defend their position with no hard facts to back up thier claims. The ANCs are no more small business than small business being large business, give me a break! I challenge the ANCs to show the American tax payer the facts! Supposedly the profits earned from these contracts are suppose to be reinvested back into the indigenous communities that these Native enterprises serve, to improve education, health and social services for thousands of people. I just do not see it and the GAO report (dated Sep 2007) did not see it either. So, let’s get the facts out and let them speak for themselves on what the ANCs are really all about!

Tue, Jan 20, 2009

The SBA 8(a) Business Development Program has proven especially effective in improving the economic status of impoverished American Indian, Alaska Native and Native Hawaiian communities.

Section 8(a) provides Native businesses, owned by whole communities and operated for the benefit of indigenous people, with opportunities to succeed in today's complex business environment. The profits earned from these contracts are reinvested back into the indigenous communities that these Native enterprises serve, to improve education, health and social services for thousands of people.
Any proposed financial limits on 8(a) contracts will have a particularly detrimental effect on indigenous communities. Unlike other SBA participants - traditionally businesses owned by only a few individuals - such restrictions would have a dramatic impact on Native businesses that support hundreds, often thousands, of members, many of whom are dependent on Native enterprises for jobs and benefits. American Indian, Alaska Native and Native Hawaiian enterprises combined receive less than 1 percent of all federal contracting so any proposed government contracting amendments aimed at this group exclusively will have very limited effect on achieving any goals of “reform”. The noble aspiration of cultivating self-reliant Native communities should not be lost in the name of corporate reform. In the final analysis, the obligation of any future Indian policy - to invite Native communities into the U.S. economy - will prove to be the most cost-effective and empowering way to relieve poverty and dependency.

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