Probe sought for no-bid ANC contracts

Reps. Tom Davis of Virginia and Henry Waxman of California today asked the Government Accountability Office to review the use of Alaska Native Corporations (ANCs) by agencies awarding sole-source small business contracts.

The congressmen also asked the departments of Defense, Homeland Security and State to turn over information about the number and value of large sole-source contracts awarded to ANCs.

ANCs are tribal corporations sent up in the 1970s as part of the Alaska Native Claims Settlement Act. These corporations can own numerous 8(a) small businesses and have additional benefits that other 8(a) companies do not. For example, there is no limit on the value of sole-source contracts that ANCs can win, while most 8(a) companies have a $3 million cap for sole-source service contracts.

Davis, Republican chairman of the House Government Reform Committee, and Waxman, the ranking Democrat on the panel, voiced their concern in letters to GAO and the departments of Defense, Homeland Security and State about the growing use of these contracts, which are awarded without competition.

"It appears that these contracts also may come at a cost to the federal taxpayer," they said.

Some of these contracts have been worth billions of dollars, such as the National Geospatial Intelligence Agency contract awarded to a joint venture of two ANCs, Chenega Corp. and Arctic Slope Regional Corp., which was worth $2.2 billion, according to the letters.

The congressmen also are questioning the use of large businesses as subcontractors on these contracts. The large companies that are providing the bulk of the work on these contracts "should be capable of obtaining federal contracts through the standard competitive process," according to the lawmakers.

The congressmen said their attention was drawn to the ANCs because of a growing number of media reports about the large contracts [See related story].