8(A)s still a hit with ANCs, tribally owned companies

How we got the 8(a) numbers

The Top 25 8(a) list is complied using data from the Federal Procurement Data Center. Market research firm Federal Sources Inc. of McLean, Va., analyzed the data using 117 product services codes that Washington Technology editors chose as best representing information technology, systems integration and telecommunications work.

Agencies report contract obligations worth more than $25,000 to prime contractors. FSI used the product service codes to analyze this data and rank the companies. FSI also took the extra step of contacting companies to further verify their data.

The companies were ranked according to their total IT prime contracting dollars in fiscal 2004, not just their 8(a) dollars. Washington Technology believes this is the best way to judge the progress and success of 8(a) companies, because the program's goal is to help create companies that remain viable after graduating. However, the list does not include companies that had less than $1 million in 8(a) revenue in 2004.

The procurement center only reports agency spending with prime contractors, so the list does not reflect subcontracting revenue. Also, spending by intelligence agencies, the U.S. Postal Service, congressional agencies and judicial branches are not reported to the center, so the list does not reflect those expenditures.

Alaska Native Corporations and tribally owned companies increase their presence on the Top 25 8(a) list, with 10 such companies ranking among the most successful small businesses in the government market.

Washington Technology's annual list ranks companies that participate in the 8(a) program, which fosters the growth of minority-owned businesses through set-aside contracts and other procurement programs.

Companies on the list are ranked by their overall IT prime contracting revenue in fiscal 2004, but they must have a minimum of $1 million in 8(a) contracts.

Last year, eight companies owned either by Native American tribes or Alaska Native Corporations made the list.

ANC and tribally owned companies began appearing on the list several years ago, and their numbers have grown steadily since.

Four of the top five companies are either an ANC or tribally owned, including Chenega Corp. of Anchorage, Alaska, No. 1 for the second year. Chenega, which offers engineering and professional services, pulled in $138.7 million in IT revenue in 2004. Of that, $116.6 million was from 8(a) contracts.

The Top 25 list is compiled by Federal Sources Inc. of McLean, Va. FSI analyzed procurement data from the General Services Administration to create the rankings. The company is owned by the Washington Management Group, which is owned by Koniag Inc. of Anchorage. Koniag also owns Frontier Systems Integration LLC, No. 18 on the Top 25, with $19.4 million in IT revenue.

The success of ANCs and tribally owned companies has raised eyebrows in some quarters. Though all companies in the 8(a) program have advantages over other companies, such as set-aside and sole-source contracts and agency contracting goals, ANCs and tribally owned companies have those plus other advantages.

ANCs and tribally owned companies can receive a sole-source contract, which is awarded without competition, with no limit on its size. Other 8(a)s have a $3 million cap on these contracts.

Reps. Tom Davis (R-Va.), chairman of the House Government Reform Committee, and Henry Waxman (D-Calif.), ranking Democrat on the committee, asked in March that the Government Accountability Office investigate these contracting preferences. Results of the investigation are due this spring, and may be followed by Reform Committee hearings.

ANCs and tribally owned companies counter that their special status is justified to bring economic benefits to their communities and tribes, which have suffered chronically from high unemployment and other economy-related problems. Money from their IT businesses is funneled to their communities to improve the quality of life through activities such as building schools, establishing scholarships and creating jobs.

The Alaska Native Claims Settlement Act of 1971 created ANCs. Tribally owned companies belong to recognized Native American tribes in the lower 48 states.

Three tribally owned companies are on the Top 25 8(a) list this year:

  • S&K Technologies Inc. is No. 5, with $57.7 million in overall IT revenue. The Confederated Salish and Kootenai Tribes in Montana own S&K, which provides IT and aerospace services. It first appeared on the list in 2003.

  • Shu'dustsing Technologies LLC of Cedar City, Utah, made its debut this year at No. 22 with $13.2 million in IT revenue. The Cedar Band of the Paiutes founded the company in January 2003. Located on the tribe's reservation, it offers customer support, help desk, data processing, data storage, programming and analysis and other services.

  • Wyandotte NetTel of Wyandotte, Okla., returned to the list after an absence of several years, landing at No. 10 with $36.7 million in IT revenue. The company, owned by the Wyandotte Nation of Oklahoma, provides client-server and networking products and services.

Of course, not all the companies in the Top 25 are ANCs or tribally owned. Holding onto a top five spot for the second year is Paradigm Solutions Corp. of Rockville, Md., with $71.7 million in IT revenue. The company was No. 5 last year also.

Making the highest debut on the list is Military Personnel Services Corp. of Falls Church, Va., which landed at No. 8 with $39.6 million in IT revenue. The company provides consulting and other services in human resource and personnel management, program and budgeting, IT and facility management.

Another newcomer is Merlin Technical Services Inc. of Greenwood Village, Colo., which landed at No. 12 on the Top 25 list with $27.3 million in IT revenue. The company also holds the top spot on Washington Technology's Fast 50 list.

Merlin provides services related to enterprise architecture, information lifecycle management, information assurance, infrastructure and systems modernization.

Of the 25 companies on the list, 13 can be classified as IT services providers, five as engineering and professional services firms, four as consulting firms and three as value-added resellers.

Editor Nick Wakeman can be reached at nwakeman@postnewsweektech.com.

About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

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