Alaska Native set-asides to undergo review

The House Small Business Committee intends to examine the role of Alaska Native Corporations in the Small Business Administration’s 8(a) contract set-aside program after allegations of fraud were raised.

The SBA inspector general's auditors found managers of two ANCs were not native Alaskans. However, the managers secured millions of dollars from government contracts set aside for the ANCs, according to the IG's report from last August.

The 8(a) program aims to help small businesses owned by socially and economically disadvantaged people compete in the federal procurement market with set-aside contracts. ANCs are among those eligible for the program. Generally, sole-source 8(a) contracts are capped at $5.5 million. However, ANCs can receive sole-source government contracts of any value.

In the alleged fraud, the IG said two ANCs violated the terms of their agreements with SBA to join the 8(a) program. By doing so, the companies kept SBA officials at bay, preventing them from checking on their companies’ ownership status, the report states.

The committee, chaired by Rep. Nydia Velázquez (D-N.Y.), said Jan. 28 that wants to check on SBA’s oversight of the program to stop further attempts at fraud. The committee said it also plans to follow up on regulations concerning the Historically Underutilized Business Zone program. Last year, the Government Accountability Office revealed alleged scams by companies to gain HUBZone eligibility. GAO then set up several fake HUBZone companies to prove SBA’s lack of oversight.

“The committee will examine the SBA’s contracting and business development to ensure that the agency’s efforts are meeting the needs of small businesses,” according to the committee’s priority list.

The panel also said it wants to examine recent GAO award protest decisions regarding small business set-asides and the effects of various acquisition regulatory changes on small firms.

About the Author

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

Reader Comments

Thu, Feb 26, 2009

I want to thank Washington Technology for continuing to investigate ANC's. We are one of the small businesses who have recently challenged ANC's with GAO, OHA and SBA. Although we understand we are fighting an uphill battle our goal is to get the word out about how ANC's continue to receive a disproportionate amount of federal dollars compared to other small businesses who attempt compete against them. This is especially true in the area of Telecommunication contracts with the Air Force. I suggest you check on the Air Force contracting center at HQ 38th ENGINEERING INSTALLATION GROUP (AFMC) at Tinker Air Force Base. They have been awarding Base Telecom Service (BTS) contracts to ANC's over 75% of the time. Something is going on! Can it be ANC's are the only contractors who can perform these types of contracts? Something has to be done to level the playing field and the SBA officials responsible for oversight of this abused program seem unable to fairly referee the game.

Wed, Feb 25, 2009 Bob Strini VA

I have personal experience with losing my intellectual property and award to an ANC because the contracting office was unable to establish a valid small business set-aside. The results forced me to compete with my own prototype and only win back 15% of the work I pioneered. The bottom line argument was ANC provided a no protest solution to incompetencies by the contracting agency. Government off the hook, original small business contractor suffers.

Mon, Feb 9, 2009

This has become a convenient way for fraudulent companies to operate. This must be investigated and the frauds brouht to justice.

Sun, Feb 1, 2009 Fred Matt AZ

A top to bottom review of Alaska Native Corporations is very long overdue! The SBA inspector general's auditors finding managers of ANCs not being native Alaskans is nothing new. The problems with ANCs is just the tip of the iceberg. It is well documentmented that the SBA has been very lax when dealing with ANCs and the 8(a) program.

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