Alaska natives defend set-aside program before Senate committee

Advocates say program succeeding, doesn't need to end

The Alaska Native Corporation small-business preference may not go away so quickly, as the Senate Select Committee on Indian Affairs investigates the issue today.

The committee is holding a hearing entitled, “Promise Fulfilled: The Role of the SBA 8(a) Program in Enhancing Economic Development in Indian Country.”


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Senators will hear from Joe Jordan, the Small Business Administration’s associate administrator of government contracting and business development, and SBA Deputy Inspector General Peter McClintock.

The committee will also hear from the National Congress of American Indians and the Alaska Federation Natives, followed by several owners of native businesses. They plan to present their case for the native 8(a) program’s achievements, saying such a program should not be eliminated because it's helping to grow businesses.

“Frustratingly, now that some native 8(a)s are finally succeeding, some would use that success to bar the door" to other native companies, said Lance Morgan, chairman of the Native American Contractors Association. “The growth of native 8(a) contracts indicates native participation in the 8(a) program is working.”

However, the unique set-aside for the corporations has come under scrutiny lately after investigative reports by the Senate Homeland Security and Governmental Affairs Committee’s Contracting Oversight Subcommittee.

Sen. Claire McCaskill (D-Mo.), the subcommittee's chairwoman, has said many small businesses are losing too many contracts to the corporations owned by Alaska native groups and the preference is no longer appropriate. In a 2009 investigation, McCaskill’s subcommittee found evidence of abuses in the system and also found that the companies often don’t employ Alaska natives to work and return only minimal benefits.

On March 30, she offered an amendment to a small business bill to end the corporations’ special allowances, such as unlimited noncompetitive contracts, particularly sole-source contracts through the government’s 8(a) small business contracting program.

McCaskill’s amendment would end special rules for Alaska Native Corporations but make them live by the usual rules of the federal government’s 8(a) program, which is designed to help small and disadvantaged businesses get government contracts. So far though, the Senate has not considered McCaskill's legislation.

Most 8(a) businesses have to meet strict requirements to qualify for the program and are limited by the size of a contract, but Alaska native-owned businesses are allowed to receive contracts of up to $20 million without competition.

 The SBA has proposed rules that would require agencies to justify a large sole-source contract set aside for an Alaska Native Corporation.

About the Author

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

Reader Comments

Fri, Apr 15, 2011 Alaska Native

Hey John...congrats! you now have "met" an Alaskan Native working for an ANC! I know for a fact that I am not the only native shareholder to say, I made it through my college education thanks to the opportunities my native corporation provides. I would not have been able to afford college had it not been for the scholarships and programs provided by my ANC. During college, I held an internship with my corporation, while receiving consecutive 4.0s, and once I graduated I was hired fulltime. There are 4 other shareholders, in just my department alone, that went through this same program. I can't say I'm not surprised that an ignorant man from Virginia has yet to meet ALASKA NATIVES working for an ALASKA NATIVE CORPORATION. Keep your arguements to things you know and less on what you don't. Saying comments that you have no idea of and which hold no truth is just plain ridiculous.

Fri, Apr 8, 2011 Frank Matt Tucson, AZ

I agree with John's comments! Even a blind man can see the issues and problems with how ANCs operate today! It is long overdue that ANCs adhere to the same rules & requirements as all other 8(a) companies now follow. I for one fully support Sen McCaskill's work and do hope she succeeds in her efforts!

Fri, Apr 8, 2011 John Virginia

The ANC program favors ANCs to the detriment of the rest of 8(a) companies. It is ridiculous to search opportunities in INPUT and find that there are 8(a) opportunities, many of which are significantly greater than $50m, obviously designated for ANCs. And when these contracts are awarded, it can then appear that an agency is meeting its 8(a) goals, yet the metrics have been skewed by such a large award, and all of the real 8(a) companies are left out. Also, we have worked with a number of ANCs, and even the President of the company is a typical caucasian American male. Wouldn't one think that at a minimum, the President of the company should be required to be an Alaskan Native? I have yet to meet an Alaskan Native doing any work with an ANC. It is long past time to level the playing field and fix this program by making ANCs adhere to the same requirements as all other 8(a) companies.

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