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By Nick Wakeman

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Nick Wakeman

Alaska Native Corporations prepare for day of reckoning

You know you’re ready for a political fight when a group of competitors form an association to burnish their image.

That’s what several Alaska Native Corporations and American Indian tribes have done. Pressure is building to reform the contracting rules that govern companies that tribes and ANCs own. The Senate Homeland Security and Governmental Affairs Committee’s ad hoc Contracting Oversight Subcommittee has scheduled a hearing for July 16 to examine potential abuses in awarding and managing those contracts.

Currently, such companies are considered small businesses and can participate in the 8(a) contract set-aside program, but they also receive extra benefits that other small businesses do not.

Those benefits include no limits on the size of contracts that can be awarded to them without competition. For other small businesses, the ceiling is $3 million for services contracts and $5 million for services.

Other advantages include in essence never graduating from the 8(a) program because ANCs and American Indian tribes can own multiple 8(a) companies.


Previous coverage:
The rise of the ANCs
Dollars keep growing for Alaska Native Corporations
Time to reform ANCs
Winners and one possible loser


Other businesses are quick to complain about those advantages, especially in light of the explosive growth such companies have experienced since 2000. As we’ve reported, contract obligations went from $265 million in 2000 to $1.1 billion in 2004. Several ANCs are now on Washington Technology's Top 100 list.

ANCs and tribes are smart to form the Native 8(a) Works organization. The goal is to show the value of the services the companies deliver to the government and the benefits that flow back to the people in the ANCs and tribes.

That’s the big catch with this program: It isn’t as though an individual or a small group of individuals is reaping all the monetary awards.

Profits from those companies go to building schools, health care facilities, scholarships and other worthwhile programs.

But having said that, I have to come down on the side of the reformers. Those companies have grown large and are too strong competitively to be swimming in the same pool as other 8(a) companies.

My suggestion is to put them in their own category, but let’s not call them small businesses.

Congress should set a goal for the companies that is separate from the 23 percent small-business goal. That 23 percent is cut up enough with the various small-business categories that exist today.

Any reforms should strive to protect the benefits that flow back to the ANCs and tribes while creating a more level playing field that delivers value to the government.

Posted by Nick Wakeman on Jul 14, 2009 at 7:22 PM


Reader Comments

Tue, Jul 28, 2009

Nick, what you are clearing missing here in your extremely one-sided coverage is that ANCs exist to support entire communities, as opposed to individually owned small businesses that increase the wealth of one individual or one family. Have you been to rural Alaska, Nick? Have you visited many reservations? It is also important to note that ANCs have worked to bring in other small businesses throughout their history.

Thu, Jul 16, 2009 Amtower

Nick - the abuses in the set-aside programs go back a LONG way and I find them both amusing and disgusting. Amusing because the way many of the laws are written invite the abuse - and disgusting because the bottom feeders all slither through the legal loop-holes to take business away from those who should get it.Close the loop-holes and make it a crime punishable by hard time in jail to violate federal procurement regulations. Not that I have an opinion.

Wed, Jul 15, 2009 Blake

ANCs do in fact deliver economic, social, and cultural benefits to their shareholders due in part to the 8a program. They have increased their capabilities over the years just as Congress intended. Besides, Native enterprise contracting represents a fraction of the total federal contracting pie - only 1%!

Wed, Jul 15, 2009 Blake Anchorage, AK

ANCs do in fact deliver economic, social, and cultural benefits to their shareholders due in part to the 8a program. They have increased their capabilities over the years just as Congress intended. Besides, Native enterprise contracting represents a fraction of the total federal contracting pie - only 1%!

Wed, Jul 15, 2009 Frank

Reform and of ANCs is long overdue! What a joke, the ANCs are no more small businesses than our 8(a) small business being called a large business! I keep hearing that the money that ANCs make flows back into building schools, health care facilities, scholarships and other worthwhile programs. Need for the GAO to truly determine the amount of profits the ANCs make and how much money actually flows back to the people. I sincerely that a very small amount of money actually goes back to the tribe. I agree whole heartily that any reforms should strive to protect the benefits that flow back to the tribes while creating a more level playing field that delivers value to the government. Why not make it truly competitive and have an ANC category set-aside where ANCs compete work among other ANCs. Need to move toward a more level playing field now, enough is enough! Frank

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