Bering straits regional corp. finds success: tiny native corporation packs a punch.

• Author: Stricker, Julie
• Position: NATIVE BUSINESS

[ILLUSTRATION OMITTED]

The storm clouds are clearing and Bering Straits Native Corp. (BSNC) is on course for an era of stability and prosperity unparalleled in its rocky 37-year history.

Recent successes in government contracting have boosted the Nome-based Alaska Native regional corporation into the top ranks of Alaska corporations, according to Gail Schubert, executive vice president and general counsel for Bering Straits. Revenue jumped from $13 million in fiscal year 2003 to $113.3 million in fiscal year 2008, which ended in March.

SHIFTING INTO SUCCESS

The turnaround is in part due to a change of focus in government contracts after a "perfect storm" of events led to losses in the four years prior to 2005, according to Schubert. Those include an adverse decision in an arbitration matter with the Internal Revenue Service, poor performance of the stock market and losses related to construction contracts.

"In the last few years, BSNC's business focus has shifted away from construction contracts to service contracts," Schubert wrote in an e-mail. "Prior to this change in direction, BSNC's revenues were derived approximately 75 percent from construction and 25 percent from service contracts."

The corporation is also on the brink of some long-sought milestones, says President Tim Towarak, who has been with the corporation since it emerged from bankruptcy reorganization in 1989.

"Since 1989 we've been very cautious in everything we've done," Towarak says. "We're starting to gain enough confidence in ourselves to become more aggressive."

Towarak points to Schubert and the people overseeing the corporation's government contract operations as a big part of its recent success, saying Bering Straits hired people with a strong military background who knew the contracting system to help market the corporation. "Once they came aboard, things really took off," he said.

RISING FROM BANKRUPTCY

Bering Straits is an Alaska Native regional corporation formed in 1971 under the Alaska Native Claims Settlement Act drafted by Congress to settle aboriginal land claims, clearing the way for the trans-Alaska oil pipeline. The act created 12 Alaska-based regional corporations that divided $962.5 million and 44 million acres of land--nearly one-ninth of the State's acreage.

Bering Straits' share was $38 million and about 2.2 million acres of land. Like most other regional corporations, Bering Straits made some unwise business decisions in the beginning. The...