Controversial 8(a)s: it's good for the goose, but is it good for the gander?

AuthorWest, Gail

"THE LITTLER GUYS ARE ALWAYS LOOKING FOR A POSSIBILITY TO PARTNER. THEY WANT TO KEEP AN OPEN DIALOGUE WITH THE LARGER BUSINESSES. FOR INSTANCED CHUGACH MAY GET A BIG CONTRACT, AND, IF YOU KNOW SOMEONE THERE AND CAN GET A PIECE OF THAT CONTRACT, IT KEEPS THE MONEY IN THE STATE."

RON PERRY PRESIDENT ALASKA 8(A) ASSOCIATION

In May 2005, a Bristol Bay Native Corp. subsidiary won one of eight national U.S. Department of Defense Nunn-Perry awards. The award, given to SpecPro for its mentor-protege relationship with a Hispanic-owned small business, Terra Health, recognized SpecPro for its outstanding program performance. SpecPro teamed up with Terra Health at the behest of BBNC's board, which held the goal that SpecPro become a business mentor for an 8(a) firm.

"SpecPro had grown under a similar arrangement with a larger government contractor," said company President and Chief Executive Officer John Reeder, "and the relationship with Terra Health seemed like a good fit."

Under the Air Force's mentor-prot6g6 program, the government reimbursed SpecPro for mentoring expenses, and provided the protege's employees with university training for three years. Evidently, the relationship has paid off for both mentor and protege. Terra Health's staff grew from approximately 65 to 325, and its revenue went from $1.65 million to $10.95 million. SpecPro went from 175 to 411 employees, and its revenue climbed from $19 million to $40 million annually over the first two years of the relationship.

Although the SpecPro Terra Health relationship seems to point toward the success of the mentor-protege and the 8(a) set-aside programs, acceptance of that view gets mixed reviews.

A BIG ADVANTAGE

Under the Small Business Administration's 8(a) program, most small disadvantaged contractors are eligible for sole-source contracts up to a cap of $3 million for goods and services, and $5 million for manufacturing. Alaska Native, Native Hawaiian and American Indian organizations, however, now have no sole-source limit for federal contracts. Alaska Native corporations are automatically included in the sole-source program, and although tribal and Native Hawaiian organizations have to go through the qualification process, they can access the special sole-source provisions, as well.

Ron Perry, president of the Alaska 8(a) Association and owner of his own business--Microware Inc., a certified 8(a) company--feels the no-threshold provision is justified.

"In my opinion, the...

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