8(A) program benefits Native Corporations: the Small Business Administration's 8(a) program gives Native organizations a push to succeed.

• Author: Stricker, Julie
• Position: Alaska Native Business News

In 1993, Chugach Alaska Corp. was bankrupt. Its timber holdings were unprofitable and the 1989 Exxon Valdez oil spill had wiped out its fishing interests. The Anchorage-based Alaska Native regional corporation, with about 2,000 shareholders, was in danger of liquidation.

The corporation needed to follow a new path, one that promised steady payoffs but required little capital investment Entering the government services field through an obscure Small Business Administration program fit the bill.

Under the SBA 8(a) program, Chugach Alaska gained certification for a subsidiary to pursue federal contracts for military base services.

"Chugach in the early '90s, we were upside down with bankruptcy," says President and Chief Operating Officer Barney Uhart, who has a background in the government services industry. "The 8(a) program and the types of businesses--government services--we chose to get into, required little capital investment. It allowed us to build on something without a lot of capital investment. On top of that, it allowed us to build that history and backlog of work that allowed us to be competitive out of the 8(a) program."

In 1994, Chugach Alaska won $1.2 million and $4.5 million annual contracts to service the U.S. Navy housing on Adak and the U.S. Air Force facility in King Salmon, respectively.

While successfully completing those contracts, the corporation aggressively marketed its services to other agencies and more contracts followed. Chugach Alaska branched out into construction, education, clerical services and information technology, and today is successfully gaining contracts in the competitive market.

In 2000, Chugach Alaska earned more than $100 million in revenues, completed its bankruptcy reorganization plan and paid its first dividend to shareholders. By 2001, the corporation had nearly tripled revenues, to $278 million, and is still growing, according to UharL Almost all of its income is from government contracts.

Its success in the field has not gone unnoticed.

Today, 12 of the 13 Alaska Native regional corporations, several village corporations and other tribal entities have subsidiaries under the 8(a) program. The only regional corporation that has opted to go a different direction is the highly successful Anchorage-based Cook Inlet Region Inc.

The regional and village Native corporations were formed under the 1971 Alaska Native Claims Settlement Act, which divided 44 million acres of land and nearly $1 billion among Alaska's Natives to...