The 13 Alaska native regional corporations: an operating report; overall in 2002, the corporations tallied $2.28 billion in revenue, a 22 percent drop from 2001.

• Author: Stricker, Julie
• Position: Alaska Native Business News - Alaska's Native regional corporations

Over the past 30 years, Alaska's Native regional corporations have become an economic engine for the state, providing billions of dollars in revenues, pouring millions into nonprofit organizations, creating jobs and fostering education.

Today, the corporations have business interests across the United States and around the world. As Alaskan interests became more intertwined with the national and international economies, the corporations' bottom lines became tied more closely to Outside trends. During the stock market boom of the 1990s, corporate fortunes rose. On the other hand, the lagging stock market and general economic malaise in 2002 also were felt in Alaska.

Overall in 2002, the corporations tallied $2.28 billion in revenue, a 22 percent drop from 2001. However, most of the drop came from Cook Inlet Region Inc., which is coming off two record-setting years. Nine of the 13 regional corporations boosted revenues, although profits overall were lower.

The corporations showing the largest growth are those taking advantage of a government trend toward outsourcing through the Small Business Administration 8(a) program. Under 8(a), minority or disadvantaged businesses are given a preference on government contracts. Because of their creation under the 1971 Alaska Native Claims Settlement Act, the regional corporations are eligible for the program and 12 of the 13 have subsidiaries certified under that program.

CHUGACH ALASKA CORP.

One of the first to take advantage of 8(a) was Anchorage-based Chugach Alaska Corp. In the past decade, Chugach Alaska has won government contracts worth billions of dollars through its six subsidiaries in such areas as facilities operations and maintenance, telecommunications, information technology and environmental services. It has operations across the United States and in far flung places such as Spain, Turkey and Guam.

Outside the 8(a) arena, Chugach Alaska also has been successful. In 2002, it teamed up with Bechtel Corp. and Lockheed Martin Corp. to win a potentially multibillion-dollar contract for base operating services on Kwajalein Atoll in the South Pacific.

Chugach Alaska is continuing to aggressively market its government contracting strengths and is expecting several new projects in upcoming months, says President and Chief Executive Officer Barney Uhart. He expects 2003 revenues to reach $470 million.

The corporation is growing so fast, in fact, that it had to expand its head quarters. A new four-story building adjacent to its current offices was due to be completed in August. The new facility, being built by subsidiary Chugach McKinley, will house all of Chugach Alaska's Anchorage-based operations.

COOK INLET REGION INC.

Also based in Anchorage, CIRI, the most profitable regional corporation, is the only one without 8(a) businesses. It made a windfall from the sale of its telecommunications holdings in 2000 and 2001, paying shareholders special $65,000 dividends.

In 2002, CIRI's revenues dropped precipitously, from $854 million to $95 million.

2002 was a "terrible year," says CIRI President and Chief Executive Officer Carl Marrs.

CIRI had expected the drop, saying the VoiceStream telecommnications investment was a big revenue spike. CIRI also has investments in upscale resorts and a casino, construction and oil field services and tourism. In 2002, CIRI liquidated large parts of its real estate portfolio in the Lower 48 and Anchorage because of favorable market conditions.

Besides the huge payoff, the VoiceStream deal had...