8(a) program development: overcoming adversity for disadvantaged Alaska Natives.

AuthorStricker, Julie
PositionSPECIAL SECTION: ANCSA @40

Alaska Native corporations saw phenomenal growth over the past decade, in part because of their maturing, diversified operations, but also due to increased participation in ventures targeting government contracts. For some corporations, government contracts provided as much as 88 percent of their total revenue in 2009. But as revenues have grown, sometimes exponentially, the corporations are under increased scrutiny amid calls for crackdowns on how the contracts are awarded.

'Tm frustrated and disappointed," said Will Anderson, president and CEO of Kodiak-based Koniag Inc. "There's such a lack of understanding of what we're doing in our communities."

The Alaska Native regional corporations and more than 200 village corporations were created under the 1971 Alaska Native Claims Settlement Act, which aimed to settle long-standing aboriginal land claims. The corporations divided 44 million acres of land and $962.5 million, which ir was to use as seed money for economic development. The legislation had two major goals: the corporations were to provide financial, social and economic benefits for shareholders; and enable economic development in the state of Alaska.

Later, a series of amendments defined the corporations as "socially and economically disadvantaged businesses." Under that definition, the corporations were eligible to use a Small Business Administration program called 8(a) that is designed to help small disadvantaged businesses access government contracts. Federal agencies are allowed to bypass the competitive bid process and award sole-source contracts directly with 8(a) businesses.

ALASKA NATIVE PREFERENCES

Former Alaska Sen. Ted Stevens amended the 8(a) program to give Alaska Native corporations additional preferences. While other small business owners can have only one 8(a) company at a time, and can stay in the program for only nine years, Alaska Native corporations can have multiple businesses in the 8(a) program, as long as they are in different sectors. They are exempt from caps on sole-source contracts. The corporations also are allowed to subcontract work to non-8(a) companies and can enter partnerships and joint ventures with non-Native companies to win sole-source contracts.

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Alaska Native corporation leaders say these exemptions make sense because they benefit thousands of shareholders, not just one or two people, which is the norm for other business owners in the program. A report on the U.S. Senate...

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