Alaska Native corporation subsidiaries prosper: SBA 8(a) special provisions battled.

• Author: Liles, Patricia
• Position: ALASKA NATIVE BUSINESS NEWS

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Eighteen years ago, Alaska Native regional corporation Chugach Alaska was bankrupt and facing a bleak future in its natural resource-driven business lines, thanks to a declining timber market, a glut in salmon stocks, a fire at a corporate-owned cannery, an overbudget sawmill development and the actual and perceived fisheries damage from the Exxon Valdez oil spill.

"We were invested in all the wrong things at that time," said Barney Uhart, now president of Chugach Alaska Corp., which represents Alaska Natives in Southcentral Alaska.

FEDERAL CONTRACTING

After filing for bankruptcy in 1991 and having the final reorganization plan approved in 1992, Chugach Alaska's board decided to take a chance on a different type of business line--federal contracting service work, which required a small amount of capital investment for the struggling Native corporation.

Uhart, with experience in government contracting work and specifically with minority-owned firms working under the SBA 8(a) Business Development Program, was recruited by Chugach to help develop the new line of business.

SBA's 8(a) program targets socially and economically disadvantaged individuals and businesses for contracting opportunities with the federal government, which has a goal of 23 percent of federal procurement going to small businesses.

Chugach received in 1994 two small federal contracts in facilities maintenance and hired 60 employees to conduct the work, according to a 2007 report by Jonathan B. Taylor, "Native American Contracting Under Section 8(a) of the Small Business Act: Economic, Social and Cultural Impacts."

By 1998, Chugach's 8(a) subsidiary exceeded the size requirements of the program and graduated from it and since has partnered with giants in the federal contracting arena, Bechtel and Lockheed Martin, to win a full and open competitive bid contract. As of 2007, Chugach had graduated five Section 8(a) companies.

"As long as you're providing services and providing them well, the government pays on time. There's a reasonable rate of return, not as high as more risky investments or types of business," Uhart said. "It gave us the ability to get back into business, from a depressed situation from bankruptcy."

In 2000, the last of the corporation's creditors was paid, Uhart said, and shareholders began receiving dividends.

8(a) SUCCESS

Today, Chugach is a thriving corporation, reporting more than $950 million in revenues and $36 million in net...