The other economic initiative success story
Part two
WASHINGTON – Congress has provided Native-owned small businesses with unique advantages for unique reasons. Now Congress is poised to cancel some of those advantages, due in part to the unique success of Alaska Native Corporations under the Small Business Administration’s 8a contracting program.
As the Government Reform Committee in the House of Representatives has notified the Government Accountability Office in no uncertain terms, Alaska Native Corporations placed in five of the top 10 slots for federal 8a contracts awarded to disadvantaged minority small businesses in fiscal year 2004. That was the same year total 8a contract awards from federal agencies to Alaska Native Corporations grew to $1.1 billion, from $265 million in FY 2000.
In private enterprise, investors would be in love with growth like that. But in this case, the investor is Congress. Karen Atkinson, executive director of the Native American Contractors Association, said not all lawmakers understand the reasons that Native 8a firms participate differently in the program than other disadvantaged small businesses. ”These enterprises provide for an entire community, which sometimes numbers in the hundreds and thousands, and so their involvement is intended to stimulate economic development on a community level,” Atkinson said. ”Within the program, tribal enterprises, Alaska Native Corporations and Native Hawaiian organizations can have contracts awarded without competitive thresholds … there needed to be a larger revenue pool to provide for economic development on a community basis.”
Non-Native 8a firms are not eligible for federal sole-source (i.e., noncompetitive) contracts in excess of $5 million for manufactured goods, or of $3 million for services. Tribal- and ANC-owned 8a firms can also, unlike their counterpart disadvantaged firms, establish multiple 8a firms, enhancing their ability to execute large contracts. And finally, Native 8a firms offer a shortcut alternative to the near-two year process government facilities must otherwise go through if they wish to contract out certain activities that employ a set number or more of civilian government employees.
After the terrorist atrocities of Sept. 11, 2001, the advantages that made sense in previous congressional sessions came together in a perfect storm of Native preferences for federal 8a contracts. Federal procurement contracts became bigger, and personnel cutbacks at the SBA, charged with overseeing the Native 8a program, meant procurement officers could put a premium on the quick, large and legal contracts Native 8a firms alone were eligible to execute. ANCs, though subject to many aspersions during two years worth of congressional hearings on the overall 8a program, in essence did a good job of responding to the opportunities on offer.
But their success meant fewer 8a contracts would be available to disadvantaged small businesses in other settings. The business owners turned to their congressional members, who in turn complained long and loud that their constituents have been put at a disadvantage by Native 8a preferences.
The result has been a bill, H.R. 1873 in the House, that would lower the ceiling on overall 8a contracts, cap the contract amount available on single sole-source contracts and forbid the ”bundling” of multiple small business contracts into larger contracts for quicker execution by larger firms. It passed the House over the objections of Rep. Betty McCollum, D-Minn., who argued in committee that the new limits on sole-source contracts could jeopardize Native 8a businesses. The bill is now before the Senate Committee on Small Business and Entrepreneurship.
Greg DuMontier, chairman of the Native American Contractors Association and president and CEO of S & K Technologies Inc. – a Native 8a success story for the Salish and Kootenai tribes in Montana – said Native 8a contracting transpires in a new political environment created by a tribal foothold on economic development.
”There is a tendency to fear what isn’t understood. And tribal governments largely are not understood, and are therefore feared. We are extensions of that, if you will, because we are tribally-owned businesses. We are not understood, and consequently, now that we are starting to establish a presence in the marketplace, there is a certain amount of fear that goes along with that. We understand that, and we’ve run up against this many times before. So the process is largely trying to create that visibility, trying to hold open what it is that we’re doing here.
”We believe we have a great story to tell, we believe that we’re doing the right thing and demonstrating success, if you will, in Indian country. People working for themselves, generating their own revenues, trying to establish self-sustaining economies, doing something about their own health care, and their own unemployment – that is something that is admirable and is now starting to happen in Indian country. But the backdrop to that is a certain amount of fear, or apprehension about what’s going on, from people who don’t understand Indian country or don’t understand what we’re all about. So the only way we can overcome that fear is to create that visibility and to get that story out … reach out past Indian country with that message.”
