Alaska Native leaders on Monday urged state lawmakers to join them in defending an embattled federal contracting program that has spurred enormous growth among Alaska Native firms in recent years.

Several legislators, including Sen. Lesil McGuire, R-Anchorage, pledged to support the Native firms in their ongoing fight on Capitol Hill to preserve the contracting program. They hosted a joint legislative hearing in Anchorage to gather testimony about the economic impact of the contracting program in Alaska.

Rep. Jay Ramras, R-Fairbanks, called the program the "greatest single success story in Alaska" after the building of the trans-Alaska pipeline.

But not everyone is pleased with the U.S. Small Business Administration's 8(a) minority contracting program, which allows Alaska Native corporations, Lower 48 tribes and Native Hawaiian organizations to obtain federal contracts without competitive bidding and without any limits on the dollar amount.

This year, U.S. Sen. Claire McCaskill, D-Mo., launched an investigation of Native firms' contracting privileges, citing potential abuses that could harm taxpayers. This summer, her government oversight committee issued a report stating that the benefits to Native shareholders "may not be in proportion to the potential for waste, fraud and abuse."

At Monday's hearing, several Alaska Native executives argued that their firms have become successful because they are doing good work. They also said they are providing innumerable benefits to shareholders due to revenue from federal contracting, such as internships, jobs, dividends, cultural preservation and subsistence-related programs.

One of the state's biggest Native firms, Chugach Alaska Corp. of Anchorage, used government contracting dollars to recover from bankruptcy, testified Barney Uhart, the company's president.

Due to the bankruptcy, Chugach couldn't pay dividends to its shareholders until 2000, when its debts were finally paid off, Uhart said.

When people ask him how 8(a) benefits shareholders, "the fact that we (Chugach) are still here answers that question," he said.

Ahtna Inc. of Glennallen also used government contracting to recover from its own near-failure in the 1990s, said Roy Tansy, the company's chief operating officer.

He said eliminating the 8(a) program wouldn't destroy Ahtna but it could reduce its revenue and its ability to take profits from its subsidiaries and put them into shareholder programs.

Uhart testified that he believes that Alaska Native firms are getting attention on Capitol Hill because they are an "easier target" than the bigger, well-known contracting giants such as Halliburton or KBR Inc. Those firms also can obtain government contracts without competitive bidding.

McCaskill's investigation found that Alaska Native companies landed nearly $24 billion in government work over the past eight years. She said she plans to seek changes to the 8(a) program. Her spokeswoman Maria Speiser said in September that the changes are "not a matter of if, but a matter of when."

The SBA announced last week that it plans to make its own changes to the minority-contracting program after a multiyear review. The proposed changes are scheduled to be published on Wednesday, triggering a 60-day comment period.

SBA Director of Native Affairs Clara Pratte testified during Monday's hearing. She said the SBA has responded to some recent criticisms of the program by developing the new regulations and increasing the number of SBA staff who review 8(a) applications.

She said some of the criticism of the 8(a) program has been valid but some of it has also been "the politics of perception."

Speiser said Monday that McCaskill's office has not received a copy of the proposed regulations but looks forward to seeing them.

Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317.

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