This week, high-level government and industry representatives will convene in Anchorage for a two-day conference hosted by the National 8(a) Association at which minority-owned small businesses will have access to a concentrated dose of advice and opportunity.
Speakers include top staff with the U.S. Small Business Administration, U.S. Department of Justice, U.S. Department of the Interior, law firms and procurement representatives from NASA and other space and engineering companies, and attendees of the sold-out conference will have the chance to meet with presenters one on one.
For a small business to seek out these people one on one would easily cost $20,000 in time and travel, said Ron Perry, president of the National 8(a) Association and CEO of Teya Technologies Inc., an Alaska Native-owned 8(a) firm. A conference of this caliber hasn't happened in at least 10 years, and the opportunity to have so many influential decision-makers in one spot over the course of two days is "priceless," he said.
The 8(a) program is designed to help qualifying businesses "compete in the American economy and access the federal procurement market." Alaska Native-owned companies, which receive special treatment within the program, are able to land contracts of unlimited value without competition. That perk has recently come under fire, the charge led by Sen. Claire McCaskill, D-Mo., who believes the companies are enriching themselves without taking care of the impoverished Alaskans in their home communities.
Instances of rulebreaking, entanglements with allegedly unscrupulous executives and outside business partners and questions of fairness of awards outside their home state have recently dogged a handful of Native-owned companies. Other companies have faced allegations of overpriced work. Supporters of the 8(a) program for Alaska Natives, though, say the scrutiny is unwarranted, that it's easier to pick on a subsection of the overall 8(a) world than look to the larger whole where abuses are likely also taking place.
Small businesses play a critical role in the U.S. economy. More than half of working Americans either own or are employed by a small business, and small businesses account for two out of every three new jobs created each year, Karen Mill, Administrator for the U.S. Small Business Administration, said recently. The SBA strives to ensure 23 percent of federal contracting goes to small businesses, and with American Reinvestment and Recovery Act money it's actually pacing ahead of that goal. Small businesses have netted 29 percent of ARRA funds -- $6 billion -- $2 billion of which has gone exclusively to 8(a) firms.
Within the SBA's disadvantaged business group are four categories: HUBZone (designated by geographical region), 8(a) (designated by status of the company's ownership), service-disabled veterans, and woman-owned. Companies may be classified in as many categories for which they are qualified.
Cook Inlet Region Inc. is one of dozens of Alaska Native corporations that plan to attend the conference. It has two 8(a) certified companies, which combined provide environmental consulting and cleanup, construction management, and space and missile defense engineering services to the government, mainly the Departments of Energy and Defense. The lineup of presenters -- which includes government and private sector space systems companies like ATK, SAIC, Boeing and Lockheed Martin, as well as large construction firms like Balfour Beatty -- caught CIRI's eye.
"We look forward to being able to market to NASA" and the other prime contractors in space and missile defense, CIRI vice president Greg Razo said.
While business development and networking are the primary focus of the meeting, political and legislative matters of interest to the 8(a) world will also be discussed.
Among the topics: the implications of a recent court ruling that caused a business owned by an Alaska Native corporation to potentially lose a $10.5 million contract with the U.S. Army Office of the Judge Advocate General Corps. In March, a federal court ruled that the Army didn't follow procurement rules when awarding the contract to the Native-owned business, Copper River Technologies. The court found that the Army should have instead allowed small businesses in economically disadvantaged regions, or HUBZone businesses, to compete for the contract with priority over other types of small business classifications, including 8(a). The 8(a) designation is limited to economically and socially disadvantaged ownership, such as racial minorities, and unlike other companies, Alaska Native corporations that qualify for the program are allowed to go after sole-source contracts of unlimited value. Other small businesses' sole source awards are capped at $5.5 million. The SBA, which wants procurement parity among all of its disadvantaged small-business designations, has said it will push for Congress to correct the language in the controlling law.
A solution to a recent congressional change requiring procurement officers to justify any sole source awards in excess of $20 million is also sought, said Perry. The rule change serves only to slow down contracts for which there may be no competition and for which speed is of the essence, as with companies that may provide unique technologies for use at war, like specialized aircraft or bomb proofing capabilities. "All this does is add more bureaucracy to an already bureaucratic process," he said.
As for McCaskill's claims that Native-owned companies are unfairly getting the lion's share of federal 8(a) contracting, debates over what's fair when it comes to competition aren't unexpected, nor will they go away, Perry said. For example, another preferential program under the SBA, the service-disabled veterans program, extends unlimited contract preferences to qualifying companies for life, while Native-owned companies must graduate from the 8(a) program within nine years.
In a matter of years you could have 25,000 service disabled veteran companies enjoying favoritism, but no one is looking at that right now, Perry said. People are scrutinizing Alaska Native companies because they've excelled beyond expectations, but in the larger 8(a) world and its continued attempts to level the playing field "there are more problems on the horizon," Perry said.
In additional to Native-owned companies, representatives from woman-, Hispanic- and black-owned companies will also be in attendance.
The conference begins Tuesday at the Mariott Hotel in downtown Anchorage.
Contact Jill Burke at jill(at)alaskadispatch.com.