Anchorage Daily News

For the past two years, some members of Congress have scrutinized and tried to limit the controversial federal contracting advantages that spurred the recent rapid growth of many Alaska Native corporations.

The companies -- which have reaped billions in revenue through minority contracting -- said this week they have come out battered in the public eye but so far, the federal program that helped them become successful remains intact.

Alaska Native corporations and Lower 48 tribes fended off several congressional amendments this year that would have either capped the size of their federal contract awards or limited their ability to obtain federal contracts of any size without needing to bid against other firms.

Sen. Ted Stevens and Rep. Don Young both took some credit last week for the latest victory -- the elimination of an amendment inserted by a California congressman into a defense bill. The amendment would have forced certain federal agencies to curtail their sole-source contract awards to Indian tribes, Alaska Native corporations and Native Hawaiian organizations.

Government contracting reform, in general, has been a big priority for the Democratic-led Congress, with as many as 800 bills introduced since 2007, said Karen Atkinson, executive director of the Native American Contractors Association, based in Washington, D.C. The group was created to defend the Native firms' interests.

In the House of Representatives, a few lawmakers have focused on Alaska Native firms' use of sole-source contracts of any size, she said.

A House committee requested a Government Accountability Office audit of the Native firms' contracts. The report, published in 2006, didn't fault the firms but said federal officials didn't oversee them adequately.

Critics still say the contracts are ripe for abuse and that Native corporations are too big to merit inclusion in a program designed for small and disadvantaged minority firms.

Why don't the critics go after the much larger, non-Native companies that get 99 percent of the federal government's sole-source contracts? said Sheri Buretta, the chairwoman of Chugach Alaska Corp., an Anchorage regional Native corporation that used minority contracting to get out of bankruptcy. Chugach has since become one of Alaska's biggest companies, and in 2007 it generated approximately $890 million in revenue from contracting.

Over the past decade, Alaska Native firms have obtained federal work ranging from operating a training facility in California for Marines headed to Iraq to managing rebuilding projects in the Gulf of Mexico region after Hurricane Katrina.

The Native firms deserve to be included in the minority program because they are owned by thousands of disadvantaged shareholders who receive dividends, scholarships and job opportunities as a result, Buretta said.

In 1992, Stevens persuaded Congress to designate Alaska's Native firms as small and disadvantaged minority-owned firms, allowing them to seek government contracts set aside for such companies. Also, Alaska Native and Lower 48 tribal firms are allowed to seek sole-source contracts of any size.

Those contracts have been "invaluable" to Alaska Native corporations, Stevens said in a press release last week.

He was "relieved we have once again been successful in defending it."

A number of other influential Lower 48 lawmakers joined Stevens and Young in fighting the changes, including Sen. Pete Domenici, R-N.M., and Rep. Nick Rahall, a Democrat from West Virginia who chairs the House Committee on Natural Resources.

Why? Lower 48 lawmakers have learned that these minority contracts benefit Lower 48 tribes in their districts, Young said in a interview Wednesday.

"They are waking up now," he said, adding that Native organizations are also improving their relationships with politicians and other minorities.

This year, for example, one of the Native firms' most potent critics became a key ally.

The National Black Chamber of Commerce, which had railed against the sole-source contracts in the past, visited Alaska this year and signed a partnership agreement with Alaska's minority contracting association. The group's president said that it would help defend the Alaska Native companies from political attacks.

But that didn't stop the reform attempts by Rep. Henry Waxman, D-California, who chairs the House Oversight and Government Reform Committee.

Waxman has been persistent in inserting provisions in a variety of bills to restrict Alaska Native contracting, Atkinson said.

So far, he hasn't been successful, but more political battles could erupt next year, Atkinson said.

"This is the latest episode. We're hoping we're going to tire him out eventually," she said.

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

Growth steady for Native corporations

Alaska Native regional corporations' combined revenue from minority contracting:

• 2006 -- $1.8 billion

• 2005 -- $1.3 billion

• 2004 -- $1.1 billion

Source: ANCSA Regional Association, 2008 report and Daily News research.

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