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Contracting lifts impoverished peoples

  • Author: Helvi Sandvik
  • Updated: September 27, 2016
  • Published July 22, 2009

I believe it when Sen. Claire McCaskill (D-MO) says her inquiry into the Alaska Native Corporations' (ANC) federal procurement preference is nothing personal.

As a former state auditor, the senator has a natural inclination to make sure Americans get the best value possible for their tax dollars. We applaud her efforts and fully support her quest for increased oversight.

That said, it was pretty obvious that the senator's mind was made up when she gaveled to order her Subcommittee on Contracting Oversight last Thursday. From her opening statement on, she indicated that she wants to significantly change the special provisions Congress gave the ANCs under the Small Business Administration's 8(a) program.

She appears ready to gut the one Native American program that actually works as Congress intended. Federal contracts provide critical socioeconomic benefits to Native Americans while delivering quality work at competitive rates to meet the demanding needs of the U.S. government in a timely manner.

Why Sen. McCaskill is focused on the tiny sliver of work the ANCs receive is a perplexing question. As she states on her website: "Claire believes that one way to reduce government spending is to target government contractors. Government contracting is a trillion dollar industry, but it has received little oversight in the past."

That's admirable, but the ANCs represent barely a full percentage decimal point on the overall scale of government contracting, and by all accounts, we're doing a good job. As Sen. Mark Begich testified: "This is one of the most successful programs this government has ever done."

It's true that the number and size of Native 8(a) contracts have grown tremendously over the years. This causes some to insinuate that ANCs' success is adversely affecting other 8(a) participants and that the lack of competition costs the nation money. The fact is that the total value of all types of 8(a) contracts has grown in the same time frame. Federal agencies are required to demonstrate both capability and value during the contract negotiation process.

There's no evidence to support these allegations, and as Sen. Lisa Murkowski pointed out: "I am deeply concerned by the suggestion that a victory for the Indians is a defeat for businesses enjoying preferences through other socioeconomic classifications."

Some try to downplay the benefits of the 8(a) program to Native Americans. They should listen to the testimony given by Sarah Lukin who hails from the village of Port Lions. "And it is real, too, that Native women have earned an education because of Native 8(a) benefits, and that our Native children now speak a few words of their traditional language that had been lost for generations, and that our Native elders now receive a dividend to offset their very limited income."

A 2005 Native American Contractors Association survey found 12 ANCs contributed more than $88 million to Native corporation permanent funds, supported 3,170 jobs for shareholders, paid $33.7 million in dividends and contributed $15 million to educational, cultural and social programs.

It's a long ways from Washington to Kiana. In fact, it's a world completely different from the small Missouri towns Sen. McCaskill grew up in. Many Native Americans still live in the most economically and socially destitute of conditions, and I was pleased when Julie Kitka invited the committee to visit Alaska for a first-hand look. It will make them better understand why Congress codified ANCs' economic disadvantage.

As Sen. Murkowski testified, the 8(a) stakes are high. "Congress enacted a law giving Indian-owned and controlled entities an opportunity to build federal contracting businesses. Many rose to the challenge ... Now that same federal government threatens to pull the rug out from under them. ... If we are not careful, policy changes prompted by this subcommittee's inquiry will go down in history as another of the ill-conceived policies that we in the Congress are later forced to apologize for."

At NANA, we believe the Native 8(a) model could work for hundreds of other disadvantaged and minority businesses, and that it is in the nation's best interest for the SBA to raise the cap on awards for all 8(a) businesses.

Helvi Sandvik is president of NANA Development Corporation.