Alaska Native Corporations Thrive
Alaska Native Corporations continue to rack up contracts, despite a deepening recession that is battering other small, minority-owned business.
How? Special set asides that permit ANC's to receive no-bid contracts of any size from federal agencies.
Here's a report from Government Executive's Robert Brodsky, who writes that in "fiscal 2008, companies owned by Alaskan regional and tribal corporations earned a record $5 billion in federal contracts, nearly 10 times the $506 million they earned in fiscal 2000, according to new data analyzed by Government Executive. The data, compiled by Eagle Eye Publishers of Fairfax, Va., makes clear the extent of ANC prominence.
"The corporations have won jobs in virtually every state and major sector, from reconstruction contracts in Iraq to information technology agreements in Washington. Individual corporations have thrived. Five ANC parent corporations have brought in $2 billion or more in contracts since 2000, with Anchorage-based Chugach Alaska Corp., leading the way at $4.5 billion."
Here's a bit more from his story:
"Federal acquisition specialists said the data shows that the program, which was designed to help small and disadvantaged companies, has been undermined by a system that rewards companies that earn hundreds of millions in annual revenue.
"'The ANC program, as currently implemented, is a blunt instrument that distorts the procurement system, injects well-founded cynicism into the process, and reinforces the belief that government procurement is more about allocating political spoils than ensuring that the government receives value for taxpayer money,' said Steven Schooner, who teaches contracting law at The George Washington University.
"Alaskan firms argue that it is unfair to compare them to other small businesses that operate under a model designed to benefit individual entrepreneurs. ANCs reinvest much of their revenue in the native population through their shareholders. They also note that they spend millions of dollars on cultural and social programs that benefit the larger Alaskan community.
"'If an individual has a $5 million contract, all of the benefit goes to that person,' said Chris E. McNeil Jr., chief executive officer of Sealaska, a regional corporation in southeast Alaska with 17,600 shareholders. 'That is simply not the case with Alaska native corporations and tribes because that benefit is diluted down to the tribe or the native corporation.'"
Government Inc. believes this is a fascinating, important matter. ANC's have been used in the past as pass-throughs to other federal contractors, raising the question about just what value they add.
We believe Congress will eventually take a closer look at the ANC set asides -- which happen to be a legacy of Sen. Ted Stevens of Alaska, who lost his seat last year after becoming the Senate's longest-serving Republican ever.
In October, Stevens was convicted on seven corruption charges relating to allegations that he lied about accepting gifts and home renovations, without paying, from a wealthy oil contractor
By Robert O'Harrow |
March 9, 2009; 12:58 PM ET
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