Alaska Journal of Commerce, December 20, 2019– The National Defense Authorization Act that is headed to the president’s desk after a Dec. 17 vote in the Senate includes a provision that will boost Alaska Native corporations’ access to high-dollar, no-bid contracts approved by the U.S. military, officials said.
The new provision relaxes a 2010 limit that restricted Native corporations’ ability to secure large contracts that had brought billions of dollars to the companies in earlier years, Sen. Dan Sullivan said in an interview after the bill cleared the Senate.
Those big, sole-source contracts were awarded under changes to the Small Business Administration’s 8(a) program, which were designed to benefit Indian tribes, Alaska Native corporations and Native Hawaiian organizations. Congress created the program to help thousands of Native shareholders that own the companies and disadvantaged Native communities, Sullivan said.
Sullivan co-sponsored the new provision with Sen. Mazie Hirono, D-Hawaii, the senator’s office said.
“This will have a positive impact for the state’s economy and its citizens, and for Native corporations that are a huge source of growth in our state,” Sullivan said by phone.
The $738 billion defense spending bill for fiscal year 2020 passed the Senate 86-8 on Tuesday, after clearing the House last week. President Donald J. Trump is expected to sign it soon, Sullivan said. Rep. Don Young helped get the contracting provision passed in the House, Sullivan said.
Native corporations are a major player in the government contracting business, thanks in part to the late Alaska Sen. Ted Stevens, who is credited with spearheading the Native contracting program’s creation in the 1980s.
After Stevens lost his Senate seat in 2008, former Missouri Democrat Sen. Claire McCaskill and the late Arizona Republican Sen. John McCain took aim at the Native 8(a) program, Sullivan said.
“This was essentially removed in kind of a sneaky provision,” Sullivan said.
The limit enacted in the 2010 defense spending bill required federal contracting officers to justify no-bid contracts above $20 million, now $22 million, adjusted for inflation. It required approval from the top — the secretaries of the Army, Navy and Air Force, Sullivan said. With those limitations in place, only a small number of contracts above $20 million have been awarded to Native contractors, Sullivan’s office said.
Contractors didn’t want to take relatively small contracts all the way up the military chain, Sullivan said.
The new provision boosts the justification threshold for the no-bid contracts to $100 million. It allows approval from the head of the contracting activity, or their designee, instead of the secretaries.
The Alaska Native Village Corporation Association, representing 177 Native village corporations, praised the change to the “overly burdensome” Department of Defense requirements.
Undoing the provision has been a leading goal for the association, said Hallie Bissett, the group’s executive director. Only a handful of village corporations have benefited from the 8(a) program, with the 2010 provision a limiting factor, the group said in a statement.
“This provision placed an onerous requirement on contracting agencies that worked with village corporations,” she said. “It created confusion for contracting officers, and resulted in overly high, undue levels of contract approval scrutiny for our village corporations that are inconsistent with the goals of lowering contract costs and reducing risks for the contracting agencies.”
Chugach Alaska, a regional Native corporation in Southcentral Alaska, praised the change. It said 8(a) benefits are an “economic engine” to help Native corporations provide dividends, scholarship, jobs and other benefits to thousands of Native shareholders.
“Beyond that, the Alaska Congressional delegation and their staff understand that the success of (Native corporations) echoes beyond our Alaska Native shareholders to help create jobs, inject capital and help strengthen the state’s economy,” said Sheri Buretta, interim president of Chugach.
The Alaska Federation of Natives “appreciates that Senator Sullivan heard the concerns of these key Alaskan businesses,” said Julie Kitka, president of the group. “We commend him for getting the provision in the bill and Senator Murkowski and Congressman Young for voting in support of the (act).”
The Native American Contractors Association in Washington, D.C., called the change a “milestone” that will create opportunities in Native communities across the U.S.
“(The association) believes that the provision will increase business opportunities for Native 8(a) contractors and allow NACA members to continue their work enriching their communities with jobs, educational opportunities, dividends, and investments,” said Annette Hamilton, the association’s president.