I applaud Mr. O’Harrow’s concerns about non-competitive awarding of contracts, but encourage he and his readers to broaden their scope of concern to all contracts, which are, and have been awarded non-competitively. (Think Halliburton/KBR and Blackwater, to start.)
Alaska Native Corporations like other corporations are not required to limit their business to one small geographical area; they are free to seek contracts anywhere as any other corporation may. Alaska Native Corporations are not limited in where they may place offices, headquarters or operating units any more than any other U.S. Corporation.
As the once new and inexperienced Native Corporation’s expertise grew, following federal settlement of old issues with Native American groups across the country receiving settlement funds, they used what they learned to become better at seeking and winning contracts, and in seeing the niches they could develop expertise to fill. One cannot blame them for that. Generally, we are told by companies that successfully do business, that it is good business sense to do so. The Alaska Native Corporations have become quite good at this process.
There are a number of legitimate concerns that do need to be scrutinized. One of those areas is what appears to be a loophole in the original intent of providing a fair playing field to Alaska Native Corporations and that is the ability of an Alaska Native Corporation to spin off as many “8-a set aside legal entities” as they wish. With the leveling of the playing field, it is now becoming abundantly clear that Alaska Native Corporations should be under the same or very similar constraints as other minority businesses.
Another area that needs serious scrutiny is that of the large corporations, (look no further than the Boeing company), that are forming business ventures and partnerships with Alaska Native Corporations to join in on the wealth of available funding to these Native Corporations, through lucrative defense procurement contracts. The law allows for large corporations such as Boeing to serve in a mentoring capacity to the Native Corporations under the “8-a set aside” program. These mentoring roles create extremely lucrative opportunities to defense contractors that are not available across the board to other corporations.
Another area that deserves close scrutiny is the influx of retired military personnel into the Alaska Corporations’ senior management levels. These individuals, upon retiring from the military, often acquire lucrative positions in the senior management of the Alaska Native Corporations directly after leaving their military assignments at Alaska Military bases.
Another somewhat troubling problem is that the wealth of Alaska Native Corporations is not trickling down to those natives in their villages who were originally targeted to be helped. For the most part, it remains within the upper echelons of the corporations. -GFS
Alaska Native Corporations Under Scrutiny
Some long overdue scrutiny of ANCs is about to get intense.
Some of you may have seen some trend data recently. It came from the office of Sen.Claire McCaskill in anticipation of a hearing on July 16. Some of the salient points included in a statement her office released:
– “Between 2000 and 2008, contract awards to Alaska Native Corporations increased by $4.6 billion, from $508.4 million to $5.2 billion.”
– “In percentage terms, ANC contract spending increased 915 percent from 2000 to 2008, an average increase of 33.6 percent per year.”
– “In total, ANCs received $23.8 billion in federal contracts between 2000 and 2008.”
You may recall that ANCs occupy a very special place in the federal procurement universe. Formed with the idea of settling native Alaska claims against the federal government — and helping Native Alaskans to pull themselves out of poverty — the firms qualify for extraordinary set asides that transcend just about all others.
They’re considered “small businesses” but there’s no limit on the size of contracts they can receive without competition. They can operate anywhere, so many of them have operations in Washington and across the rest of the lower 48. They often subcontract work on intelligence, technology etc. to traditional Beltway companies. Critics say they’re used in effect as pass throughs.
It all adds up to a lot of questions about whether taxpayers are getting what they pay for — and whether all that money is really helping the people who need it in Alaska.
From the McCaskill press release:
“This information shows that federal government contracts to ANCs have increased dramatically and that ANCs have received a disproportionate share of small business loans. The preliminary analysis also indicates many ANCs are not based in Alaska and most of the work awarded to ANCs, which primarily contract through the Department of Defense, is not performed in Alaska at all.”
By Robert O'Harrow | June 29, 2009; 12:32 PM ET