ANCHORAGE — Supporters of a federal program that gives Alaska Native corporations a special edge worth billions of dollars in federal contracts said Wednesday that a U.S. government report found what they have long been in favor of: improved oversight of the program.
“It is disappointing that critics are using this innocuous report to attack a program that creates economic opportunity for Native people across the country,” said Will Anderson, president of Koniak Inc., a regional Native corporation and member of a coalition representing Native corporations.
The report by the Government Accountability Office says agencies need to do a better job monitoring the Small Business Administration 8(a) program that’s designed to help small disadvantaged firms.
The report says Native corporations, also known as ANCs, represented $4.7 billion of the $5.5 billion in 2010 program obligations. Sole-source contracts are a primary source of a growth in the tribal 8(a) program.
The GAO report says an audit found minimal oversight by contracting officers working with tribal firms enrolled in the tribal program. A particular area of concern, the report said, was a lack of monitoring on subcontracting.
“Not monitoring the limitations on subcontracting can pose a major risk that an improper amount of work is being done by large business subcontractors under large-dollar value, sole-source contracts to tribal 8(a) firms,” says the report released Tuesday.
U.S. Rep. Ed Markey, D-Mass., is calling for a congressional hearing on the report. Markey and other members of Congress have also requested another GAO report to look at ANC financial disclosures and corporate governance.
“We need ANCs to promote economic development and opportunity for Alaska Natives,” Markey said. “We should make sure they are serving this purpose above all else.”
The SBA implemented new rules last year after the audit began. Companies owned by tribes, Native corporations and Native Hawaiian organizations are now required to report the benefits returning to their communities.
Critics of Alaska Native contracts include U.S. Sen. Claire McCaskill, D-Mo., who has introduced legislation to strip ANCs of their advantage. McCaskill has said only a small percentage of the companies’ profits are reaching Native shareholders.
“This report is further proof that there are serious, ongoing problems with Alaska Native contracting and that those problems are wasting taxpayers’ money,” she said in a statement. “The baby-steps taken so far to crack down on these problems haven’t solved the issue, and serious reforms are necessary to protect the American people and their tax dollars.”
Supporters include all three members of Alaska’s congressional delegation. Republican Sen. Lisa Murkowski said the new SBA rules should be given a chance to take hold, adding that more oversight is desirable. She said it was important to note that the GAO recommendations didn’t include making any statutory changes to the program.
“From the perspective of those ANC 8(a)s, they’ve said ‘We don’t have any problem with the transparency, the monitoring, the oversight,” she said.
Democratic Sen. Mark Begich said there are no negative findings of ANCs themselves in the report, which focuses mostly on how the program can be better managed.
“I’ve long said the SBA’s 8(a) program needs better training and better oversight, and this report confirms that,” he said.
The third member of the state’s delegation, Republican Rep. Don Young, said he was pleased with to see the SBA revamp its regulations to reduce potential abuse.
“Unfortunately, Alaska Native Corporations have become an unjustified target for criticism from those who fear Native economic development,” he said.

Comments (4)
Add commentend this giveaway
When you give a contract to a corporation who will do nothing but take a slice off the top and the subcontract the actual performance of the contract you are just paying too much.
Gov't Contracting
Islander, you obviously don't know how Gov't contracting works:
Three contractors are bidding to fix a broken fence at the White House in D.C.; one from Indiana, another from Illinois, and the third from Alaska. They go with a White House official to examine the fence.
The Ohio contractor takes out a tape measure and does some measuring, then works some figures with a pencil. "Well," he says, "I figure the job will run about $900: $400 for materials, $400 for my crew and $100 profit for me."
The Indiana contractor also does some measuring and figuring, then says, "I can do this job for $700: $300 for materials, $300 for my crew and $100 profit for me."
The Alaska Tribal contractor doesn't measure or figure, but leans over to the White House official and whispers, "$2,700."
The official, incredulous, says, "You didn't even measure like the other guys! How did you come up with such a high figure?"
The Alaska Tribal contractor whispers back, "$1000 for me, $1000 for you, and we hire the guy from Indiana to fix the fence."
"Done!" replies the government official.
And that, is how government contracting works!
Funny analogy
That's funny OJ! I think we should have the native corporations head up the next batch of green energy projects I'm sure are coming up.
Change that to 2.7 million
Change that to 2.7 million and you have a defense contract.