Changes may be looming for SBA 8(a) Native contractors

Proposed changes to the Small Business Administration’s Business Development Program have gotten the attention of Alaska Native business groups.

The changes to the 8(a) program are small, but could impact Native corporations in multiple ways, according to Chenega Corp. Vice President of Government Relations Kristina Woolston.

An SBA proposal to allow the administration to change a firm’s North American Industry Classification System, or NAICS, code without consent is cause for concern, she said.

A change could be made arbitrarily if a company’s revenue source does not match its code based on data in the Federal Procurement Data System, or FPDS.

It could also impact a firm’s qualification for the 8(a) preferential contracting program.

“Really, there’s incomplete data in FPDS and that’s one of the challenges that we have with this proposed rule,” Woolston said at the Alaska Native Village Corporation Association annual conference.

Woolston also chairs the Native American Contractors Association board, a trade group that supports Native contracting with the federal government.

Specifically to Alaska, she said the SBA should draft a new consultation policy to clarify how government agencies work with Alaska Native corporations, or ANCs.

“There is a need to codify legal obligation with ANCs on the same basis as Tribes and that’s a current deficit in the way that the SBA engages with ANCs,” Woolston said.

The 8(a) Business Development program offers assistance to firms under majority control by socially or economically disadvantaged individuals.

The U.S. Government Accountability Office is currently compiling a report on how the SBA implements and oversees the program, particularly as it relates to Alaska Native businesses. Woolston said that report should be out this summer and is another cause for concern because it appears the GAO is looking into specific contracts. She urged anyone contacted by the office to seek advice from an appropriate village or regional corporation association.

In an effort to respond to program participants, the SBA is also looking at shortening its seven-page program benefits report to two pages, which Woolston said could actually be too short in some instances.

Chenega voluntarily submits annual 50-page reports to the SBA on each of its 8(a) subsidiaries, she said.

“It’s really a narrative of the benefits we provide to our communities in a fairly comprehensive manner,” Woolston said. “We think it’s a good reflection of the complexity of what our native communities require in receiving these benefits from the work that we do.”

A two-page reporting system would not allow companies like Chenega, which draws 95 percent of its revenue from 8(a) contracts, to report all the positive impacts its work has on regional communities, she said.

She encouraged Native government contractors to provide additional feedback beyond the minimum requirements and said industry groups have discussed other ways to provide that feedback in a more structured manner.

The Native American Contractors Association held meetings with roughly two dozen members of Congress at its 2015 outreach summit to discuss the impact of limitations to the 8(a) program and assure the SBA gets appropriate funding to continue it, she said.

“Our NACA members fly in for this and it’s a terrific time to highlight and represent a national interest in our Native-owned community enterprises,” Woolston said.

A positive change could be coming to the mentor-protégé assistance program that is part of the larger 8(a) work, according to Woolston.

The proposal would allow any small business to be a protégé in the program, even those that have graduated from 8(a).

“While it does take away some of the desire of having a Native 8(a) as the protégé, it will then allow us to be a protégé outside of the 8(a) program,” she said.

Businesses can participate in the program for up to nine years.

As a mentor, a business can provide assistance to an 8(a) participant on non-program contracts so the protégé can develop its competitive capabilities, according to the SBA. Mentors can also enter into joint ventures with protégés to help them on certain government contracts.

Elwood Brehmer can be reached at [email protected].

11/20/2016 - 9:00am