Alaska Native corporations are pulling in their share of federal government contracts, converging as contenders in the U.S. marketplace.
Ventures run the gamut, ranging from providing security for military bases across the nation to refurbishing office buildings in Brazil.
In 2004, Native corporations made an effort to focus more attention on opportunities in the government sector and it worked. From fiscal year 2000 to 2004, the federal government awarded $4.6 billion in contracts to Alaska Native corporations, according to the Government Accountability Office. The contracts are diverse, often requiring work at an international level. Barrow-based Arctic Slope Regional Corp. secured a $50 million government contract to train security guards in Iraq, and Ahtna Inc., based in Glennallen, took on an $80 million venture to install communication equipment in the former Soviet Union.
A healthy amount of government contracts also go to Native corporations on a statewide level. Of the $550 million in Alaska's federal contracts, $209 million went to small businesses in 2006. Eighty percent of those small business contracts went to Native corporations, according to the U.S. Army Corps of Engineers' Alaska District.
A high percentage of government contracts to Native corporations are awarded through the Small Business Administration 8(a) program. In 1986, legislation passed allowing Native corporations to participate in the 8(a) program. Congress also extended special advantages to Native corporations, such as the ability to win sole-source contracts for any dollar amount. The system is designed to help developing small businesses owned by socially and economically disadvantaged entities. By all accounts, it appears to be working. Of the $4.6 billion awarded to Native corporations in fiscal years 2000 to 2004, $2.9 billion went through the 8(a) program, according to the GAO.
Alutiiq LLC, a holding company for Kodiak-based Afognak Native Corp., is prime example of how Native corporations are using the 8(a) program as a tool to succeed. Alutiiq secured and completed a $54 million contract through the 8(a) program to renovate office buildings in Sao Paulo, Brazil. The project, which was a joint venture with Fluor Federal Services, created more opportunities for Alutiiq.
“Through that contract we had the opportunity to partner with a larger corporation and learn a lot of skills necessary to vantage a remote construction project internationally; and now, today, construction is one of our largest divisions,” said Sarah Lukin, public relations manager for Afognak Native Corp. and Alutiiq. “In many respects, this project positioned us to become a viable competitor of Fluor and other large government contracting companies in the future.”
Alutiiq's experience in the construction industry led to a $48.5 million project to build barracks and other facilities for the newly assigned 4th Brigade Combat Team, 25th Infantry Division at Fort Richardson. The Corps of Engineers Alaska District recognized Alutiiq for its work on the project through the 2006 Celebrate Safety Contractor of the Year Award.
“We've had a high degree of success with these firms as we have with a lot of other firms up here, and they are a really important part of our business base, and frankly they are doing some fantastic work,” said Chris Tew, chief of the contracting division for the Corps of Engineers' Alaska District.
During the construction project at Fort Richardson Army Post, Alutiiq employed 50 Alaskans, 33 of which were shareholders, thus supporting their mission to benefit Alaska communities. In 2005, Afognak Native Corp. earned profits of $19.3 million, providing shareholders with $10.8 million in dividends, along with scholarships and donations for cultural program support.
“The 8(a) program is working exactly as Congress intended. Alaska Native corporations are learning to compete in the federal marketplace and bring the benefits back to Alaska,” Lukin said.
The GAO launched an investigation into 8(a) practices because of concerns over high-dollar government contracts awarded to Native corporations. A 2006, a final report by the GAO found no evidence of wrong-doing but did recommend more oversight by the SBA.
