Editor's Note: This is the second in a series of articles accompanying the feature "Out in the Cold" in the March issue of Government Executive. The next installment will examine Alaska native corporations' defense of their contracting programs.
Alaska Republican Sen. Ted Stevens' loss in the November 2008 election
could create an opportunity for lawmakers to scale back the contracting
preferences afforded to Alaska native corporations.
godfather of the ANC program, Stevens pushed through a number of
competitive advantages for his home state corporations.
wanted to take on Uncle Ted, because he was such a powerful senator,"
said Guy Timberlake, chief executive officer of the American Small
Business Coalition in Columbia, Md. "Now, with him out of the way, I
think there is going to be much more activity."
others argue that the preferences granted ANCs, including the ability
to win unlimited and uncapped sole-source contracts, have given them an
unfair advantage over other participants in the Small Business
Administration's 8(a) Business Development program.
House Oversight and Government Reform Committee staffer said the
panel's new chairman, Rep. Edolphus Towns, D-N.Y., has heard from
constituents upset about ANC advantages and is exploring legislative
Possibilities include requiring ANCs to abide by the
same sole-source cap as other 8(a) companies -- $3 million for most
types of contracts and $5 million for manufacturing deals, the aide
said. Another option would be legislation to limit ANCs' ability to
form teaming or subcontracting agreements with large corporations. The
corporations are allowed to subcontract work to non-8(a) firms as long
as they perform no more than half the work.
"The real issue is
when an agency does not want to compete a contract and says, 'We can
just give it to an ANC and they will just partner with whoever can do
it, like a big company, and we'll get it done that way,' " the staffer
ANCs also are on the House Small Business Committee's radar. In its January 2009 biennial advocacy agenda,
the committee said it would "examine the role [ANCs] play in the 8(a)
program and ensure that the program's rules and regulations encourage
minority small business growth and development."
face pushback from one of their own. Sen. Mark Begich, who defeated
Stevens in the election, said during a January interview with Government Executive that restructuring the ANC program would be unwise.
this time of creating jobs and opportunities, this would not be a time
to limit that with American-grown companies ... that actually keep
their dividends here in this country," Begich said. "This is one of the
purest American-owned types of companies you can ever get. We talk a
lot about creating manufacturing jobs for America and bringing that
payroll back here. Well, these companies create the payroll here and
produce shareholders here and they produce revenue streams here."
holds some political capital with Democrats, who likely will need his
vote to reach a filibuster-proof majority on other agenda items.
from raw politics, I won this race, and I am sure they would like me to
be here six years from now," he said. "And that means with some of
these issues, I'll need their support."
The House oversight committee aide acknowledged that getting reform measures through the Senate would be a challenge.
contracting preferences have support not only from the Alaska
delegation, but from lawmakers representing areas with large Native
American and Hawaiian populations. Companies owned by Indian tribes and
native Hawaiian organizations receive the same contracting advantages
as ANCs, although they use them less frequently.
trickle to Native Americans or Hawaiians, but [ANCs] lobby them anyway
and whip up support in places with large tribal representation like
Oklahoma or Michigan," the staffer said. "It's frustrating from our end
because no one [else] is actually using that program."