Pending Legislation Affecting Alaska Native Corporations

Indian Country Today has a story on Sen. McCaskill's (Missouri) renewed effort to bring changes to the manner in which the Government contracts with ANCs (Alaska Native Corporations). Earlier this month, Sen McCaskil announced that she will be continuing her efforts to crack down on waste and abuse in contracting by introducing legislation to eliminate the unique government contracting preferences and loopholes for ANCs. This announcement followed a September article from the Washington Post that listed a number of alleged improprieties surrounding ANC contracts.  If you read the Washington Post chronology however, you will realize that the so-called improprieties are not because of actions by the ANCs themselves but more an issue with the contracting community using ANCs to ease their own administrative processes. To a lesser extent, there is some concern that the contracting preferences afforded to ANCs is not delivering sufficient social benefits back to Alaska natives.

McCaskill’s office said the Post’s reports were an impetus for her legislation, which has the following goals:

• Eliminate the ability of ANCs to receive sole-source contracts exceeding the caps applicable for other 8(a) participants of $3.5 million for services or $5.5 million for goods;
• Eliminate the automatic designation of ANCs as socially disadvantaged business enterprises, requiring ANCs to demonstrate their social disadvantage by providing evidence of “racial or ethnic prejudice or cultural bias within American society because of their identities as members of groups;”
• Eliminate the automatic designation of ANCs as economically disadvantaged, requiring any ANC seeking to participate in the 8(a) program to demonstrate that corporation’s economic disadvantage upon entering the program;
• Require ANCs to count all affiliates and subsidiaries in size determinations for 8(a) eligibility, which shall be limited to no longer than nine years, as is required for other 8(a) participants;
• Require ANCs who choose to participate in the 8(a) program to own a majority interest in only one 8(a) subsidiary at any one time;
• Require ANCs who choose to participate in the 8(a) program to be managed by individuals who qualify as socially and economically disadvantaged under the program, as other 8(a) participants must do; and
• Prohibit ANCs who chose to participate in the 8(a) program from operating as pass-throughs to non-Native companies that do not qualify under the 8(a) program.