A word from the president: Reform 8(a) rules to save and improve the program

By: Margie Brown, CIRI president and CEO

There has been a lot of discussion in the news and in Washington, D.C. lately about Alaska Native corporation 8(a) contracting and whether or not the program is working, should it be reformed or just thrown out. The tone and volume of the talk picked up this month when Sen. Claire McCaskill (D-Mo.) and Rep. Bennie Thompson (D-Miss.) introduced companion bills in the U.S. Senate and House to strip away contracting advantages from the Small Business Administration’s (SBA) 8(a) federal contracting program citing the need to protect Alaska Native people and reduce government spending waste as the reasons for the proposed legislation.

Protecting Alaska Native interests and reducing waste are commendable goals, however, the proposed bills do not advance these ends, rather they do damage to them. Sen. McCaskill and Rep. Thompson appear to use handpicked incidents and a broad brush to sweep Alaska Native corporations and the benefits they provide their shareholders under the rug. Eliminating economic opportunities for every Native American in the country (while also attempting to rewrite parts of the Alaska Native Claims Settlement Act) works to the detriment of Alaska Native people.

The SBA’s 8(a) business development program is one of the key government preference programs that many minority-owned or disadvantaged companies, including Alaska Native corporations, use to grow their business by getting preferential consideration for certain federal procurement contracts. The program is not an entitlement. Rather, it increases fairness by creating opportunities for disadvantaged companies to win federal contracts that would likely otherwise go to large, well-established national and global business enterprises.

Congress passed Alaska Native Claims Settlement Act in 1971 to settle Alaska Natives’ aboriginal claim to vast stretches of land. In structuring the settlement, Congress chose a unique approach, one that was designed to stimulate economic development for Alaska Native people. The Act created 12 Alaska Native regional corporations and more than 200 village corporations and made more than 80,000 Alaska Native people the owners of these corporations. Congress recognized the challenges these newly-formed entities faced and acted to support the growth and development of these Alaska Native corporations by rightfully designating them socially and economically disadvantaged minority-owned enterprises, and by allowing participation in programs designed to assist such enterprises.

The level of contracting by Alaska Native corporations using the procurement preferences allowed in the SBA 8(a) program has grown dramatically during the past decade. Government officials responded to this 8(a) contracting growth by Alaska Native corporations by reviewing the program to ensure it was meeting Congressional policy goals. The Government Accountability Office, the investigative arm of Congress, recommended rule changes last year to improve program oversight. The SBA also proposed rule changes and Sen. McCaskill, as Chairman of the Subcommittee on Contracting Oversight, launched an SBA 8(a) contracting investigation. Most recently, Sen. McCaskill and Rep. Thompson have introduced legislation in the U.S. Senate and House of Representatives respectively.

CIRI, Arctic Slope Regional Corporation and Doyon, Limited joined together to propose an 8(a) program reform package that we submitted to the SBA in September to protect Alaska Native corporations’ ability to participate in the SBA 8(a) program. Our reforms would build on proven SBA 8(a) program success by promoting more competition, strengthening enforcement against companies and individuals who violate program rules and requiring companies to track and report shareholder benefits derived from SBA 8(a) contracts. You can review this package at https://www.ciri.com/8a.

Alaska Native corporations use the SBA 8(a) program to promote economic development that benefits thousands of Alaska Native shareholders and the entire state of Alaska. It is a good idea to discuss reforms that will improve the SBA 8(a) program, but it is not an improvement to negate Congress’ purpose and intent that support the Alaska Native Claims Settlement Act and the minority-owned enterprises the Act created. CIRI, ASRC and Doyon have proposed responsible reforms that we believe will improve the program and we stand ready to work with the SBA and Congress to implement them.