From Day One, I have been tracking stimulus spending and minority business enterprises. To date, the total value of federal stimulus contracts awarded to 8(a) firms is roughly $2.7 billion, including $1.5 billion in sole source contracts.
Alaska Native Corporations have received a disproportionate number of 8(a) contracts. A ProPublica analysis found that through September, ANCs have received $832 million in direct stimulus contracts:
Through September, ANCs had won stimulus contracts worth $823 million for 742 projects, according to the most recent government data. More than 350 projects, or nearly half, rely on subcontractors to do at least some of the work.
By comparison, all other stimulus contractors subcontracted more than 5,600 of nearly 26,000 stimulus projects, or 22 percent. Other minority-owned firms hired subcontractors on 33 percent of their projects.
The stimulus reports suggest that ANC subcontracting sends a substantial portion of revenue to outsiders. Of the $470 million in ANC stimulus projects that are at least halfway completed, native corporations awarded about $200 million to other contractors, ProPublica found.
ANCs play by a different set of rules. A 2009 investigation by the Senate Subcommittee on Contracting Oversight found a majority of ANCs exceed 8(a) size requirements.
ProPublica notes “ANC subsidiaries have come to dominate the SBA program”:
While other firms in the program have a limit of $3.5 million on contracts for services and $5.5 million on contracts for goods, ANCs are exempt and have won awards exceeding $100 million.
The exemption makes ANCs a potentially lucrative partner for large firms acting as subcontractors. And government contracting officers turn to ANCs to avoid lengthy competitions and meet their small business contracting goals. ANCs also may compete for contracts.
And get this: While other minority firms have a nine-year limit on participation in the 8(a) program, ANCs can stay in perpetuity. In fact, ANCs are among the largest federal contractors.
If you agree with Senate Subcommittee on Contracting Oversight Chairman Claire McCaskill that ANCs' “contracting preferences also create the potential for waste, fraud, and abuse,” make some noise.
The new sheriff in town, House Oversight & Government Reform Committee Chairman Darrell Issa, wants to hear from you.
Let Issa know ANC's unfair competitive advantage hurts your ability to create jobs.