Earlier this year, I wrote about how Alaska Native Corporations are gaming the 8(a) small business development program and getting money for nothing.
For too long, ANCs have operated in the shadows. So it’s heartening to report during Sunshine Week that their good thing is slowly coming to an end.
Effective yesterday, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration must justify sole source contracts over $20 million. It’s an interim rule but it’s a start.
While ANCs are not singled out, they are the target. Government Executive reports:
The regulatory change, which was required in the 2010 Defense Authorization bill, could have serious implications for Alaska native corporations, which, along with Indian tribes and Native Hawaiian organizations, are eligible to receive 8(a) contracts of any value. All other 8(a) participants are capped at receiving sole-source contracts of $3.5 million for services and $5.5 million for manufacturing.
Ostensibly, the rule is designed to prevent ANCs from passing most of the work on big-budget contracts through to large subcontractors. While the new provision technically refers to all 8(a) contractors, Obama administration officials concede the rule affects tribes, ANCs and NHOs most directly.
I was at the museum to attend Digital Music Forum East, an annual gathering of music executives, content creators, thought leaders and influencers. The discussions focused on the intersection of music and technology.
Jobs were on the agenda. The speakers lamented the disruptive impact of technology and social media. Since the advent of Napster, there has been a steady decline in revenue. Although consumers are willing to pay for web-based entertainment such as Netflix and gaming, their price point for music is free.
To be sure, technology has disrupted other industries, including television, newspaper and publishing. And word up, you can “wave your hands in the air like you don't care.” But that's not a sustainable business model.
We're going to have to up our game in this newly competitive world. And that means that we've got to out-educate every other country in the world. We're going to have to out-innovate every country in the world. We've got to make sure that we've got the best infrastructure to move people and goods and services throughout the economy.
Indeed, every business will have to up their game if they want to compete in the age of Web 2.0. That includes minority-owned businesses.
Innovation and competitiveness, the cornerstones of the 21st century economy, are essential ingredients for minority businesses to achieve present and future prosperity.
As we enter the second decade of this millennium, we believe that it is time for us to acknowledge and do something about the sobering fact that our real economic and education progress is not commensurate with the new and dynamic opportunities inherent in the global “Innovation Economy.”
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.
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.
A new report by the White House Council of Economic Advisers found that the American Recovery and Reinvestment Act “was responsible for 2.2 to 2.8 million jobs through the first quarter of 2010.”
In a statement, Vice President Joe Biden said:
Bolstering the purchasing power of middle class families through Recovery Act tax relief and financial assistance hasn’t just helped the hardest-hit among us – it’s also created over 1 million good American jobs. From tax cuts to construction projects, the Recovery Act is firing on all cylinders when it comes to creating jobs and putting Americans back to work.
When the Recovery Act was signed, the black male unemployment rate was 17.9 percent. The Bureau of Labor Statistics reported the jobless rate for black men was 20.2 percent in March.
An investigation by City Limits looked at the impact of stimulus spending on reducing black unemployment. Prof. C. Nicole Mason, executive director of the Women of Color Policy Network, told the magazine:
I don’t think there was enough understanding of what was going on in communities of color. I don’t think that happened on the first go-round. In the first stimulus bill they targeted construction, infrastructure. If you looked, you saw right away that blacks were underrepresented in those industries. And black- and Latino-owned firms have received disproportionately small shares of stimulus work.
Mason added:
I don’t think we can cut the unemployment rate in half without addressing some of the structural, historical barriers. There’s just no way around it. We really just have to roll up our sleeves and say, “What is going on here that’s different than the general population?” It’s not just that people aren’t building houses anymore. It’s a longer, more insidious problem that we haven’t had the opportunity to address. Maybe now we do.
The discussion will focus on the challenges and, more important, the solutions. The forum will be held at Medgar Evers College, 1650 Franklin Avenue in Brooklyn.
Last week, the U.S. Department of Transportation held a two-day summit to help disadvantaged business enterprises (DBEs) compete for stimulus-funded contracts.
We’ve made significant strides over the last year in reaching out to small businesses around the country and providing the tools they need to compete and to thrive in this tough economy. The contracts we have awarded have kept a lot of small businesses going and many jobs were saved or created.
In an interview with TV One’s Roland Martin, LaHood was asked what is being done to ensure implementation of the American Recovery and Reinvestment Act is fair and equitable.
While touting the contracts awarded to date, LaHood said “we’re going to step it up”:
But – but we need to do better. We need to communicate more. I’ve – I’ve talked to the governors. The governors need to make sure that disadvantaged businesses know when they have the money and are ready to spend it. And we – we’re really going to – we’re going to step it up. Part of our job is to step it up and to get the information out to folks.
[…]
I talked to them [governors] when they were here in Washington for their annual governors meeting. I told them, “You need to get this information out,” and we’re going to continue to work 24/7 until every disadvantaged, women-owned business has the information about what money is in the states and how they can access it and how they can put people to work.
I want to give a shout-out to Roland. While so many African American leaders and advocates are scared to speak up, Roland has been a consistent voice for using “political power to advance economic power.”
At a press conference at the Newseum in Washington, DC, the National Urban League released its annual report, “State of Black America 2010: Responding to the Jobs Crisis,” a fact-based analysis of the problems facing the African American community and innovative solutions to address joblessness and minority business development.
What is at stake for black America in 2010? We are at a time of, one, crisis. And we are at a time of crossroads … We are at a time of crisis because we cannot yield a blind eye…to the manner in which this recession has affected our community.
[…]
We’re here today because we want to send the most powerful message, the strongest message possible. That a nation that can invest trillions of dollars bailing out banks on Wall Street can and should pass a jobs bill that helps out-of-work Americans.
Morial called for targeted programs and initiatives to help the chronically unemployed.
A new report from the Joint Economic Committee found that “though African Americans make up 11.5 percent of the labor force, they account for 17.8 percent of the unemployed, 20.3 percent of those unemployed for more than six months, and 22.1 percent of the workers unemployed for a year or more.”
He debunked the notion of a “black jobs bill.” Instead, emphasis should be placed on communities where the unemployment and poverty rates are high:
If the Department of Transportation doesn’t enforce its minority business goals and the Department of Labor doesn’t fund apprenticeship programs so that people in our communities [can get jobs], than these initiatives could bypass our communities. We cannot yield on the principle that targeting is a very important part of policy.
Morial questioned how we can commit $53 billion for a reconstruction plan for Baghdad, but there’s no money to put people to work in Baltimore, Boston and Binghamton:
If you can do it for Baghdad, why not cities right here? If you can do it for the banks, why not do it for the cities … It’s time for Washington and America to focus on jobs, jobs, jobs.
He asked his members to contact their representatives and urge them to co-sponsor the “Local Jobs for America Act” (H.R. 4812), which would create or save one million jobs in the hard-hit communities:
Our voices need to be about a plan. But they also need to be about priorities. America has to be about the priority of putting people back to work.
This morning, President Obama will sign the “Hiring Incentives to Restore Employment (HIRE) Act,” which will give employers a $1,000 tax credit for each new worker who stays on the payroll for at least one year.
Senate Majority Leader Harry Reid said “this is really a good bill. It cuts taxes. Small businesses will have their taxes cut so that they can hire people to go to work now.”
CBC Chairwoman Barbara Lee outlined the report’s key findings:
African American men have been especially hit during this recession, with nearly 1 in 5 facing unemployment.
African American women have seen their unemployment rate jump from 7.1 percent in February 2007 to 13.1 percent in February 2010. And African American female heads of household, who bear the sole financial responsibility for their families, have an even higher unemployment rate of 15.0 percent.
African American workers of all ages are experiencing higher unemployment rates than the overall population, but younger workers have been especially hard hit during this recession. More than 2 out of 5 African American teenagers are unemployed, compared to an overall teen unemployment rate of slightly over 25 percent.
While having at least a college degree has usually been an effective shield against unemployment, African Americans with a 4 year college degree have an unemployment rate of 8.2 percent, almost double the unemployment rate for white workers (4.5 percent) with a similar level of education.
African Americans have experienced longer stretches of unemployment than the general population. Although African American workers make up only 11.5 percent of the labor force, they account for more than 20 percent of the long-term unemployed, and make up 22 percent of workers who have been unemployed for over a year. The median duration of unemployment for African American workers has risen from less than 3 months before the recession began to almost six months.
