Congress Questions Alaska Native Corp. Contracts The House Government Reform Committee has launched a wide-ranging investigation of sole-source awards to Alaska Native Corporations. At issue is whether agencies are using the sole-source contracts to improperly bypass competitive bidding and whether the companies are serving as fronts for large corporations that they hire as subcontractors. The committee chairman, Rep. Tom Davis (R-VA), and ranking Democrat, Henry Waxman (CA), wrote to the secretaries of defense, homeland security and state asking for information on all contracts awarded to Alaska Native firms. They asked the Government Accountability Office to conduct a comprehensive review of ANC contracting. Congress made ANCs eligible for sole-source awards in unlimited amounts under the 8(a) program. Other 8(a) firms may receive sole-source contracts only up to $3 million for goods and services or $5 million for manufacturing. The trade publication Washington Technology reported that eight of the top 25 8(a) contractors in 2004 were either ANCs or tribally owned firms, including four of the top five. In 2000 only two of those companies made the list. “This growth in sole-source contracting raises questions about whether the interests of taxpayers are being protected,” the congressmen wrote. ANCs and tribally owned companies “should welcome a fair and thorough assessment,” said Pamela Mazza, counsel for the Native American Contractors Association, which includes Alaskan firms among its members. She said those firms are bound by the same subcontracting rules as all other small businesses: they cannot subcontract more than 50% of their work. As to the pricing on sole-source contracts, she said the government has “strong negotiators on the other side of the table. They’re not going to award a contract if it’s not reasonably priced.” Any changes in the preference programs would have to get past the tribes’ champion in Congress, Alaska Sen. Ted Stevens (R), who was chairman of the Appropriations Committee until this year and now heads the Defense Appropriations Subcommittee. Citing news reports, Reps. Davis and Waxman asked for documents concerning several large sole-source awards to Alaska firms: *In September 2001 the National Geospatial Intelligence Agency (then known as the National Imagery and Mapping Agency) awarded a 15-year, $2.2 billion IT contract to NJVC, a joint venture of Chenega Corp. and Arctic Slope Regional Corp. *In July 2003 the Army awarded two base security contracts worth up to $500 million each over five years to Alutiiq Security and Technology and Chenega Technical Products. The congressmen wrote, “Much of the actual security, as we understand it, would be provided by their large business subcontractors, which should be capable of obtaining federal contracts through the standard competitive process.” The Los Angeles Times identified the subcontractors as security giants Wackenhut Services Inc. and Vance Federal Security Services. *In 2002 the Customs Service awarded a contract for maintenance of border security equipment to Chenega Technology Services Corp. In 2003 or 2004 the Coalition Provisional Authority in Iraq awarded a $70 million construction and communications contract to Nana Pacific. *Olgoonik Corp. has been awarded more than $225 million for construction work at U.S. embassies and military bases since 2002. In addition to being eligible for unlimited sole-source contracts, Alaska native companies are permitted to create an unlimited number of subsidiaries that also qualify for the 8(a) program. Other 8(a) companies and their affiliates lose eligibility if they collectively exceed SBA size standards. Congress originally enacted the Alaska contracting preferences in 1971 as part of a settlement of the tribes’ claims against the U.S. government. The law treats the tribes as sovereign nations. The chairman of the Native American Contractors Association, Chris McNeil Jr., said in a statement that the program “is working as Congress intended — finally building tribal, sustainable economies that train our people, return a profit to our tribal members (numbering in the tens of thousands), educate Native American children and raise our communities out of poverty.” McNeil is CEO of Sealaska Corp., an ANC. The congressmen’s letters are available at /www.democrats.reform.house.gov/.