Alaska 8(a) Companies Face Congressional Scrutiny A Senate oversight panel is collecting financial information about Alaska Native Corporations in preparation for a hearing this summer on the corporations’ 8(a) procurement preferences. Sen. Claire McCaskill, D-MO, chairwoman of the Homeland Security and Governmental Affairs Subcommittee on Contracting Oversight, said she has written to CEOs of 20 Alaska firms requesting data going back to 2000. Among other things, McCaskill asked for: •A list of the corporations’ 8(a) subsidiaries, including joint ventures and other affiliates; •The number of shareholders and employees, with a breakdown of employees who are also shareholders; •Compensation of executive officers and board members; •Revenue, gross profit and other financial data for each of the nine years; •Revenue from federal contracts and subcontracts, and a list of those awards; and •Dividends and other benefits paid to shareholders. McCaskill’s subcommittee has scheduled a hearing July 16 on contracts awarded to the corporations through the 8(a) program. Alaska Native Corporations are permitted to receive sole source 8(a) contracts in unlimited amounts; other 8(a) firms are limited to sole source awards up to $3.5 million, or $5.5 million for manufacturing. Government Executive magazine reported this spring that corporations’ federal contract awards rose to $5 billion in 2008, almost 10 times as much as they received in 2000. The study found that about two-thirds of the contracts over the past nine years were sole source awards. The companies have argued that their contracting preferences are justified because they distribute the bulk of their profits to Alaska Native shareholders and communities. But several members of Congress from both parties have urged that the Alaska preferences be separated from the 8(a) program. The Government Accountability Office found that ANCs received 13% of 8(a) contract dollars in 2004. In an effort to mend fences with other 8(a) firms, an organization of Alaska companies, the National 8(a) Association, began an outreach program last year. It signed memorandums of understanding with the National Black Chamber of Commerce and the Alaska Veterans Business Alliance, agreeing to work together on teaming, subcontracting and joint ventures. (SAA, 6/13/08) Former Alaska Senator Ted Stevens sponsored the 8(a) set-asides for ANCs in 1986 and was the corporations’ most powerful protector in Congress. Stevens was defeated for re-election last fall. Alaska’s current senators, Republican Lisa Murkowski and Democrat Mark Begich, expressed “great concern” about the inquiry. In a letter to McCaskill, they said, “While we welcome fair and just oversight of the Native American 8(a) program to ensure its integrity, transparency and accountability, we are also concerned that ANCs will be inadvertently harmed.” The Alaska senators said SBA’s inspector general is auditing the companies’ contracting practices and SBA is considering an overhaul of rules governing Alaska Native contracting.