Restrictions Eyed for Alaska Native Joint Ventures SBA is considering possible new controls on joint ventures between Alaska Native Corporations and non-8(a) firms, the Government Accountability Office reported. The rapid growth of large sole-source awards to the Alaska firms has ignited criticism in Congress and industry. ANCs are eligible for sole-source contracts in unlimited amounts, while other 8(a) firms are restricted to $3 million ($5 million for manufacturing). Following up on its 2006 report on ANC contracting, GAO said, “SBA is exploring possible regulatory changes that would address the issue of better controlling the award of sole-source 8(a) contracts over the [$3 million limit] to joint ventures between tribally and ANC- owned 8(a) firms and other business concerns.” In its earlier report, GAO found agencies were steering large sole-source deals to ANCs “as a quick, easy and legal method of awarding contracts of any value.” The auditors recommended increased SBA oversight of ANC contracts. (SAA, 5/5/06) In follow-up testimony before the House Natural Resources Committee on Sept. 19, GAO’s Katherine Schinasi said the departments of Energy and Homeland Security have issued new guidance to their contracting personnel on the proper use of sole-source ANC awards. She said Homeland Security recently issued an “acquisition alert” reminding officials that such contracts should be accompanied by “appropriate safeguards to ensure that cost/price is fair and reasonable, that the ANC has the technical ability to perform the work, [and] that the ANC will be performing the required percentage of the work.” Alaska Native companies have argued that their eligibility for large sole-source awards is justified because they distribute a portion of their profits to Native shareholders. The 12 leading ANC government contractors paid $33.6 million in dividends to their shareholders and provided nearly $5.5 million for cultural and social support to Native communities in 2005, according to the Native American Contractors Association. Critics say that, while the sole-source awards may be justified, they are inappropriate as part of the 8(a) program. The Contractors Association reported that 17% of 8(a) contract dollars went to ANCs and tribal businesses in 2005, for a total of $1.9 billion, up from 13% in 2004. Two UCLA law professors wrote in a research paper, “In recent years, ANCs have made strides toward greater participation in the market and are in a better position to take advantage of federal government contracts and 8(a) programs.” But the authors, Duane Champagne and Carole Goldberg, said ANCs receive less than 1% of federal contracts.