Defense Dept. Reviewing Alaska 8(a) Contracts The Defense Department has ordered a review of its sole-source contracts with Alaska Native 8(a) firms in the wake of the Army Corps of Engineers kickback scandal. The memo from Richard Ginman, director of defense procurement and acquisition policy, instructs buying agencies to review 8(a) sole-source awards above $20 million and explain what is being done to guard against abuse. An executive of Alaska 8(a) firm Eyaktek has been indicted along with two Corps of Engineers officials and another man in what a federal prosecutor called “one of the most brazen corruption schemes in the history of federal contracting.” (SAA, 10/7) The defendants are charged with steering subcontracts from Eyaktek to another 8(a) company and accepting $20 million in kickbacks. All have pleaded not guilty. Senators Claire McCaskill, D-MO, and John McCain, R-AZ, asked for the DOD review last month. They said Eyaktek’s ability to receive a large sole-source award was “apparently key to facilitating this alleged fraud.” Alaska Native Corporations and companies owned by Indian tribes and Native Hawaiians are eligible for 8(a) sole-source contracts in unlimited amounts. Sole-source awards to other 8(a) firms can be no larger than $4 million, or $6.5 million for manufacturing. Since March a new rule requires agencies to execute a justification and approval for any 8(a) sole-source contract over $20 million. Ginman directed defense components to determine how many sole-source contracts above $20 million were awarded before the rule took effect; whether justifications were executed; the percentage of work done by the 8(a) firm; and the amount paid to subcontractors. He also told agencies to “[d]escribe measures that have been taken or will be taken to ensure there is no abuse of these types of contracts.” The directive was first reported by Federal Computer Week. For “small value low profile contracts,” Ginman instructed agencies to identify what controls they have in place to prevent manipulation of a source selection board to favor a particular contractor. The alleged conspirators in the Army Corps case are charged with trying to fix a source selection on another contract. Sen. McCaskill has introduced legislation to abolish the large sole-source awards to Alaska Native firms and put them on equal footing with other 8(a)s. No vote on the bill has been scheduled.