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Bill Would End Alaska 8(a) Preferences

Sen. Claire McCaskill has introduced legislation that would end Alaska Native Corporations’ procurement preferences.

McCaskill, D-MO, said the bill would put the Alaska firms on equal footing with other 8(a) companies.

“We’ve seen that a very small portion of these companies’ profits are reaching native Alaskans, so it’s time to acknowledge the fact that this program is not effective for either native Alaskans or taxpayers,” McCaskill said in a statement. 

Alaska’s members of Congress have said they will fight the bill.

Key provisions of the bill:

· Alaska companies would no longer be allowed to receive sole source contracts in unlimited amounts. They would be limited to $3.5 million ($5.5 million for manufacturing), the same as other 8(a) firms. Several investigations have found evidence that the Alaska companies were passing through most of the work on large contracts to non-8(a) firms.

· ANCs would no longer be automatically designed as socially or economically disadvantaged business enterprises. To participate in the 8(a) program, they would have to prove their disadvantage, as is required for other 8(a) participants;

· ANCs would be allowed to own a majority interest in only one 8(a) subsidiary at a time, like other 8(a) businesses. Currently the Alaska companies are permitted to create an unlimited number of 8(a) subsidiaries.

· Alaska companies would have to count all affiliates and subsidiaries in determining whether they qualify as small businesses.

· Alaska 8(a) companies would have to be managed by individuals who qualify as socially and economically disadvantaged, as other 8(a) participants must do.

· Alaska 8(a)s would be prohibited from operating as pass-throughs to non-Native companies that do not qualify under the 8(a) program.

With Congress scheduled to spend no more than a few weeks in the current lame-duck session, prospects for passage of the bill are uncertain.


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