What are Alaska Native Corporations (ANCs)

Congress passed the Alaska Native Claims Settlement Act of 1971 in response to a rise in native activism and pressure from oil companies to smooth the path for a trans-Alaska pipeline after oil was discovered in 1968. The act allotted 40 million acres of land for division among 12 regional native corporations and 220 village corporations. The law was intended to settle longstanding land claims by Alaska natives and provide economic opportunities. Alaska natives and descendants born before 1971 were allowed to receive 100 shares in their village corporation and regional corporation.

In 1975, a 13th corporation formed to represent Alaska natives residing outside the state. Over the years, some village corporations merged with each other or with their regional corporation. Today there are 198 village corporations, according to the Alaska Division of Banking and Securities.

In 1986, Congress passed legislation that allowed ANCs to participate in the Small Business Administration’s disadvantaged business program, known as the 8(a) program, which sets aside federal contracts for minority-owned or other disadvantaged companies. With strong advocacy from Alaska Sen. Ted Stevens, Congress later extended to ANCs additional special 8(a) benefits, such as the ability to win no-bid contracts for any amount and to own multiple subsidiaries in the program. Other participants do not have those advantages.

BENEFITS and REASONS TO SELECT and WORK WITH AN ANC 8(a) COMPANY

THE HIGHLIGHTS

Absence of a Sole-Source Dollar Threshold – 13 C.F.R. 124.506(b)

(b) SBA may award a sole source 8(a) contract to a Participant concern owned and controlled by an Indian tribe or an ANC where the anticipated value of the procurement exceeds the applicable competitive threshold if SBA has not accepted the requirement into the 8(a) BD program as a competitive procurement. There is no requirement that a procurement must be competed whenever possible before it can be accepted on a sole source basis for a tribally-owned or ANC- owned concern, but a procurement may not be removed from competition to award it to a tribally-owned or ANC-owned concern on a sole source basis

Economically Disadvantaged – 13 C.F.R. 124.109(a)(2)

(2) An ANC that meets the requirements set forth in paragraph (a)(1) of this section is deemed economically disadvantaged under 43 U.S.C. 1626(e); and, need not establish economic disadvantage as required by paragraph (b)(2) of this section.

Non-Challenged 8(a) Sole Source Award-13 C.F.R. 124.517(a)

(a) The eligibility of a Participant for a sole source or competitive 8(a) requirement may not be challenged by another Participant or any other party, either to SBA or any administrative forum as part of a bid or other contract protest.

Special Rights Under the A-76 Program

The A-76 program (“A-76” refers to the number of the implementing Office of Management and Budget (OMB) Circular) imposes a long and cumbersome procedure for any government facility that wishes to contract out (i.e., outsource) an activity that employs ten or more civilian government employees. (The average A-76 study takes 23 months.) One of the few options open to a DOD command, service or agency that wants to contract out a function but avoid the cumbersome A-76 process is to award the contract to a tribal or ANC 8(a) firm.

Language in the Defense Appropriations Act3 provides that a command does not have to go through the A-76 process but may do a direct conversion of that function to a private contractor, regardless of the number of civilian employees, if the command contracts with a firm that is 51% or more Native American owned, so long as the conversion is cost effective. While this opportunity is available to any 51% or more Native American owned firm, in practice it is only available to tribal and ANC 8(a)s on the larger conversions, because the Appropriations language does not create a new procurement vehicle. As a result, the only way the command may contract with a Native American firm is to do it through the 8(a) sole source authority. As indicated above, the only entities that may receive an 8(a) contract in excess of $3 million for services are tribal and ANC-owned 8(a) firms and the bulk of the A-76 contracts are far in excess of $3 million.

DOD Indian Incentive Program–The 5% Subcontracting Bonus– DFAR 252.226-7001

A DOD contractor that subcontracts with a firm that is 51% or more Native American owned is entitled to receive a bonus equal to 5% of the amount of the subcontract award. While this provision is theoretically available to all agencies, Congress has provided appropriations to implement it only to DOD, which, after some initial resistance, has initiated it fully (out of the DOD Office of Small and Disadvantaged Business Utilization). Defense Appropriations Acts provided $15 million to this program in FY 2005. DFAR states: (f)(1) The Contractor, on its own behalf or on behalf of a subcontractor at any tier, may request an incentive payment in accordance with this clause.