anc contracting & the 8(a) Program

Alaska Native Corporations (ANCs) and Tribes participation in the 8(a) Program is a component of meeting the Federal Government’s trust responsibility to provide for a sustainable Native economy as required by treaties, the Constitution, statutes, and court cases.

The Small Business Administration (SBA) 8(a) Business Development Program was enacted in 1958 to help small disadvantaged businesses compete in the American economy, and more specifically, in the Federal contracting arena. To qualify for this Program, a firm must be a small business, unconditionally owned and controlled by one or more socially and economically disadvantaged individuals, and demonstrate a potential for success.

Under the SBA’s 8(a) Program, a small disadvantaged business is defined as one that is at least 51% owned by one or more individuals who are both socially and economically disadvantaged.

A Federal agency can award a contract to an 8(a) company without competition if it meets certain criteria. Congress made a distinction because unlike other minority or disadvantaged-owned businesses where profits generally go to one individual or one family, the profits from ANCs and Tribes are shared by hundreds – sometimes even thousands – of tribal members or Native shareholders.

Section 8(a) does not give an advantage to an unqualified or under-qualified company, nor does the 8(a) Program guarantee a contract; it only makes ANCs and Tribes eligible for a contract. For any 8(a) company, participation is limited to 9 years maximum, during which there is a required phase-in of competitive work.

The 8(a) Program provides an incubation period enabling these companies to enter the marketplace and demonstrate the ability to perform; after that, they are on their own. The 8(a) provisions have enhanced the effect of ANCSA, namely making government contract opportunities available to qualified ANCs as part of the settlement.

ANCs’ and Tribes’ annual revenues, ability to pay dividends, provide scholarships, support cultural programs, and create job opportunities for our tribal members, shareholders, and their families is an indication of the success of ANCSA and the 8(a) Program – Federal Indian policies that work.

Cultural, Social and Economic Benefits of Government Contracting and the 8(a) Program for Alaska Natives and the Economy The following results are combined figures for  the thirteen regional ANCSA Corporations and two Village ANCSA Corporations, Alutiiq and Chenega, which are significant participants in Government contracting.*

 

** These figures are based on self-disclosures by the 13 ANCSA regional corporations and two village corporations.
1 The number of shareholders were determined in 1971 but each regional corporation has the discretion to add shareholdersborn after 1971. Also, the number of shareholders consistently grows over time. Although there is generally
not a substantial increase from each year to another, as shareholders “will” and “gift” their shares to their descendants thenumber of shareholders increases.

2 Each ANCSA corporation distributes its profits to its shareholders, which is determined by the Native Board of Directors.
There is a wide variety in distributions. For example, one village corporation was able to distribute $8.7 million individends to 640 shareholders, while a regional corporation who is just beginning in Government contracting was unable to distribute a dividend to its 6,000 shareholders in 2004.

3 Does not include Permanent Fund or Akilista Fund Programs valued at $81.6 Million.

4 Data represents revenues from all types of government contracts, including, but not limited to: 8(a) and Full and Open awards

These figures are based on self-disclosures by the 13 ANCSA regional corporations and two village corporations. The number of shareholders were determined in 1971 but each regional corporation has the discretion to add shareholdersborn after 1971. Also, the number of shareholders consistently grows over time. Although there is generally
not a substantial increase from each year to another, as shareholders “will” and “gift” their shares to their descendants thenumber of shareholders increases.