When it comes to winning federal contracts, Alaska Native Corporations have special privileges. And soon, they will also have special reporting requirements.
At a national conference on government contracting in Anchorage this week, top officials from the Small Business Administration are meeting with Native corporation leaders, to develop a new reporting system to show how shareholders benefit.
This comes in response to a government report that found that in many Alaska Native corporations, shareholder dividends lag way behind the growth in profits earned from the SBA’s 8(a) contracting program, which allows minority-owned businesses to win federal contracts without going through a competitive bidding process.
ANC’s say their critics need to look beyond dividends – and instead give them credit for how much service they provide to their shareholders, such as the millions they spend on cultural preservation, scholarships, jobs training and educational programs, as well as community projects.
Ron Perry, who is president of the National 8(a) Association, believes the new reporting requirements might be helpful.
“There is nothing to hide,” says Perry, who is also president of Teya Technologies, a subsidiary of the Salamatof Native Association, a village corporation from the Kenai Peninsula.
“We’re going to do good work. We’re going to provide good benefits, and we’re going to show and prove that we are doing, as per the legislation, what it was intended to do,” said Perry.
Perry says ANC leaders do worry that the federal reporting process may not only be costly and cumbersome, but also that the data could easily be misinterpreted.
“If you’ve got a business starting up, it takes three years to break even,” says Perry. “You’re not going to provide any meaningful benefit to your shareholders potentially in that period of time.”
The SBA’s deputy director, Marie Johns, says she’s impressed with what she’s seen so far. On Monday, Johns took a trip to Tatitlek in Prince William Sound to see how its Native corporation puts 8(A) profits to work.
“There has been real attention paid to the technological in infrastructure. Every home in the village has internet access,” said Johns. “With connectivity, now more than ever, a small business person who has an idea or an interesting product and a great website, can literally market that product or service anywhere in the world through the internet.”
The SBA’s procurement attorney, John Klein, is also here for the 8(A) conference. He says there have been Native corporations which have abused their government contracting privileges, but have not necessarily broken the law. Since then, the SBA has tightened regulations -- and violators, along with the companies that are sub-contractors, can be kicked out of the program.
Klein says this latest effort to document the service Native corporations provide to shareholders is aimed at preventing abuse of the program and may lead to a better of understanding of how to define success beyond just receiving a dividend.
