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Contracting Rules Take Bite Out of Alaska Native Corporation Profits

Published On: Dec 18 2013 06:45:00 PM AKST

Many of Alaska's Native Corporations operate in multiple states and countries around the world under contracts with the federal government. But new rules concerning how some large contracts are awarded... are having big consequences for native corporation profits.


Alaska Native Corporations say new rules for bidding on sole source federal contracts are taking a bite out of profits.

The corporations can receive federal contracts without competition under section 8(a) of the Small Business Act; however, the rules have changed regarding contracts worth 20 million dollars or more.

The changes were made in 2010, among them the requirement that use of a sole source contract be in the best interest of the agency concerned. Native American contractors say they are now seeing the impact of the change, reporting a 60% decline in contracting revenue and lost jobs and benefits for Native Americans.

The Chugach and Afognak Corporations say they've seen significant losses and it's having consequences at home.

“That impact is being felt at home, whether it's jobs, it's natives or non natives, it's shareholders through scholarships, through dividends apprenticeship programs etcetera,” said Gerad Godfrey, the Director of Corporate Affairs at AFOGNAK.

Not everyone is complaining. The Associated General Contractors of America says competition for contracts results in a better price and product for tax payers.

“We support competition. We understand the benefit that it brings sole sourcing is not something that we necessarily agree with unless you have a situation where there's an emergency need,” said AGCA Director of Government Affairs.

An attempt by Congressman Don Young to change the new rules for federal contracts over $20 million dollars last June was unsuccessful.