October 24, 2014

New bill would strip some corporations of contracts under SBA’s 8(a) program

AP PHOTO / Mark Thiessen  U. S. Sen. Lisa Murkowski, R-Alaska is seen during an interview her office in downtown Anchorage, Alaska on Tuesday, April 19, 2011. Murkowski says she does not believe there is enough support in Congress to pass legislation that seeks to strip Alaska Native corporations of the advantage they enjoy in obtaining federal contracts worth billions.  ANCHORAGE, Alaska (AP) – U.S. Sen. Lisa Murkowski said April 19 she does not believe there is enough support in Congress to pass legislation that seeks to strip Alaska Native corporations

of the advantage they enjoy in obtaining federal contracts worth billions of dollars.

The Alaska Republican told The Associated Press that new, tighter oversight rules governing a Small Business Administration program should be allowed to work, rather than target the corporations, as the bill sponsored by Sen. Claire McCaskill, a Missouri Democrat, seeks to do.

Murkowski acknowledged there was need for such reforms to the program, which has been blamed for creating a system ripe for abuse that led to federal audits and the overhaul of the rules.

“Let’s see if these regulations that have been promulgated, how they provide for that level of accountability that we’re all looking for,” Murkowski said.

McCaskill’s bill, among other changes, would strip Alaska Native corporations of contracts with no monetary caps under the SBA’s 8(a) program, which is designed to help small disadvantaged firms, including those run by American Indian tribes and Hawaii Natives. The same legislation also has been introduced as an amendment in a bill dealing with small-business innovation.

McCaskill, a former auditor, has said only a small portion of ANC profits are reaching their shareholders.

The SBA rules “don’t go far enough,” said McCaskill spokeswoman Maria Speiser.

“The regulations do not crack down on creation of subsidiaries by ANCs and don’t require that ANCs prove economic or social disadvantage as other 8(a) participants,” Speiser said in an email to the AP. “McCaskill’s legislation would put ANCs on equal footing with other 8(a) participants.”

Under the bill, the corporations would still be able to participate in the SBA program, but they would no longer receive the unprecedented benefits ushered through Congress two decades ago by then-Alaska Sen. Ted Stevens.

The ANCs would have to qualify under the same rules as other program participants, such as being designated as socially disadvantaged businesses and managed by equally disadvantaged individuals. The corporations also would have to meet size requirements.

The corporations would be able to receive no-bid contracts with $5.5 million caps for goods and $3.5 million for services. Larger contracts would require that they compete.

The stricter rules address many concerns and should be given time to show results, Murkowski said. She said the program is too important to curtail for Alaska Natives.

“What we have allowed American Indians and Alaska Natives the benefit of with 8(a) opportunity is to gain a level of self-sufficiency, self-determination, which is what this is really all about,” she said. “Give them the opportunity to go out there and participate in this world of commerce, earn those revenues that can come back to them and their shareholders.”

Robin Kornfield with NANA Development Corp., business arm of NANA regional Native corp., agreed that the rules address most of McCaskill’s concerns.

“We are pleased with the time, energy and effort the Small Business Administration has spent assuring Native voices were part of implementing these new regulations,” Kornfield said. “It is time to move on, use these new rules and assess their impact in Indian Country, Alaska and Hawaii.”

 

 

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