Congress Asks Government Accountability Office to Look at Alaska Native Corporations and No-Bid Contracts

By Adena Schutzberg

After 9/11 there was a rush to enhance homeland security.Among other things that meant a number of federal contracts for support were put out.Last week Congress directed the Government Accountability Office to explore the large number of contracts awarded to Alaskan Native Corporations (ANC).The work in question includes security work at military bases, maintaining scanning machines at borders, building bases, and of interest to this community, supporting the National Geospatial-Intelligence Agency (NGA).Individual contracts to individual ANC corporations can reach $2.2 billion.

Because of their special status based on a 1971 law, ANCs need not abide by a $3 million cap on no bid service contracts which other small minority businesses face.And, ANCs need not be run by Alaskans and may work with subcontractors, so long as 50% of contracts are performed by the companies themselves.Cost benefit studies required for other bids are not required for ANC contracts.Many say that this arrangement has helped educate and grow the economy of native Alaskans.Others are concerned that tax payers are not getting their money's worth.

In a letter to the Comptroller General of the U.S.representatives Tom Davis and Henry Waxman noted that perhaps such contracts were being assigned not because there was no time for a bid, but because the agencies behind them wanted to insure they met their minority contracting goals.They note too that traditional cost/benefit studies are not done on these contracts, making it easier for the government to "waste" money.The congressmen also point out that sometimes large corporations end up as subcontractors to the ANCs.Why, they ask, should these players not be able to get contracts via traditional competitive methods?

Two ANCs, Chenega Corp. and Arctic Slope Regional Corp. partnered as NJVC Corp (based in McLean Virginia) and received a $2.2 billion contract from NGA in 2001.Even then the contract sparked concern.Chenega, which does not mention NGA, nor any of its clients, on its website was ranked as the top grossing 8(a) Federal Prime Contractor in 2004.It outpaced the #2 company by about $15 million and was not even on the list the year before.In an article from 2004 The Washington Post reported that only 33 Alaskan natives were among the 2,300 employees who worked for Chenega Technology Services, the parent company of Chenega.The article also reports that the company, which at one time had some shareholders from Chenaga (a small Alaska town which is accessible only by floatplane and has a population of about 60 today) in 2004 had 142 shareholders and operated in 35 states and seven countries.There are some other interesting facts about Chenega here.

Arctic Slope Regional Corporation was ranked #61 in the top 100 Federal Prime Contractors in 2004 with $109,497,000 in revenue.About $66 million was from defense, the rest from civilian work.The company is Inupiat-owned and was set up to manage 5 million acres on Alaska's North Slope, as part of the 1971 legislation noted above.The company receives about two-thirds of sales from its energy services subsidiaries (ASRC Energy Services) and its petroleum refining and marketing units (Petro Star).Other operations include construction, engineering, and governmental services.

Just recently ASRC Management based in Greenbelt, MD won a $2 million contract from the Agriculture Department for remote sensing and satellite imagery and data processing services.A quick check didn't turn up any other USDA contracts for the company nor could I confirm if the contract was no-bid.

Published Friday, March 25th, 2005

Written by Adena Schutzberg

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