Senator McCaskill Asks for Answers From Alaska Native Corporations

May 19, 2009 -- WASHINGTON, D.C. – Subcommittee on Contracting Oversight Chairman Claire McCaskill last week began the process of gathering key information on a how a federal law is being used to obtain millions of dollars in government contracts without competition.

Read a copy of McCaskill’s letter (pdf file)

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McCaskill sent letters to twenty Alaska Native Corporations to learn more about their business practices. Alaska Native Corporations were established in 1971, and in 1986 they were made eligible for a Small Business Administration program under which firms can be awarded federal contracts non-competitively. The Small Business Administration’s section 8(a) program is normally only available for relatively small federal contracts – those under $5.5 million for goods or $3.5 million for services. However, federal law has carved out an exemption for Alaska Native Corporations, so they are able to enter into sole-source contracts of any value.

Alaska Native Corporations are also free to subcontract work to companies that don’t qualify for the section 8(a) program. And, they are allowed to enter into joint ventures and partnerships with non-Native companies for sole-source contracts. McCaskill and the Subcommittee on Contracting Oversight plan to continue pursuing this issue as future hearings approach.

Source: Senator Claire McCaskill