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ANCs get billions less in contracts

Jul. 15, 2012 - 02:33PM   |  
By SARAH CHACKO   |   Comments
Sen. Claire McCaskill, D-Mo., is seen at a press conference March 1 in Washington, D.C.
Sen. Claire McCaskill, D-Mo., is seen at a press conference March 1 in Washington, D.C. (Mandel Ngan / AFP via Getty Images)

Agencies are awarding far fewer contracts to Alaska Native Corporations this year than in the past.

Experts attribute the sharp drop to new measures installed last year to curb the volume and size of sole-source contracts handed to ANCs.

Agencies awarded ANCs $4.4 billion in contracts in 2011. About $2.5 billion of that — or 57 percent — was awarded through sole-source contracts valued at $20 million or more each, according to federal contract data.

But this year, the figures are dramatically lower: $1.8 billion in total obligations for the first three quarters of fiscal 2012. Sole-source contracts valued at $20 million or more each accounted for $587 million, or about 33 percent.

Those measures require contracting officers to justify contracts valued at $20 million or more that are set aside for ANCs, Indian tribes and Native Hawaiian organizations that participate in the 8(a) program.

The new steps were put in place after Sen. Claire McCaskill, chairwoman of the contracting oversight subcommittee, investigated ANCs in 2009 and found they passed much of their work to large, non-Native companies, failed to employ Alaska Natives to work on the contracts and returned only minimal benefits from the businesses to Alaska Natives.

McCaskill has been a fierce opponent of the contracting preferences bestowed on ANCs and other Native American firms. Agencies are allowed to award them contracts of any value without competition.

Advocates of Alaska Native Corporations say the new measures added to the contracting process have frightened off procurement staffs from using ANCs.

“You have all this news about Native entities getting sole-source contracts and members of Congress calling for investigations. If you’re the contracting officer, what are you going to do?” said Kevin Allis, executive director of the Native American Contracting Association (NACA). “We’re hearing from the field, contracting officers want to award them but they don’t want to go through the justification and approval process because they don’t want backlash from the people above them.”

NACA has launched a campaign to educate agencies on how ANC contracts benefit native communities in hopes that will make contracting officers more willing to undergo the justification and approval process, Allis said.

Meanwhile, McCaskill is trying to further limit federal business with ANCs. She has pressed the Senate Small Business Committee to pass a bill that would eliminate ANCs’ ability to receive sole-source contracts larger than what other companies get in the Small Business Administration’s 8(a) Business Development program.

Agencies use sole-source awards because they take less time for short-staffed contracting offices to award than do awards made through full and open competition.

Procurement officials say they have seen their workload increase as they cut back on their use of sole-source awards to avoid the justification and approval process.

Justifications and approvals, required in other situations where sole-source awards are allowed, take about 30 days to complete, said Robin Baldwin, chief of the Army Corps of Engineers contracting policy division. But timing is not the issue in submitting and approving justifications for 8(a) sole-source contracts, she said.

Federal and defense officials are pressuring agencies to move away from sole-source awards in favor of competition, which usually drives down costs, Baldwin said.

“We’re all about competition,” she said.

Contracting officers have to manage more competitions, but they are adjusting, she said. Most of the new contracts open to competition are still awarded to small businesses, Baldwin said. She said she did not know how many of the ANCs awarded sole-source awards previously won new awards through competition.

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