Data shows Alaska native firms do most of their work in other states

By Elizabeth Newell Jochum

June 23, 2009

Alaska native corporations are enjoying dramatic increases in federal contract awards, but the majority of that money is being spent outside Alaska, according to data released on Tuesday by a Senate contracting oversight subcommittee.

The data, compiled by Eagle Eye Inc., a Fairfax, Va.-based market research company, for the Senate Homeland Security and Governmental Affairs Subcommittee on Contracting Oversight, shows that only 21 percent of all contract dollars awarded to ANCs from fiscal 2000 to 2008 went to projects in Alaska. The government spent the highest percentage of those dollars in Virginia, followed by Maryland and California. In 2004, 2006, 2007 and 2008, more ANC contract dollars were spent on projects in Virginia than in Alaska.

Moreover, 18 percent of all ANC contract dollars were awarded to Virginia-based firms. In total, between fiscal 2000 and 2008 about 40 percent of all ANC dollars were awarded to companies located outside Alaska.

According to the subcommittee, ANCs, which receive preferences in federal contracting, must be owned by indigenous Alaskans, but there is no legal requirement that the companies' employees be native Alaskans or that they locate their offices in the state.

As previously reported by Government Executive, data from Eagle Eye also shows that contract awards to ANCs jumped tenfold from fiscal 2000 to 2008, from about $500 million to more than $5 billion.

The subcommittee reported that the Defense Department does the most business with ANCs, by far. Between fiscal 2000 and 2008, Defense spent $16.9 billion on contracts with the native corporations, accounting for more than 70 percent of total spending with ANCs. The Interior Department was the runner-up with $1 billion -- or 4 percent of the total -- spent on ANC contracts. It was followed closely by the Homeland Security Department with $980 million.

Sarah Lukin, executive director of the Native American Contractors Association, said it will take a while for the organization to analyze the data and determine if it accurately reflects the state of ANCs in federal contracting. She said it also will take time to put it in perspective "with the rest of the federal contracting pie." Lukin took issue, however, with the focus on where ANCs do business.

"McCaskill's press release seems to argue ANCs should not be permitted to operate outside Alaska," Lukin said. "Like any federal contractor or small business in the [Small Business Administration] program, Alaska native corporations are not restricted to contracts within the borders of their state."

The Senate subcommittee said its investigation of ANCs is ongoing and it will hold a hearing on the subject on July 16. In addition to reviewing the data from Eagle Eye and other publicly available information, the subcommittee is analyzing materials produced by 20 ANCs in response to document requests.

By Elizabeth Newell Jochum

June 23, 2009