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Office of Government Contracting & Business Development | Resources

Indian reservations and Alaska Native Villages suffer from some of the worst poverty in this country, with unemployment levels in excess of 60%. For example, a recent federal study found that the area of the country with the lowest life expectancy in the country was not an urban ghetto but an Indian reservation. Because of the lack of resources, there is little individual entrepreneurship on reservations.

Instead, the Indian tribal governments and Alaska Native Corporations (the Alaska equivalent of tribes) have the primary responsibility for promoting economic development. On the premise that it is both appropriate and necessary to use the Federal government’s massive procurement activity to help jump-start reservation economies, Congress has given tribes and Alaska Native Corporations (ANCs) unique rights in the Federal procurement process. These rights provide the Federal agencies and federal contractors with strong incentives to contract with tribal and ANC firms. (All of these special provisions are contingent upon the tribal and ANC-owned firms providing quality services and supplies to the Federal agencies and performing 51% of the labor hours with their own direct labor.)

There are three different procurement areas in which tribal and ANC-owned firms have special rights.

  • Special Rights Under the SBA 8(a) Program. - Tribal and ANC 8(a) firms are eligible to receive sole source 8(a) contracts regardless of dollar size, with no upper limit, while all other 8(a) firms may not receive sole source contracts in excess of $3 million for services and $5 million for manufacturing.

  • Special Rights Under the A-76 Program - The A-76 program (“A-76" refers to the number of the implementing Office of Management and Budget (OMB) Circular) imposes a long and cumbersome procedure for any government facility that wishes to contract out (i.e., outsource) an activity that employs ten or more civilian government employees. (The average A-76 study takes 23 months.) Language in the Defense Appropriations Act3 provides that a command does not have to go through the A-76 process but may do a direct conversion of that function to a private contractor, regardless of the number of civilian employees, if the command contracts with a firm that is 51% or more Native American owned, so long as the conversion is cost-effective.

  • The 5% Subcontracting Bonus - Pursuant to statutory language and implementing regulations, a DOD contractor that subcontracts with a firm that is 51% or more Native American owned is entitled to receive a bonus equal to 5% of the amount of the subcontract award.

Tribal and ANC-owned firms have been granted special contracting opportunities under the FAR for government contracts in general and for DOD contracts in particular. These include unique 8(a) rights, expedited A-76 authority, and bonuses for DOD contractors that subcontract with Native American-owned firms. However, to fully put these rights to work in order to aggressively attack the extreme poverty that exists on Indian reservations and in Alaska Native Villages, the tribal and ANC-owned firms often need mentoring from large established government contracting firms that can help guide them through the
intricacies of DOD contracting and provide technical support while the firms are building their in-house capability. Working with tribal and ANC firms to put these unique rights to work provides the DOD contractor with an opportunity to help reduce some of the worst poverty in this country, to meet is SDB goals, to make money, and help further legislative initiatives.

Click here to search for Alaska Native Corporation subsidiaries that have participated in the Small Business Administration's 8(a) contracting program for small, minority and disadvantaged businesses: http://www.washingtonpost.com/wp-srv/special/nation/alaska-native/anc-list.html