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8(a) Contracts Seem to Use Natives to Benefit Non-Natives

Matt Gilbert
6/28/11

A year ago, I read a Washington Post article (“Two Worlds: Government Contractors, Alaska Natives”) about how Alaska Natives are being used by management consultants to land multimillion dollar 8(a) government contracts. How the leftover profits are for corporation boards and presidents in their continued lobbying for more of the contracts, while Alaska Native villages continue to suffer extreme poverty and food crisis. I haven’t been able to sleep right since reading the article.

The article states that 10 percent of 35,000 Alaska Native Corporations (ANCs) jobs worldwide are filled by Alaska Natives; that’s 3,500 out of 35,000 worldwide. Washington, D.C. is more than 3,000 miles away from Alaska, yet most of the ANC contract work is concentrated there.

After graduate school, I looked for work in all ANCs and found security guard and computer tech positions in government facilities in obscure places like Madison, Wisconsin and Durham, North Carolina. ANC employment seems to outsource Alaska Natives from their families and homelands, which seems like a shadow of the Relocation Era.

One corporate representative told me his ANC is creating enormous amounts of jobs and scholarships. He says he sees a lot of smiling Native faces when they get their dividends, which is a direct result of government 8(a) contracts. This might be true for his region, but there are too many impoverished Alaska Native individuals and villages to give 8(a) total validity.

Since 2000, the federal government has awarded $29 billion to ANCs. According to Senator Claire McCaskill (D-Missouri) and the Post article, leaders of ANCs collect less than five percent of it. Who gets all the money? The Post article states: The non-Native management firm president collects $6.4 million off the top—just to create jobs out of the 8(a) money—the non-Native chief finance officer gets $1 million, the non-Native executive vice president $470,000, non-Native chief operating officer $402,000, and the ANC presidents get the crumbs off the table at $219,000. The Native shareholder gets $305—that’s not even crumbs off the table, that’s licking the cans after the dinner.

McCaskill says, “Alaska Natives are being used.”

During a subcommittee hearing on 8(a), McCaskill said to Julie Kitka, president of the Alaska Federation of Natives, “In three corporations, the annual revenue from government contracting is well over a billion dollars and less than 300 employees from Alaska are hired. So, Kitka, you talk about capacity-building, how is it capacity-building when less than one percent of the employees of the company are members of the [Native] corporation?” Kitka didn’t respond.

McCaskill herself is a little biased; Boeing spends a lot of money in Missouri and relies heavily on 8(a) contracts, but her facts seem to be solid.

During a speech at AFN 2010, 8(a)’s main advocate Sarah Lukin, executive director of the Native American Contractors Association, cited the increase in Native high school graduation and household income and the decrease of Alaska Natives below the poverty line as a result of 8(a)s. There are lots of factors which can cause these decreases. Again, most ANC jobs and internships are “outside” the village. What about the villagers? They continue to suffer Third World conditions in subzero climates.

In Lukin’s AFN speech, she said she was “a child who suffered the pain and humiliation of poverty.” Well, I was too and am still suffering it; 8(a) contract jobs are not taking me out of poverty. Tens of thousands of Alaska Natives and elders continue living in extreme poverty, and I don’t see 8(a) contracting doing anything noticeable for them. I see things getting worse.

I don’t like the thought of ANC CEOs living in their second home in the Lower 48 during the winter while Alaska Natives and elders are suffering Third World poverty and an occasional food crisis. It’s criminal, a recipe for revolution.

An 8(a) contract should be awarded and evaluated based on how much it builds a village economy. There needs to be more regulatory oversight and stiffer penalties for ANCs who do not meet their Alaska Native Claims Settlement Act designated responsibility for social and cultural development of their shareholders.

All 8(a) contracting is under heavy congressional review; ANCs should evolve and go to the next level. ANCs can look into financing and managing social entrepreneurship and renewable-energy development—Alaska can change the world with rural sustainable communities, but first it has to move past 8(a) contracting.

Let’s explore social entrepreneur–based businesses: helping villagers by expediting groceries from the city to offset the painfully high costs of food and assist in long-term planning for village councils. I heard a story of a couple of Native women from a
village who collected plants and made a perfume business. This was all done without 8(a) contracting, and it sure does make me sleep better. 0

Matt Gilbert grew up in Arctic Village. He finished college in Anchorage, Alaska, then returned to run the Gwich’in Athabascan tribe and to conduct Global Warming Impact Reports. He is writing a memoir about his life in Arctic Village and the outside world.

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walkingant's picture
"Senator McCaskill herself is a little biased; Boeing is headquartered in her state and relies heavily on 8(a) contracts, but her facts seem to be solid." My only question to this Matt Gilbert--how much has McCaskill paid you to write this? I am sure being a "freelance" Journalist whatever it was you couldn't refuse.
walkingant
bootanner's picture
There's a huge difference between Alaska Native 8(a)s and "lower 48" Tribally-owned 8(a)'s. Both have negotiated different terms to the 8(a) program. I can tell you that our tribe, Confederated Salish and Kootenai Tribes, have several 8(a)'s and not only give huge dividends to the tribes but also provide scholarships and jobs to people on our reservation. Sen. McCaskill is attacking the program because Boeing lost a contract to an 8(a) company. Her interests are in keeping big businesses in charge and emerging minority-owned businesses in the dust.
bootanner
erksomeduder's picture
Also Walkingant, guess how many Federal recognized (not that this is a mandatory thing for legitimacy, but for 8(a) it is) tribes are in Clair Mcaskill's state? You got it, ZERO. I do not think it is a stretch to posit that she may have limited knowledge and first hand experience of dealing with tribes and the issues they face. Yet here she is, another Great White Hope on the Hill, saying she cares and wants to save us from ourselves. Boy that $20 million cap on 8(a) contracts without prior J&A certainly helped the tribes, now they don't have to deal with so many lucrative higher bundled contracts, we can thank the Boeings and Lockheeds now for happily relieving the tribes of some of those burdens. Thanks Clair.
erksomeduder