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Small Business Administration Announces 8(a) Changes

February 11, 2011

Libby Casey, APRN – Washington DC

The Small Business Administration is changing the program that gives Alaska Native Corporations advantages in scoring government contracts.  The 8(a) program currently lets the Corporations go after no-bid, sole source contracts.

The changes announced Friday are its first re-vamp in a decade.

The 8(a) program’s goal is to give Alaska Native shareholders the benefits of their corporation’s business successes.  Critics claim the corporations get too many advantages over other contractors, and that not enough jobs and money make it back to the villages.

SBA Associate Administrator Joseph Jordan in Washington says the changes make some basic updates and also aim to get program benefits flowing to the intended recipients.

Jordan says one of the biggest changes is that Alaska Native Corporations must now report exactly what benefits their shareholders receive.

Jordan says the Alaska Native Corporations, or ANC’s, have six months to comply with that change – and he says the SBA will work with them to work out the details.

Another change affecting all minority-owned and disadvantaged small businesses that get a leg-up from the 8(a) program has to do with partnering with bigger, “mentor” companies.  The 8(a)’s can still pair up with a larger corporation on a contract, like Boeing or Raytheon, but now the small business has to do 40 percent of the work.  Also the joint venture can no longer subcontract out the remaining work to the big mentor company.  Jordan says if the mentor company wants more work, they have to bring the smaller business along too.

So far reaction the changes among users of the 8(a) program are mixed.  Three of the nation’s largest Native American groups expressed concern on Friday.  The National Congress of American Indians executive director Jacqueline Johnson Pata warned that the regulations could be “painful” for Alaska Natives.

But Will Anderson, president of Koniag Incorporated, which serves Alutiiq shareholders from Kodiak, says the new regulations should not prevent ANCs from being successful.

Anderson says the new requirement that the Corporations list exactly how they’re helping shareholders will take more effort, but he hopes it proves ANCs are serving their purpose.

Fairbanks based Doyon Corporation Chief Operating Officer Aaron Schutt says Doyon and partners Arctic Slope and Cook Inlet Regional Corporations proposed changes to the SBA and he says they support more disclosure of how the programs benefit shareholders. But he has concerns about how that reporting will be used.

The changes to the 8(a) program kick-in in 30 days.

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