On November 17, 2010, Senator Claire McCaskill (D-MO) introduced legislation to eliminate the government contracting preferences for Alaska Native Corporations (ANCs). As Chairman of the Subcommittee on Contracting Oversight of the Committee on Homeland Security and Governmental Affairs, Senator McCaskill has been a vocal critic of ANCs for the past several years. The Subcommittee has issued multiple reports examining the significant growth in the size of ANC companies since they became eligible for federal contracting opportunities under the Small Business Administration's 8(a) program.
At bottom, the proposed legislation would require ANCs to be treated the same as all other companies under the 8(a) program. Specifically, the legislation would:
- Eliminate the ability of ANCs to receive sole-source contracts exceeding the caps placed on other 8(a) participants ($3.5 million for services or $5.5 million for goods).
- Remove the automatic designation of ANCs as both socially and economically disadvantaged businesses, and require ANCs to establish their disadvantaged status.
- Require ANCs to include all affiliates and subsidiaries in their 8(a) size determination.
- Restrict ANCs that participate in the 8(a) program to owning a majority interest in only one 8(a) subsidiary at any one time.
- Require ANCs that participate in the 8(a) program to be managed by individuals who qualify as socially and economically disadvantaged.
While it is unclear at this stage what support Senator McCaskill's bill will have from the Committee, or from the rest of Congress following the recent elections, the bill is one that ANCs and non-Native companies that do business with ANCs should keep on their radar.