A July 16 hearing of the Senate Homeland Security and Governmental Affairs Subcommittee on Contracting Oversight on federal procurement preferences for Alaska Native Corporations (ANCs) exposed the lack of competition and other problems with the program, as well as the Alaska delegation’s fierce protection of it. The hearing occurred after a U.S. Small Business Administration Audit revealed disturbing findings about the unfair advantages of ANCs.

Chairman Claire McCaskill (D-MO) questioned Joseph Jordan and Debra Ritt of the U.S. Small Business Administration as well as Shay Assad of the Department of Defense. McCaskill maintained that current preferential treatment for ANCs is unfair and contains loopholes, and pointed to special privileges enjoyed by ANCs and no other Indian group. The Chairman took particular aim at the presumption of permanent economic disadvantage regarding ANCs, regardless of the organization’s success or growth, and the ability of ANCs to receive sole-source contracts of any value without competition.

Ranking Member Susan Collins (R-ME) followed with a similar line of questions, and showed particular concern for subcontracting bonus loopholes in which an ANC can contract with its own subsidiary and receive bonus revenue. Collins also asked about the lack of formal competition in procurement, and criticized a loophole allowing ANCs, through the continuous creation of subsidiaries, to maintain 8(a) status indefinitely.  

Both Alaskan Senators Lisa Murkowski (R-AK) and Mark Begich (D-AK) defended the current law, citing the large educational and economic gains to Alaska Natives. According to Sarah Lukin , Executive Director of the Native American Contractors Association, the government has a history of ill-advised policies dealing with Natives and the 8(a) program is one of the few done right.

As Chairman of the Government Oversight and Management Subcommittee, Senator Daniel Akaka recognized the need to review ANC contracts. In his statement, he said U.S. taxpayers risk the loss of billions due to fraud and inconsistencies.