Federal regulators told at least 100 AFN delegates attending a breakout session Thursday that they are about to make revisions to the controversial federal-contracting program behind the huge growth of many Alaska Native corporations this decade.
For several years, the U.S. Small Business Administration has been working on significant revisions to its federal contracting program for minority-owned firms. SBA officials attending the Alaska Federation of Natives convention in Anchorage said the draft regulations will be published next week, starting a 60-day comment period.
The proposed changes are coming just months after U.S. Sen. Claire McCaskill, D-Mo., launched an investigation of Native firms' contracting privileges. Her investigation found that Native companies landed nearly $24 billion in work over the past eight years. She said she plans to seek changes to the SBA 8(a) program, which allows qualified Native firms to obtain federal contracts of any dollar amount without competitive bidding.
The SBA's proposed regulation changes are substantial enough that they would affect how minority contractors do business in the future, said John Klein, an SBA attorney based in Washington, D.C.
He said one of the significant changes will involve joint ventures — minority-owned firms teaming with non-minority firms to obtain federal contracts. The proposed changes are meant to prevent abuses in those joint ventures, such as when a larger firm takes more than its proper share of the contract's financial benefits, he said.
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