The fiscal 2020 National Defense Authorization Act could mean financial gain for Alaska Native corporations thanks to a legislative push by Alaska GOP Sen. Dan Sullivan.
The defense bill, passed by the U.S. House and Senate, authorizes $738 billion in defense spending and includes a provision that would undo a contracting requirement that applied only to businesses owned by tribes, Alaska Natives and Native Hawaiians, according to a news release from Sullivan’s office.
For nearly a decade, this contracting requirement, called Section 811, has hampered the ability of Native 8(a) small businesses to obtain sole-source contracts with values in excess of $22 million, limiting the ability of Native contractors to complete with larger contractors across the country.
“This biased requirement has reduced our ability to provide for our shareholders, descendants and community, as the program was originally intended,” said Cynthia Berns, vice president for community and external affairs of the Old Harbor Native Corp.
Sullivan developed the provision that requires the Department of Defense to remove the restrictions of Section 811, which only applied to Native contractors. Sullivan’s provision allows for contracts at $100 million and below to be issued with less administrative oversight for sole-sourced contracts.
“Alaska Native corporations are an integral part of Alaska’s economy,” Sullivan said in a news release. “Unfortunately, the restrictions put on these entities, in the midst of a recession in our state, not only negatively impacted Alaska Native corporations and their shareholders but also the thousands of Alaskans — Native and non-Native — who work for these corporations.”
Sullivan said he had worked on changing the provision since joining the Senate in 2015.
“I’m hopeful that this new law will streamline contracting practices within the Department of Defense, drive additional business to Alaska companies, and allow these businesses to continue their work enriching their communities with jobs, educational opportunities, dividends, and new investments,” he said.
According to a news release from the Old Harbor Native Corp. the contracting requirement in Section 811 hurt the corporation’s ability to obtain sole-source contracts valued at over $22 million.
“This was no small undertaking by Senator Sullivan with coordinated successful action in the House,” said Carl Marrs, CEO of Old Harbor Native Corp. “It is very much appreciated by the Alaska Native Communities and I am sure by all Native Americans and Native Hawaiians.”
Old Harbor Native Corp. regularly works with numerous defense agencies through Three Saints Bay, LLC, a subsidiary focused on government contracting.
“This would allow us to do much bigger contracts,” Marrs said, noting that the corporation has had numerous contract turned down under Section 811.
The Old Harbor Native Corp. has been involved in advocacy to change Section 811 since it was introduced by former Sen. Claire McCaskill, D-Missouri, in 2009, as part of their work with the Native American Contractors Association.
The new provision was supported through a partnership between Rep. Don Young, R-Alaska, and Rep. Tulsi Gabbard, D-Hawaii, who helped pass the new language in a House vote last week.
“Alaska Native corporations are crucially important to Alaska and our way of life, and we see the high-quality work they do on projects across our state,” Young said. “ANCs are reliable, dependable, and cost-effective contractors. They have proven time and time again that they do solid work at a fair price, and are therefore excellent partners for the federal government and the American taxpayer.”
The new defense bill includes numerous other provisions that will impact communities on Kodiak Island. Among them is a significant funding increase to the Innovative Readiness Training Program, a Department of Defense military training opportunity that provides services to American communities.
The new bill adds $14.3 million to the program budget, for a total of $30 million. As part of the program, military service members complete projects that benefit rural communities across the country, while also providing opportunities for increased military training and readiness.
According to Marrs, the program has supported the expansion of the Old Harbor Airport and will finance a road extension to support the Old Harbor Hydroelectric Project.
The bill also authorizes the Department of Defense to carry out a program to support space launches for small and medium-class payloads. The program would make investments in federally licensed, non-federally owned launch facilities, such as the Pacific Spaceport Complex-Alaska in Kodiak.