Alaska Native Corporation Owned Businesses

Credit toward Meeting Federal Contractors Subcontracting Goals

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed on a final rule amending the Federal Acquisition Regulation (FAR) to implement section 702 of the Emergency Supplemental Act, 2002, as amended by section 3003 of the 2002 Supplemental Appropriations Act for Further Recovery From and Response to Terrorist Attacks on the United States. The law permits subcontracts awarded to Alaska Native Corporations (ANC’s) and Indian tribes to be counted towards a Prime Contractor's goals for subcontracting with small business (SB) and small disadvantaged business (SDB) concerns. Such credit can be taken even where the ANC or Indian tribe may be “other than small” under the Small Business administration (SBA) regulation and even if the ANC owned business is not certified by the Small Business Administration (“SBA”) as a Small Disadvantaged Business (“SDB”) under the SBA §8(a) Program [Section 8 of PL 85-536].

The definitions in ANCSA §1626 make it clear that ANC ownership extends to all subsidiaries and affiliates of an ANC regardless of tier. Therefore, all purchases made through any of NANA Regional Corporation’s larger subsidiaries such as WHPACIFIC Incorporated -- that are at least 51% owned by NRC or NDC, can now be counted towards the Prime Contractor’s small business (SB) and or a Small Disadvantaged Business goals. This means that the NRC/NDC subsidiaries, which do not qualify as SDB’s under the §8(a) Program because they no longer meet the size standards for a small business -- will become much more attractive as potential subcontractors for prime contractors bidding on federal procurements.

Where one or more subcontractors are in the subcontract tier between the prime contractor and the ANC, the ANC shall designate the appropriate contractor(s) to receive credit towards their SB and SDB subcontracting goals. Refer to FAR section 19.703 (c)(1)(ii) for the rules for the implementation of this provision. This too is very important. It basically means that you can be a second tier subcontractor and either the Prime Contractor or the First Tier subcontractor (but not both) can take SB and SDB credit for all procurements issued to an ANC.

The Act does not make all ANC owned businesses automatically eligible for certification into the §8(a) or SDB Programs. Therefore, ALL ANC’s which have NOT been certified by the Small Business Administration and accepted into the 8(a) program remain ineligible for federal sole source procurements or prime contract set asides that are limited to § 8(a) Program participants.

This final rule was published in the Federal Register of August 17, 2007 and is effective on September 17, 2007. The appropriate legal citation for this rule is: FAC 2005-19, FAR case 2004-017.