GAO finds little oversight of Alaska Natives' contract privileges

WASHINGTON _ The debate over the sole-source contracting privileges that Alaska Native corporations have used to make billions of dollars is flaring in Congress with a new government audit that found lax oversight of the program.

The Government Accountability Office says there's scant government monitoring of how much of the work actually is done by Alaska Native corporations, which are supposed to benefit from the program, and how much is subcontracted to big Lower 48 companies.

"We found no evidence of regular and systematic monitoring of the limitations on subcontracting," says the report from the GAO, the auditing and investigative arm of Congress.

The report, released Tuesday, also suggests that some Alaska Native corporations "effectively operate as large firms" in what's meant as a small-business program.

Massachusetts Democratic Rep. Edward Markey called for congressional hearings on the GAO's findings, saying Congress should ensure that Alaska Native corporations' "advantages are not wrongly exploited and that taxpayers are receiving fair value for contracted work."

Companies owned by tribal entities have special advantages in the Small Business Administration's 8(a) federal contracting program and can receive sole-source contracts _ which don't require them to compete with other bidders for the jobs _ for any amount. The audit found that most of the federal contracting dollars for tribal 8(a) firms go to Alaska Native corporations, whose take rose from $1.9 billion in 2005 to $4.7 billion in 2010.

Alaska's congressional delegation defended the Native corporations Tuesday. Alaska's Democratic Sen. Mark Begich said in an interview that the GAO report didn't target the corporations and was mainly about how government agencies could manage the program better.

"What we do know is Alaska Native corporations are good corporate citizens, providing jobs and economic stimulus in Alaska and across the country," Begich said. "I've always said we need better training and oversight, and this report just confirms that."

The group Native 8 (a) Works, set up by Native organizations to counter criticism of the program, sent out a statement that said the program benefited Native shareholders and helped rural economic development. "Alaska Native corporations participating in the 8(a) program embrace additional oversight and monitoring," said Will Anderson, the chief executive of Koniag Inc., a Native corporation in Kodiak, Alaska.