	Introduction

The widely reported increase in federal contract dollars awarded to Alaska Native Corporations (ANCs) and their subsidiaries in recent years has generated congressional and public interest in the legal authorities governing contracting with these entities. 598 , S. 236 ) that would generally subject ANC-owned firms participating in the 8(a) Program to the same treatment as individually owned firms. Among other things, this legislation would preclude ANC-owned firms from receiving sole-source awards valued in excess of $4 million ($6.5 million for manufacturing contracts) under the authority of Section 8(a) of the Small Business Act. These include (1) the general contracting authorities, (2) the general small business authorities, (3) Section 8(a) of the Small Business Act, (4) authorities pertaining to Native Americans, and (5) various appropriations riders. General Contracting Authorities

The Armed Services Procurement Act of 1947 and the Federal Property and Administrative Services Act of 1949, as amended, give defense and civilian agencies, respectively, broad authority to contract for goods and services. This includes ANCs and their subsidiaries. Contracting officers must generally justify such sole-source awards in writing and obtain approval of these justifications from their superiors. Section 15 of the Small Business Act of 1958, in conjunction with Sections 2711 and 2723 of the Competition in Contracting Act of 1984, provides agencies with special authorities for contracting with small businesses. Under these authorities, agencies may "set aside" contracts for small businesses—by conducting competitions in which only they can compete—when certain conditions are met. Section 8(a) of the Small Business Act

Agencies can also contract with ANC-owned firms, although not necessarily ANCs themselves, under the authority of Section 8(a) of the Small Business Act of 1958, as amended. However, agencies also have special authority to make sole-source awards to ANC- or other group-owned firms under Section 8(a) in circumstances when they could not make awards to individually owned 8(a) firms (e.g., when the contract exceeds the "competitive threshold," and there is a reasonable expectation that at least two eligible and responsible 8(a) firms will submit offers at a fair market price). However, justifications, approvals, and notices are still not required for sole-source contracts valued at between $4 million ($6.5 million for manufacturing contracts) and $20 million awarded under the authority of Section 8(a). These provisions create incentives for agencies to contract with ANCs or their subsidiaries by, for example, allowing contracts with "large" ANCs to count toward federal prime contractors' goals for subcontracting with small businesses. All 8(a) firms were deemed to be SDBs, but other firms at least 51% unconditionally owned and controlled by socially and economically disadvantaged individuals or groups could also obtain certification. Appropriations Riders Allowing Direct Conversion of DOD Functions

The Department of Defense (DOD) can contract out functions performed by government employees to ANCs or ANC-owned firms without going through the competitive sourcing process normally required under Office of Management and Budget (OMB) Circular A-76. Legislative Activity in the 112th Congress

Members of the 112 th Congress have introduced legislation ( H.R. The proposed legislation would also amend Section 8(a) to (1) prevent ANC-owned firms from receiving additional sole-source awards when the total amount of competitive and sole-source awards they have received in any year exceeds the total amount of competitive and sole-source awards that individually owned firms may receive (currently, $100 million); (2) prohibit the SBA from exempting ANC-owned firms from any time limitations on participation in the 8(a) Program to which individually owned 8(a) firms are subject; and (3) require ANCs to report annually to the SBA on their total revenue, the amount of this revenue attributable to the 8(a) Program, and the "total amount of benefits paid to shareholders." Under the new rules, ANC-owned 8(a) firms (1) may not receive a sole-source 8(a) contract that is a follow-on contract to an 8(a) contract that was performed immediately previously by a firm owned by the same ANC; (2) must report annually to the SBA on the benefits provided to Alaska Natives from the ANC's participation in the 8(a) Program; and (3) may be found to have potential for success if the ANC pledges to use its resources to support the firm and to not allow the firm to cease operations.
The widely reported increase in federal contract dollars awarded to Alaska Native Corporations (ANCs) and their subsidiaries in recent years has generated congressional and public interest in the legal authorities that govern contracting with these entities. Currently, federal agencies may contract with ANCs or their subsidiaries under several different statutory authorities. These include (1) the Armed Services Procurement Act (ASPA) and the Federal Property and Administrative Services Act (FPASA); (2) Section 8(a) of the Small Business Act; and (3) Section 15 of the Small Business Act. The identity of the procuring agency and the size of the ANC or ANC-owned firm, in part, determine which authority is used in particular circumstances.
ASPA and FPASA, for example, generally give defense and civilian agencies, respectively, broad authority to contract with any qualified, responsible source, including ANCs and their subsidiaries. Contractors do not need to be "small" in size, or for-profit entities, as they generally must be to receive contracts under the Small Business Act. ASPA and FPASA also authorize agencies to make sole-source awards in certain circumstances (e.g., unusual and compelling urgency), although such awards must be justified in writing and approved by agency officials.
Two sections of the Small Business Act also permit contracts with certain ANCs or their subsidiaries. Section 8(a) of the act authorizes agencies to contract with small businesses owned and controlled by socially and economically disadvantaged individuals or groups participating in the "8(a) Program." ANCs are deemed to be socially and economically disadvantaged, and ANC-owned firms may participate in the 8(a) Program. Under Section 8(a), agencies may conduct competitions in which only 8(a) firms may compete (i.e., set-asides), as well as make sole-source awards in circumstances where such awards would not be permitted under ASPA or FPASA. 8(a) contracts valued in excess of $4 million ($6.5 million for manufacturing contracts) must generally be competed among 8(a) firms. However, Section 8(a) authorizes sole-source awards of such contracts to 8(a) firms if (1) the contracting officer does not reasonably expect that at least two 8(a) firms will submit offers at a fair market price; or (2) the Small Business Administration accepts the requirement on behalf of an 8(a) firm owned by an ANC or other disadvantaged group. Sole-source contracts under the authority of Section 8(a) historically did not need to be justified or approved. However, since 2009, agencies have been required to justify and obtain approval for sole-source 8(a) contracts valued in excess of $20 million (base plus options). Section 15 of the Small Business Act also authorizes set-asides (but not sole-source awards) for various types of small businesses. ANC-owned small businesses not participating in the 8(a) Program could receive awards under the authority of Section 15.
In addition, several other statutes create incentives for agencies to contract with ANCs or their subsidiaries by, for example, allowing contracts with "large" ANCs to count toward federal prime contractors' goals for subcontracting with small businesses. Similarly, various appropriations riders permit the Department of Defense to contract out functions performed by government employees to ANCs without going through the customary competitive sourcing process.
Members of the 112th Congress have introduced legislation (H.R. 598, S. 236) that would generally subject ANC-owned firms participating in the 8(a) Program to the same treatment as individually owned firms. Among other things, this legislation would limit the circumstances in which ANC-owned firms could receive sole-source awards valued in excess of $4 million ($6.5 million for manufacturing contracts) under the authority of Section 8(a) of the Small Business Act.