Alaska Natives and Indian Tribes, and Native Hawaiian Organizations have a unique relationship with the United States Government as set forth by the U.S. Congress. These communities lack the
Despite the unique rules that allow Native American small businesses to secure federal government contracts, there is still a national problem and some disparity as to who actually gets federal procurement projects. For example, statistics show that tribal entities receive fewer government contracts than Alaskan Native Corporations.
Nevertheless, developing successful strategies for seeking out and acquiring government contracts remains a huge problem. Building the proper relationships between Native American contractors and traditional contractors still seems to below the norm.
- Unless companies revise their current strategies, the end result will not change
- Building the bridge with credible past performance from non-Native American contractors can be a benefit
- Finding the right teaming partners could be a step in the right direction
Congressional intent and regulatory
Congress allowed special rules under the SBA 8(a) program. As a practical matter, many Native American Tribes lack the knowledge and advice from Native American contracting lawyers and federal small business consultants that understand the federal procurement process.
In March 2011, the Federal Acquisition Regulation was amended to include a new requirement for a written justification for sole-source 8(a) awards over $20 million, where previously no justification was required. GAO has previously reported on tribal 8(a) contracting and recommended improved oversight.
Native American government contracts are subject to CFR 124.506 which addresses exemption from competitive thresholds for Participants owned by Indian tribes.
SBA may award a sole source 8(a) contract to a Participant concern owned and controlled by an Indian tribe or an ANC Where the anticipated value of the procurement exceeds the applicable Competitive threshold if SBA has not accepted the requirement into the 8(a) BD program as a competitive procurement.
Native American 8a Government Contracts Not Competed?
There is no requirement that a procurement must be competed whenever possible before it can be accepted on a sole source basis for a tribally-owned or ANC-owned concerns. However, a procurement may not be removed from competition to award it to a tribally-owned or ANC-owned concern on a sole source basis.
Tribal entities are allowed a unique relationship when applying for and performing 8a government contracts. Due to the lack of resources, the tribal governments are allowed special rules in the SBA 8a program. Native American tribes are sometimes referred to as “super 8a firms.” Some of the unique rules in tribal or native government contracting include:
- They are exempt from the limits placed on sole source contracts; and
- They can own multiple companies that can join the 8a contracting Program.
- The profits generated by these Native corporations provide economic benefits to tribal communities, sometimes numbering in the thousands.
- Profits generated by individually owned businesses benefit only that individual owner.
Other differences between traditional 8a Contracting and the Unique Native American Rules for Super 8a Firms
1) Native American contracting laws allow for an 8a contractor to be eligible for the large sole-source contracts, they can also select whomever they want to manage the 8(a), whereas individual owners must manage the 8(a) on their own. Native corporations must have Boards of Directors, which oversee the 8(a) management team as well as other issues, such as preservation of their culture and distribution of tribal owner benefits.
2) All 8(a)s, including Native corporations, are limited to 9 years in the program.
3) Native corporations can have multiple 8(a)s, but no two subsidiaries can be in the same primary industry code. The reason for this is that Native 8a government contractors provide benefits to their tribal owners and community.
Agency Compliance With 8a Native American Government Contracting Rules
Although there are very unique rules governing tribal and Native American contract for 8a government contracts, contracting agencies fail to aggressively pursue the congressional intent to Native American contractors and to small businesses in general.
There is still a question as to whether they are truly given preferential treatment allowed by federal statutes. 8a government contract lawyers are filing or defending bid protests for Native American incentive bid awards. A number of government contract awards to Native American tribes arguably shows a different result.
Many agencies and some SBA offices analyze awards to Native American contractors contrary to what the Congress has provided for. For example, the obvious question of past performance is introduced by the agency. Thus, having very little past performance, the contracting officer often decides not to award contracts.
Although FAR 9.6 allows for teaming arrangements and joint ventures (which should reduce the government risk of non-performance, the Native American tribes under 8a contracting rules still have yet to get their fair share of federal contracts.
Native American contracting rules and 8a government contracts regulations allow for the contracting officer to consider the past performance of the tribe’s teaming partners. However, most elect not to. The reason given is that the federal procurement rules do not make it mandatory to do so.
The GAO has ruled many times that the contracting agency can consider a teaming partner or subcontractors past performance when awarding government contracts. Yet, the question remains why aren’t their more awards. Government 8a contracting lawyers should pay special attention to this analysis.
Although the agency has wide latitude and authority, such authority is still to congressional legislative intent. Although the Congress has set forth goals and mandates for government contract awards, the reality is that Congress will not reap much taxes from small business due to a lack of small business government contract awards.
Undoubtedly, this effects the economy. Partnering or teaming with Native American tribes can be beneficial to the few government contractors that have been given the opportunity to team with tribal communities. However, more scrutiny should be brought upon the agencies that consistently refuse to award government contracts according to CFR 124.506 (b) and FAR 9.6.
For help getting to the next level or with legal concerns regarding 8a government contracts and Native American contracting information, contact one of our government contract attorneys at our Native American contract law firm or call toll free 1866-601-5518.