Senator Claire McCaskill (D-Mo.), chair of the Senate Contracting Oversight Subcommittee, is pressing forward in her efforts to investigate the effectiveness of the Alaska Native Corporation (ANC) program. McCaskill has expressed on numerous occasions her concerns over the unique government contracting preferences for ANCs and will soon introduce legislation to treat ANCs equal to other small, disadvantaged businesses seeking government contracts. Senators in Alaska are expected to strongly oppose this legislation.
If enacted, her legislation would:
- Eliminate the ability of ANCs to receive sole-source contracts exceeding the caps applicable for other 8(a) participants of $3.5 million for services or $5.5 million for goods;
- Eliminate the automatic designation of ANCs as socially disadvantaged business enterprises, requiring ANCs to demonstrate their social disadvantage by providing evidence of "racial or ethnic prejudice or cultural bias within American society because of their identities as members of groups";
- Eliminate the automatic designation of ANCs as economically disadvantaged, requiring any ANC seeking to participate in the 8(a) program to demonstrate that corporation's economic disadvantage upon entering the program;
- Require ANCs to count all affiliates and subsidiaries in size determinations for 8(a) eligibility, which shall be limited to no longer than nine years, as is required for other 8(a) participants;
- Require ANCs who choose to participate in the 8(a) program to own a majority interest in only one 8(a) subsidiary at any one time;
- Require ANCs who choose to participate in the 8(a) program to be managed by individuals who qualify as socially and economically disadvantaged under the program, as other 8(a) participants must do; and
- Prohibit ANCs who chose to participate in the 8(a) program from operating as pass-throughs to non-Native companies that do not qualify under the 8(a) program.