Alaska Native regional corporations are drawing a decreasing amount of their revenue from a controversial government contracting program that gives preferential treatment to minority-owned businesses, financial reports show.
Federal budget cuts, a temporary government shutdown and reform legislation spurred by Congressional critics and government watchdogs has made obtaining contracts through what’s known as the 8(a) program more difficult and costly.
“They see the writing on the wall,” Kim Reitmeier, executive director of the Alaska Native Claims Settlement Act Regional Association, said at a recent Anchorage Chamber of Commerce lunch at the Egan Center. “And so the regional corporations have diversified.”
At Calista Corp., management “continues to take steps to lessen its dependence on government contracting by expanding its investments in real estate,” the company’s 2014 annual report said. Between 2012 and 2014, the majority of Calista’s revenue came from contracts or subcontracts with federal government agencies. Of those contracts, a significant portion came from the 8(a) program.
Total revenue earned through the 8(a) contracting program by the 12 regional corporations, which comprise the membership of the ANCSA Regional Association, was $2.4 billion in 2014, down from $3.6 billion in 2010, the association’s most recent annual report said.
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