ProPublica: Alaska Native corporations giving work to outside firms

Tuesday, February 1, 2011  

"When Alutiiq Manufacturing Contractors won a $28 million stimulus contract to replace windows at a federal building in Boston, it wasn't just a win for Alutiiq Natives on Kodiak Island.

The company, which can obtain large government contracts without competition under a program meant to help Alaska Natives, took what's become a common step. It subcontracted out $23 million, or about 80 percent of the project, to a more experienced firm -- in Alabama.

Critics of Alaska Native corporations, or ANCs, say such pass-throughs increase costs for taxpayers and undermine the intent of the contracting privileges by diverting benefits to non-Native firms. ANCs respond that they are simply trying to build the most qualified team to do the government's work.

Alaska's Native corporations have been under fire by some members of Congress who want to strip them of the special advantages they have over other minority firms. But some key questions have been unanswered in the debate: How often do the Alaska companies use subcontractors? And who is getting a share of their business?

An analysis by ProPublica, drawing on detailed reports of federal stimulus projects, shows for the first time that ANCs turned to subcontractors at twice the rate of all other federal contractors and significantly more often than other small, minority-owned firms.

And at least some of this work has gone to large firms -- General Electric, Kiewit and Lockheed Martin -- the stimulus reports show, echoing government audits that have fueled the criticism of ANCs."

Get the Story:
Outside subcontractors get big share of no-bid Native contracts (ProPublica 2/1)