"When the Senate's longest serving Republican member, Ted Stevens of Alaska, lost his seat in November's election, critics acrossthe divides likely let out a not-so-silent cheer. A brusque political heavyweight who recently was convicted of seven felonies for failure to report gifts from contractors, Stevens made his share of enemies during his 40-plus years in Washington. Liberals objected to his policies and temperament.

Conservatives were tired of the corruption investigation that had tailed him for years. And fiscal hawks on both sides of the aisle frequently were riled by Stevens' proclivity to direct billions of dollars in earmarks to his scarcely populated state.

But across the vast Alaskan wilderness in remote villages with curious-sounding names such as Chuathbaluk and Kotzebue, where Stevens has spurred huge amounts of federal spending, the 85-year-old lawmaker affectionately known as Uncle Ted is a legend. In regions beset by poverty and unemployment and where running water is a luxury, Stevens' loss to former Anchorage mayor Mark Begich is more than just a shift in political geography. For native Alaskans, it could spell the beginning of the end for one their few burgeoning business enterprises: government contracting.

Armed with a host of competitive advantages that Stevens pushed through Congress, Alaska native corporations have become dominant players in the federal marketplace, earning multimillion-dollar reconstruction contracts in Iraq and national security missions at U.S. border checkpoints. Meanwhile, small businesses owned by women or service-disabled veterans have seen their share of the government marketplace stagnate or decline. Stevens' absence from the Senate could change that equation. With the most powerful guardian of ANCs out of their way, opponents who say the program gives Alaskan companies an unfair advantage have begun to mobilize. They recognize that after years of economic and political brick walls, a door to reforming the ANC program finally might have crept open.

"There is a lot of momentum to level the playing field," says Guy Timberlake, chief executive officer of the American Small Business Coalition in Columbia, Md. "And whether that results in a consolidated effort or just making them equal, I believe that from a legislative standpoint there is going to be some action to bring the Alaska native corporation program in line with other small business programs."

The 1971 Alaska Native Claims Settlement Act, sponsored by Stevens, created 13 regional corporations and more than 200 village corporations. Eligible citizens from each region were given shares in their corporations' stock, allowing them to benefit from ANC profits. In 1992, Stevens convinced Congress that ANCs, along with companies owned by native Hawaiian organizations and Indian tribes, should be considered small and disadvantaged and therefore eligible to participate in the Small Business Administration's 8(a) Business Development program. Federal agencies are allowed to bypass competition and direct sole-source contracts to 8(a) participants."

Get the Story:
Out in the Cold (Government Executive March 2009)
Business is booming for Alaska native corporations (Government Executive March 2009)