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Alaska Native Corporations Cash In on Contracting Edge

He said he was unsure whether Customs officials could have gotten a better price by using competitive bids. But he said he was certain the agency got good value and saved "an enormous amount of government people time" with Chenega.

"There are special rules of engagement that Alaska Native Corporations benefit from, and we took advantage of those benefits," Bickelman said.

In a recent interview, Stevens defended the Alaska Native Corporations, saying the Constitution allows Congress to provide special preferences to Native Americans. The senator said the legal framework he helped to create is geared toward aiding all Native-American-owned companies.

"It's an avenue for minority-type businesses to get experience," Stevens said.

Chenega's Hueners praised Stevens as "instrumental" to the process.

But Danielle Brian, executive director of the nonpartisan Project on Government Oversight, called the contracting preference for Alaska Native Corporations "a total manipulation of people's natural sympathy toward the history of exploited Native Americans to help further the profit-making of a very few."

Brian and other critics contend that procurement procedures designed to ensure that taxpayers get the best possible deals are being subverted and that the benefits go to relatively few oppressed Native Alaskans. "These appear to be shell companies fronting for the same old contractors who have been getting government business all along," Brian said.

Keith Ashdown, vice president of policy at Taxpayers for Common Sense, said allowing Alaska Native Corporations to sidestep procurement rules is "a horrible deal" for taxpayers.

"You are paying more and getting less when you go through a scheme like this," he said. "Any time we see something sole-sourced, they become magnets for mischief."

A Slow Start

Chenega Corp., the parent of Chenega Technology, was formed as an Alaska Native Village Corporation in 1974. Three years earlier, the federal government had settled historical land disputes under the Alaska Native Claims Settlement Act. The act created a network of 13 regional and more than 200 village corporations to handle $962 million and 44 million acres from the federal government. They were also given the right to operate as profit-making businesses.

Chenega Corp. originally had 69 shareholders, some of whom lived in the village of Chenega, which today has about 60 residents and a small boat harbor. It is accessible by floatplanes and a gravel airstrip. The company has 142 shareholders and operates in 35 states and seven countries. Its five-member board of Native Alaskans includes president and chief executive Charles W. Totemoff and three people with the last name Kompkoff. A company official said the Kompkoffs are distant cousins of one another.

The company and its subsidiaries have about 60 contracts, the majority of them no-bid, to supply 17 federal agencies with information technology, security, base operations, intelligence and other services.

In their first 20 years of operation, many of the Alaska Native Corporations struggled, with several teetering on the edge of financial ruin.

Then, in the early 1990s, Stevens and other lawmakers stepped in. Stevens, 81, a senator since 1968, has enormous clout on Capitol Hill as chairman of the Senate Appropriations Committee. He introduced language that changed the Alaska Native Claims Settlement Act in 1992 to enable the corporations to be treated preferentially as small businesses for federal contracting.

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