Federal lawmakers yesterday called for a congressional investigation into a flurry of homeland-security-related contracts that were awarded after the 2001 terrorist attacks to Alaska Native Corporations, many of them without competitive bidding.
Rep. Thomas M. Davis III (R-Va.), chairman of the House Government Reform Committee, and the panel's ranking Democrat, Rep. Henry A. Waxman (Calif.), also requested contract documents from the Department of Homeland Security, the Pentagon and the State Department.
Rep. Thomas M. Davis III (R-Va.) wants to review contracts from several agencies.
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The lawmakers asked the Government Accountability Office, the investigative arm of Congress, to examine the reliance on Alaska Native Corporations for homeland security and military contracts worth as much as $2.2 billion.
"This could be turning into a scam because of the sole-source nature of these contracts," Davis said. "The purpose of federal procurement is to make sure taxpayers are getting their dollars' worth."
William K. Walker, a Washington lawyer who advises several of the Alaska Native Corporations, said he welcomed the investigation.
"Let the light shine," he said. "If there's dirt, clean it up. If there's not, acknowledge that."
Chris McNeil Jr., chairman of the Native American Contractors Association and chief executive of one of the largest Alaska Native Corporations, Sealaska Corp., said in a statement that the contract program "is working as Congress intended -- finally building tribal, sustainable economies that train our people, return a profit to our tribal members (numbering in the tens of thousands), educate Native American children and raise our communities out of poverty."
Alaska Native Corporations have won contracts to provide security at military installations, maintain sophisticated scanning machines at ports and borders, build U.S. military bases and provide information technology assistance for the National Geospatial-Intelligence Agency.
Established in 1971 under the Alaska Native Claims Settlement Act to resolve historical land disputes, the corporations have been granted special contracting privileges because of provisions in federal law sponsored by members of Congress, particularly Sen. Ted Stevens (R-Alaska).
The privately held corporations, for example, are treated as small disadvantaged businesses as part of government efforts to encourage Native Americans to participate in federal contracting. The corporations are exempt from a $3 million federal cap on no-bid service contracts that apply to other minority small businesses. They do not have to be run by Native Alaskans, and they can subcontract much of their work, although they must perform at least 50 percent of the work.
Long-established contractors, many of whom say they never had a chance to bid on work that went to Alaska Native Corporations, have said in interviews that taxpayers are not benefiting from the system.
Government watchdog groups also question whether the practice is in the public interest. "This is exactly the kind of inquiry that should be taking place," said Danielle Brian, executive director of the Project on Government Oversight.
Davis and Waxman asked the GAO to determine why federal agencies are relying so heavily on Alaska Native Corporations, how frequently the firms enter into joint ventures with non-native-run corporations, how federal officials ensure they are receiving the best deal and what impact the money from the contracts is having on jobs, education and economic development for Native Alaskans.
"Large, no-bid federal contracts leave the taxpayer vulnerable to overcharges and poor performance," Waxman said.