Friday, June 17, 2011

Outsourcing the Drug War: Native American Contractors Respond

(The following is a letter that the Center for International Policy received in response to a recent blog post, "Outsourcing the Drug War," about the outsourcing of counternarcotics operations.  As the contractors' association notes, other Border Lines articles have critically examined the preferential contracting of Native American companies, particularly in immigrant detention.  These include:

Friday, January 22, 2010

Immigration Detention Centers Operated by Alaska Native Corps Faced Hunger Strikes and Protests

Saturday, January 9, 2010

Native American Firms Profit from Detaining Immigrants

Tuesday, November 10, 2009

Thursday, November 5, 2009

Native Corporations as National Security Corporations

Tuesday, November 3, 2009

Native Americans Profit from Abusive Immigrant Detention and Billions of Dollars in National Security Contracts

I will respond to the letter next week, and look forward to the possibility of generating more public discussion of this preferential contracting system.)
June 16, 2011

Mr. William Goodfellow
Executive Director
Center for International Policy
1717 Massachusetts Ave. NW, Suite 801
Washington, DC 20036

Dear Mr. Goodfellow:

I am writing in response to the Center for International Policy’s (CIP) “Border Lines” blog run by Tom Barry. As the leading voice for Native Enterprises, the Native American Contractors Association (NACA) takes serious issue with Mr. Barry’s continued mischaracterization of Alaska Native Corporations (ANC) in this online forum.

CIP has misled its observers regarding the role, function, value and purpose of ANCs. For example, in Mr. Barry’s latest blog, entitled “Outsourcing the Drug War” (June 9, 2011), he wrote:

“Over the past several years McCaskill has made a compelling case that better oversight of federal government outsourcing is needed. With respect to counternarcotics contracting, her subcommittee points, for example, to government’s continued use of no-bid contracts to Native Alaskan Corporations and other firms that lack oversight and accountability… Typically, the ANCs serve as fronts for major defense and other federal contractors like Lockheed Martin, which are the hidden partners in these outsourcing deals.”

Mr. Barry’s suggestion that ANCs lack oversight and accountability is entirely false. ANC performance standards must be met on all awarded federal contracts. What’s more, new regulations by the Small Business Administration (SBA) will require ANC 8(a)s to expand financial reporting which will document how profits are helping their Native communities. ANCs are also required to provide shareholders access to detailed records documenting financial performance and operational activities. None of these facts were referenced in Mr. Barry’s story. Mr. Barry also failed to inform viewers that Native corporations are no different from other contractors in their ability to hire subcontractors to responsibly meet the needs of each federal award. This is a common practice among all federal contractors. Mr. Barry also overlooks the fact that on federal service contracts, ANCs are required to perform at least 51 percent of each award.  In many cases, ANCs perform far in excess of this baseline threshold.   Mr. Barry’s statement that ANCs are “fronts” advances an uninformed viewpoint perpetuated by motivated critics of these hardworking enterprises.

In an earlier blog entry entitled “Native American Firms Profit from Detaining Immigrants” (June 10, 2010), Barry stated:

“In 1986 Congress passed legislation that allowed ANCs to participate in the Small Business Administration's (SBA) 8(a) program. Since then, Congress has extended special procurement advantages to 8(a) ANC firms, such as the ability to win sole-source contracts for any dollar amount. A Governmental Accounting Office study in 2006 lambasted the lack of oversight and accountability by government agencies in issuing sole-source contracts to the ANCs.”

The same GAO report -- which included an exhaustive review of ANC contracts, operations, and benefits -- also found no evidence whatsoever of any abuse or wrongdoing by an ANC.  Additionally, the report noted that ANCs are in fact providing significant benefits to their Alaska Native shareholders. The report did recommend increased oversight of ANCs in government contracting, which NACA, the National Congress of American Indians, the National Center for American Indian Enterprise Development and ANCs supported. The joint recommendations may be viewed here.

In another blog entry entitled, “Rise of the Native National Security Corporation,” (November 10, 2009), Mr. Barry wrote:

“Native American corporations, led by dozens from Alaska, are coming under fire in Congress for their preferential access to billions of dollars in defense, intelligence, and homeland security contracts – and because of the often shoddy, largely unaccountable work on national security and homeland security contracts.”

ANCs are skilled government contractors that provide exceptional value for the U.S. government. These businesses win contracts because they are diversified, experienced companies that offer superior quality and service. All ANC contracts are negotiated and thoroughly scrutinized by knowledgeable contracting officers who understand the federal marketplace and responsibly represent the interests of U.S. taxpayers. ANC participation in the 8(a) program is an important part of honoring this promise. Alaska Natives sacrificed for these opportunities.

In the same post, Barry continued:

“ANCs captured a flood of 8(a) contracts in 2000-2008 valued more than the stated maximum. In that eight-year period the federal government issued $6.3 billion in contracts to ANCs like Ahtna, Chugach, ASRC Management Services, and Chenega that far out-stripped the $3.5 million set by the federal government to give preference to small businesses.”

Here, Mr. Barry irresponsibly suggests ANCs have done something wrong or improper, when in fact their ability to win contracts of higher value compared to  other 8(a) companies is entirely legal and appropriate – for good reason. Unlike smaller 8(a) companies that support only one or two individual business owners, ANCs collectively support hundreds, in some cases thousands, of disadvantaged individuals. In order for ANCs to fulfill their mission and make a meaningful difference in the lives of Native shareholders, ANCs require access to larger government contracts.

In one of Barry’s earliest blogs on ANCs entitled, “Native Corporations as National Security Corporations” (November 5, 2009), he wrote:

“At the heart of the mounting criticism of Ahtna and other Native American corporations, particularly the ANCs and the numerous Alaska Native Village Corporations, is the breakdown and abuse of federal contracting. Preferences are given to these Native American corporations in federal procurement as part of an affirmative action social and economic policy framework that was intended to offer economic development opportunities to impoverished, disadvantaged communities. But the preferences have functioned as shields to deflect competition, to gain access to no-bid contracts, and to pass the bounty of federal defense, homeland security, energy, and services contracts to non-Native partners.”

Mr. Barry’s characterization dismisses the true reason why ANCs were originally formed. Nearly 40 years ago, the U.S. promised ANCs important economic development opportunities in exchange for the forfeiture of millions of acres of Alaska Native land worth trillions in oil that has helped power our nation’s economy. ANC participation in the 8(a) program honors this promise.  ANCs are fulfilling their mission to lift the economic condition of Alaska Native people. According to the ANCSA Regional Association 2010 annual report, since the
formation of ANCs from 1970 to 2007:

•             The Alaska Native high school graduation rate increased from 14 percent to 46 percent.
•             The proportion of Alaska Native people graduating from a four-year college increased from one percent to eight percent.
•             Inflation-adjusted household income rose by 50 percent.
•             The proportion of Alaska Native people living below the poverty line decreased from 47 percent to 22 percent.
•             The proportion of Alaska Natives with incomes at 200 percent of the poverty level or greater rose from 29 percent to 54 percent.
•             The proportion of Alaska Native households without complete plumbing dropped from 51 percent to 13 percent.
•             In 2008 alone, the twelve regional corporations distributed roughly $171 million in dividends – and more than ten percent of their employment base represented Alaska Native individuals.
•             ANCs made contributions of $11.1 million to 3,200 recipients and endowments in 2008 alone as well.

I see from CIP’s website that a main part of the organization’s mission is to protect human rights. Ironically, ANCs help do exactly that for the Alaska Native shareholders they serve.  Alaska Native people have endured centuries of intense struggle and neglect. While ANCs are having a positive impact on the overall community, Alaska Native people still remain one of the most impoverished populations in our nation.  This will change, provided ANCs have continued access to programs like 8(a) that offer economic self-sustainability to advance their communities.

Had Mr. Barry contacted our organization for comment, or had he conducted even a basic level research on ANCs, he could have learned these facts and accurately portrayed ANCs to the CIP community. We hope that, in the future, Mr. Barry will refrain from trafficking baseless accusations about ANCs and will instead present an objective, factual depiction of ANCs in any future coverage of the issue. We encourage him to visit <>  for additional information.


Executive Director
Native American Contractors Association


Eric Horace said...

Mr Barry, It has been a month since you wrote you would respond to NACA's response. More than the week you had written you would. Interested in how you will respond to some of NACA key points, do you still intend to do so?

Tom Barry said...

Hello Mr. Horace: You're right, of course. Have you seen the series of letters from NACA making the same "key points" in response to investigative journalism (ProPublica, WashPost, USA Today )about this scam?
Got caught up in other things, but will get to this. Thanks for the reminder. Tom