Alaska legislators protest no-bid justification requirement

Congressional delegation argues for more no-bid federal contracts to Native firms

By Dermot Cole    Alaska Dispatch News     March 25, 2015

FAIRBANKS — A federal budget rule requiring written justification for certain no-bid contracts topping $20 million has harmed Alaska Native corporations, according to the Alaska congressional delegation.

“It is our concern that the implementation of Section 811 has unnecessarily and negatively impacted Native community-owned contractors,” Sens. Lisa Murkowski and Dan Sullivan and Rep. Don Young said in recent letters to Defense Secretary Ash Carter, signed by 13 other members of Congress.

In 2009, Congress approved a defense bill amendment, known as Section 811, that required a written justification for sole-source contracts more than $20 million under the so-called 8(a) program.

The 8(a) program, set up under the Small Business Administration, is one of the major ways in which the federal government offers incentives to minority-owned businesses, including special provisions that have bolstered the fortunes of many Alaska Native corporations in getting large federal contracts.

The justification rule challenged by the congressional delegation orders government contracting officers to explain why a no-bid contract is a better deal for the government than a competitive bid when the amount is more than $20 million.

More than $2 billion in such sole-source contracts were issued in 2009 under the 8(a) program, dropping to $221 million in 2013, the Government Accountability Office said. Companies owned by Alaska Native corporations and Indian tribes are the chief recipients, while most of the participants in the small-business development program are not eligible.

The letters to the defense secretary said some Native corporations have found federal officials won’t work with them “out of fear of political scrutiny, even when a contract award may be justified.”

The three elected officials wrote the GAO has reported that “Section 811 has been improperly interpreted and, or improperly implemented.”

But the report they referenced, released in September, doesn’t make that broad allegation. The chief criticism in the GAO report is that federal agencies were too slow to implement the new justification requirement and contracting officers offered incomplete information. A lack of time was the main justification for no-bid contracts, the report said.        More…

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