WASHINGTON – Continuing her oversight of waste, fraud, and abuse in contract management, U.S. Senator Claire McCaskill, chairman of the Subcommittee on Financial & Contracting Oversight, this week demanded answers from the Small Business Administration (SBA) about rules designed to improve oversight of Alaska Native Corporations, the multi-million dollar federal contracting companies that participate in the SBA's small and disadvantaged business contracting program.
"As you know, in the 1980s and 1990s, Congress passed a series of laws which made ANCs eligible for federal contracting opportunities, including SBA's 8(a) program," McCaskill wrote. "Since then, many ANCs have grown to the multi-million dollar corporations that are among the largest federal contractors. In 2009, I held a hearing that highlighted my concerns about ANCs' participation in the 8(a) program, including a lack of oversight by SBA, the use of ANCs to circumvent the federal contracting process, and that the benefits were not reaching disadvantaged Alaskan natives."
Following McCaskill's 2009 investigation of ANCs that found the SBA allowed these frequently large organizations to receive unlimited, high-value government contracts without competition while providing only minimal benefits to their communities, the SBA put in place rules to tighten requirements for ANCs in ventures with companies unaffiliated with the SBA's small and disadvantaged contracting program and to require ANCs to report the benefits they provide to their communities.
To ensure these procedures are being followed, McCaskill's letter requests the SBA provide a list of joint venture contracts awarded under the program where an ANC was a party, documentation of the SBA's oversight of these new rules for joint ventures and follow-on contracts, and all reports filed by ANCs detailing the amount of benefits flowing back to their communities.
McCaskill has introduced legislation to crack down on waste and abuse in contracting by eliminating the unique government contracting preferences and loopholes for ANCs. Along with Republican Senator John McCain of Arizona, she also previously demanded answers from the Department of Defense in the wake of a Washington Post article about the indictment of two Defense Department officials and one senior official of an ANC who allegedly conspired to defraud the government of more than $20 million.
Click HERE to read highlights of McCaskill's fight for stronger accountability in Washington.