Alliance will help small Native-owned businesses

By Alysa Landry
Special to the Times

WASHINGTON, July 11, 2013

Text size: A A A

A strategic alliance forged between the Native American Contractors Association and the U.S. Small Business Administration is expected to strengthen small business development in Indian Country.

The two entities signed the alliance June 28 in a historic move that combines resources and is expected to "spur new business growth and innovation" for businesses owned by American Indians, Alaska Natives and Hawaii Natives, said Chris James, assistant administrator for the Small Business Administration's Office of Native American Affairs. Nearly 240,000 Native-owned businesses operate in the U.S.

The alliance also gives the Native American Contractors Association, a national advocacy organization based in Washington, D.C., a stronger voice in defending the Native 8(a) program, a federal contracting program that promotes Native-owned small businesses.

"The alliance forms a personal relationship, it takes it to the next level," said Kevin Allis, director of the Native American Contractors Association and a member of the Forest County Potawatomi Community. "This makes relationships stronger so we can provide better services to our members, but it also bleeds over to all Indian Country companies."

NACA is a members-only professional advocacy group with a mission to preserve the rights of Native enterprises in government contracting. It works with members, including the Navajo-owned NOVA Corporation, to build business and enhance the relationships between Native entrepreneurs and the federal government.

But its oversight of the Native 8(a) program also benefits all Native-owned business endeavors, Allis said. NACA was formed in 2003 with a mission to be a voice for the Native 8(a) program, which can provide resources to entrepreneurs in poverty-stricken tribal communities.

The strategic alliance helps NACA safeguard the program, Allis said. Native enterprises employ more than 31,000 people nationwide, but they receive less than 1.5 percent of the total U.S. procurement.

"The program has been under the microscope," Allis said. "Being able to speak directly to the Small Business Administration makes the program stronger for everyone."

The Small Business Act of 1958 directs the federal government to purchase from small businesses. Section 8(a) of the act was the result of Civil-Rights-Era concerns that minorities, women, veterans and other small or disadvantaged groups did not have equal access to the federal marketplace. The program gives these businesses specialized access to the federal government as a customer.

In 1982, Congress extended the existing 8(a) program to Native businesses as a means for businesses owned either by individuals or tribes to enter the federal marketplace. Under the Small Business Act, amended in the 1980s and 1990s to permit all Native businesses to contract with the federal government, there is no cap on the dollar amount in the contract. This provision was created to acknowledge the benefit these enterprises provide to the entire tribal communities, Allis said.

Those benefits include keeping educated and working citizens in tribal communities and using company profits to bolster Native language, culture and customs and offer incentives to the rising workforce like scholarships and internship programs.

To qualify for the Native 8(a) program, companies must show both economic and social disadvantage. They also must be established businesses with more than two years of experience. About 2,000 Native-owned businesses are currently taking advantage of the Native 8(a) program, Allis said.

"It's very difficult to get established in Indian Country," he said. "Often they are in isolated communities that are not near metro areas or educational centers. The Native 8(a) program provides aid to communities and individuals that face more hurdles than others."

Navajo enterprises

Three Navajo enterprises are enrolled in the program, which certifies companies to do business with the federal government. After seven years, companies graduate from the program and exit, said Clara Pratte, executive director of the Navajo Nation Washington Office.

All three Navajo-area Native 8(a) industries are subsidiaries of Diné Development Corporation. NOVA was the first to take advantage of the program, and two additional enterprises - DDC Construction Services and DDC IT Services - joined the program within the last year.

Although the strategic alliance is not limited to the Native 8(a) program, the Navajo Nation can benefit greatly from it, Pratte said.

"The Navajo Nation has started to participate in a small way with the program," she said. "From the Navajo perspective, it is a very valuable tool for both small, mom-and-pop business and large, tribally owned enterprises."

The Native 8(a) program, which is highly successful among Alaska Native companies because of their for-profit status, can be especially beneficial to rural tribes like the Navajo, where unemployment is 50 percent or greater and government contracts can be more difficult to attain because of enterprises' government status.

According to a 2009 report from the Navajo Division of Economic Development, the number of people employed on the reservation has hovered at about 30,000 since 1991, despite a steadily increasing population. The division found that the Nation must create more than 3,500 jobs each year to maintain the status quo.

The Navajo economy suffers from a lack of "basic industries," or those that bring in money from the outside, the report states. About 75 percent of Navajo jobs are in hospitals, clinics, schools or establishments run by the federal, state or tribal government.

Basic industries, including agriculture, manufacturing and energy development can benefit from the Native 8(a) program and federal contracting, Allis said.

"The strategic alliance is an important tool," he said. "It strengthens relationships and makes the road easier for minority-owned businesses."