In Alaska, small business is big business
June 24, 2011
With new rules in place to help make sure small, disadvantaged businesses don’t fall victim to predatory partners or themselves mishandle their money, Alaska’s congressional delegation has pledged to fight continued attacks by outsiders on Alaska’s Native-run firms.
U.S. Senators Mark Begich and Lisa Murkowski made the comments in prepared remarks delivered by video to attendees of the National 8(a) conference, under way this week at the Marriott in downtown Anchorage.
“It is frustrating for my colleagues to continue to criticize this program without knowledge of the real benefits it provides across the country,” Begich said, referring to recent efforts by U.S. Sens. John McCain and Claire McCaskill to trim the benefits Alaska Native-run businesses have access to under a government-run business development program.
“I intend to strengthen this program and not stand by as it is continually attacked without merit,” said Murkowski, who, like Begich, was adamant that the business activities of Alaska Native corporations and the businesses they own “play a central role in the economic success of rural communities.”
Small, disadvantaged companies gain access to the perks via enrollment in the U.S. Small Business Administration’s 8(a) program, which is designed to help small businesses succeed and grow. Because they were created to benefit entire communities, Alaska Native and village corporations are allowed to land some very large contracts without competition. And, there are a lot of them.
Currently, 221 companies in Alaska are registered to participate in the 8(a) program, and the lion’s share of them are Native-owned.
McCaskill has long believed that too little of the money flows back to the communities Alaska Native 8(a) companies were created to benefit. Coupled with some high-profile scandals alleging, and in some cases documenting, abuse of the program, ANC 8(a) firms have operated under intensified scrutiny in recent years. New rules implemented this year are meant to weed out waste, fraud and abuse and ensure that participating companies are using the program in the ways it was intended.
Like Begich and Murkowski, the highest ranks at the SBA are convinced much of the criticism about ANC’s and how they operate is ill-placed. “Too many people who may have a negative view of ANCs, I firmly believe, [do so] because they don’t understand how the program works,” said SBA Deputy Administrator Marie Johns after touring a factory in Anchorage that manufactures curved-edge traditional Eskimo knives known as Ulus.
The Ulu Factory isn’t an 8(a) firm, but it did benefit through SBA financing when it was ready to expand its operations and build a new facility, and is representative how SBA works to help small businesses and struggling communities in a myriad of ways, Johns said.
While her visit to Alaska introduced her to new foods like seal meat and reindeer sausage, it was through more intimate settings that the Washington-D.C. based bureaucrat said she got a real taste of what Alaskans face, and what they need to succeed. To do this, she traveled to Tatitlek village, an Alutiiq village south of Valdez in Prince William Sound and home to a village corporation involved in the 8(a) program, and also spent time with Native village and business leaders early Wednesday in Anchorage.
“Nothing beats hearing from companies directly,” she said. “I would never presume that in Washington D.C. we have a lock on good ideas.”
Johns believes that in an era when the country is facing the greatest economic downturn since the great depression, small businesses, including those with access to the 8(a) program, have played an essential role in turning things around.
“It has been a major economic engine for business development and job creation in underserved markets,” she said.
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