Category Archives: Contracts

Polling for Preference

A new Zogby poll on contracting preferences finds that when it comes to awarding government contracts, the majority favors the (rather common sense) approach of awarding contracts to the lowest qualified bidder.  Of course, those who have experience with the thorny thicket of government contracting rules know that this is far from the norm.  We’ve written in this space about the prevalence of preferences for minority businesses (specifically Native Hawaiian and Native Alaskan) and that’s just the beginning.

However, the poll found that overall, only 34% favored preferences for women or minority-owned businesses (though unsurprisingly, that number shifted according to certain demographic factors), and there was a decided bias for awarding state contracts to businesses within that state or federal contracts to businesses within the country.  On the whole, women were more likely to favor preferences than men and older respondents were more likely to support preferences in general.

In the latest Grassroot Institute newsletter, we had our own poll question on preferences–namely whether you think that the government grants listed on this site should continue.  If you haven’t had the chance to vote yet, be sure to visit the poll and do so–we’ll keep you updated on the results.

Hearing on Native Hawaiian Contracting Preferences

If you’ve been following our notes on questionable contracting preferences for Native Hawaiian Organizations and Alaska Native Corporations, you’ll know that a few hardworking journalists have been raising questions about these practices, most notably in Hawaii Reporter and the Washington Post.  (Hawaii Reporter has found that Native Hawaiian organizations have been able to use this special status to gain $500 million in reduced-competition or no-bid contracts since 2005.)

Well, finally someone is responding to the questions being raised about the fairness and efficacy of this system.  Senator Inouye has called for hearings on the SBA contracting preference rules.

Oh no–not to pursue the issue about the propriety of the preferences.  Don’t make me laugh.  Senator Inouye would cut taxes or dance nude on Leno before doing that.  No, Senator Inouye is calling for these hearings in order to give supporters of the preferences (especially the organizations that benefit from them) the chance to publicly justify and defend them.  Ain’t democracy grand?

More on Native Hawaiian Companies

For those who were intrigued by the Hawaii Reporter investigative work on the rise of Native Hawaiian Companies (and their somewhat incestuous relationship with government spending and granting), there’s more to be learned via the rise of Alaska Native Corporations.  A recent piece from the Alaska Dispatch sends about the success (and questions it raises) of the ANCs that gives a clue to where Hawaii may soon be headed:

In the face of explosive growth, and the huge financial successes and sometime extreme abuses that have occurred along the way, Alaska Native Corporations have come under heightened scrutiny, most notably by U.S. Senator Claire McCaskill (D-Mo.), who has pushed to end the contracting privileges of ANCs. It seems that for every success story about a company that’s used 8(a) contracting as a springboard to independence, there’s a concern raised somewhere about someone abusing the system. To combat the negative press and defend the privileges of indigenous people to fully engage their rights as uniquely situated business owners who are working for not just a handful of individuals but for entire communities, advocacy groups like Native 8(a) Works have also cropped up.

. . . .

This year news stories in Alaska and beyond have chronicled questionable contracts, high paid executives, and whether the money is making it back to the people Alaska Native Corporations are congressionally mandated to help — the impoverished people and communities of their region of origin. Most recently, articles by the Washington Post and ProPublica demonstrate how imperfect and thorny the intersection the of the U.S. government’s tribal obligations with politics, wealth and poverty, corporations and shareholders, taxes and accountability, can be.

Native Hawaiian organizations and their subsidiaries have only in the last several years begun to navigate the government contracting privileges that Alaska Native corporations have spent two decades learning to fully engage. If NHOs continue to follow the path cut by ANCs, they may well encounter great success. Should they find it, they can expect plenty of tough questions about what they’re doing, how they’re getting it done, who’s making money and who’s not, and whether taxpayers are getting a good value along the way.

Native Hawaiians and Fed Contracting Preferences

If you have a strong stomach for pork and no family history of high blood pressure, I highly recommend the latest article in Hawaii Reporter on federal contract preferences for Native Hawaiian companies. If you live in a cave without access to television or radio (which might make me wonder how you’re reading this blog), you’ll even be surprised to see that Senator Inouye figures heavily in the awarding of lucrative federal contracts to Native Hawaiian-owned businesses.  If nothing else, the article demonstrates that the stereotype of Native Hawaiian businesses as struggling shoestring operations desperately in need of help is rather ludicrous.  Unless one is so fortunate as to consider $738 million over ten years mere pocket change.  Some highlights from the article:

A handful of Native Hawaiian-owned companies used federal contracting preferences authored by U.S. Sen. Daniel Inouye, D-HI, to land some $500 million in non-bid or reduced competition government work since 2005, according to federal purchasing records.

Officials, employees and partners of many of the same companies donated nearly $100,000 during the same period to the Inouye election campaign and $100,000 more to other members of Hawaii’s congressional delegation, files of the Federal Election Commission show.

. . . .

One of the most successful local companies to land federal contracts is Akimeka Technologies, LLC.

From 2005 to 2010, Akimeka received some $67 million in federal contracts, according to two U.S. government procurement websites.

The company that changed its name this year to Ke’aki Technologies (http://www.keakitech.com/) is now part of a joint business venture called Manu Kai.

Last year, Manu Kai received a $738 million, 10-year contract award from the U.S. Navy to support base operations at the Pacific Missile Range Facility on Kauai.

. . . .

Officers and employees of Akimeka/Ke’aki donated $57,500 since 2005 to the political campaigns of Inouye and other prominent Hawaii Democratic politicians, including former Congressman and now-Governor Neil Abercrombie and Congresswoman-elect Colleen Hanabusa.

. . . .

None of the NHO subsidiaries operating here that have received federal contracts is willing to discuss in detail the amount of money they have dedicated to improving the lives of Native Hawaiians.  Few even responded to requests for such information.

David Cooper, president of The Hana Group, Inc. http://www.thehanagroup.com and HBC Management Services, Inc., http://www.thehanagroup.com/ two NHO subsidiaries that have received some $53 million in federal contracts since 2005, said the companies provide financial support to their non-profit parent, Pacific American Foundation.