Alaska Native Corporation

How were they created

Congress passed the Alaska Native Claims Settlement Act of 1971 in response to a rise in native activism and pressure from oil companies to smooth the path for a trans-Alaska pipeline after oil was discovered in 1968. The act allotted 40 million acres of land for division among 12 regional native corporations and 220 village corporations. The law was intended to settle longstanding land claims by Alaska natives and provide economic opportunities. Alaska natives and descendants born before 1971 were allowed to receive 100 shares in their village corporation and regional corporation.

In 1975, a 13th corporation formed to represent Alaska natives residing outside the state. Over the years, some village corporations merged with each other or with their regional corporation. Today there are 198 village corporations, according to the Alaska Division of Banking and Securities.

In 1986, Congress passed legislation that allowed ANCs to participate in the Small Business Administration's disadvantaged business program, known as the 8(a) program, which sets aside federal contracts for minority-owned or other disadvantaged companies. With strong advocacy from Alaska Sen. Ted Stevens, Congress later extended to ANCs additional special 8(a) benefits, such as the ability to win no-bid contracts for any amount and to own multiple subsidiaries in the program. Other participants do not have those advantages.

What special contracting privileges do ANCs have?

Congress has given ANCs contracting advantages that other minority businesses don't have.

• While other participants are limited to $3.5 million contracts for services (or $5.5 million for goods), ANCs have no limit and often get no-bid contracts worth tens of millions of dollars.

• While other participants are allowed to go through the SBA 8(a) program only once before graduating, ANCs can remain in the program as long as they keep creating new subsidiaries. A firm graduates the program after nine years or when it has grown to meet industry standards for number of employees or annual revenue.

• While other companies have to prove every year that they are economically and socially disadvantaged, ANCs are considered permanently disadvantaged and can stay in the program -- even those that are among the 100 biggest government contractors.

• While other companies have to be run by a minority, ANCs and their subsidiaries often have non-native managers.