The First of a Three Part Series
By Eric Sherman
Native community and individually-owned enterprises have come a very long way over a fairly short time. The economic impact of these endeavors have become extraordinary.
The Indian Gaming Regulatory Act (IGRA) served as a catalyst to tribal economic sufficiency and self-reliance. IGRA established the jurisdictional framework governing Indian gaming, ultimately giving tribes oversight of their gaming enterprises.
What started out with just one tribe operating bingo has now grown into more than 460 gaming facilities, operated by over 240 tribes in 28 states. In 2013, Indian gaming brought in over $28 billion in gross revenue. Of this, tribes netted roughly 40 percent—a tremendous boost to their economic development programs, and sustaining both Native- as well as non-Native-owned businesses.
Tribal and individually owned Native businesses subsequently ventured into the government contracting industry with success. Today, the government’s business database shows more than 400 individually-owned Native businesses, and just over 200 parent tribal community-owned corporations in government contracting.
In tandem, the Alaska Native Claims Settlement Act (ANCSA) transferred Alaska Native land claims to 12 regional corporations and more than 200 village corporations. Altogether, these corporations received up to 44-million acres of land and were paid $963 million, which was divided among regional, urban, and village corporations. ANCSA paved the way for Alaska Natives to build capacity through for-profit businesses with the goal of self-sufficiency.
Finally, the Native Hawaiian Organization Association was added to the mix of Native economic development opportunities through changes to the Small Business Act, allowing for-profit companies to be owned by non-profits whose missions encompass social, economic and cultural needs for the Hawaiian people.
With these major propellers of economic development in place, what’s next? How can we extend the benefits to the average Native American to include smaller businesses in the paradigm?
The answer is found within the Native 8(a) Contracting Program, which operates in sync with the U.S. Small Business Administration (SBA) 8(a) Business Development Program. Companies in the Native 8(a) Program are owned by Native communities, and through participation in the program, they are able to grow into successful viable entities that are very competitive, and are able to return tremendous benefits to the Native communities they serve. Participation in the program is based on a common value to operate in a way to meet the holistic needs of Native communities.
As an example of success in the Native 8(a) Program, Ho-Chunk Inc., established in 1994 by the Winnebago Tribe of Nebraska, has grown to more than 1,000 employees with operations in 16 states and nine foreign countries. Federal contracting is the largest benefactor in Ho-Chunk’s commerce.
Additionally, the Chickasaw Nation is largely vested in federal contracting,. It employs more than 13,000, and is the owner of Chickasaw Nation Industries, a business enterprise with 10 LLCs operating within its corporate structure.
Finally, Chugach Alaska Corporation becamebankrupt once after the Exxon-Valdez oil spill and decimated its fishing industry. Today, it is a successful mix of largely federal and some commercial companies that underpin Chugach’s 100-Year Plan for economic development for its shareholder citizens.
Unquestionably, these examples are remarkable and set the standard, but where does it all begin? It’s been mentioned that the Native 8(a) Program is key here, but, more importantly, what does the roadmap to success look like for the aspiring Native business owner?
SBA 8(a) contracting is certainly an alluring prospect for the Native entrepreneur, yet it is full of unknowns and can be daunting. Many who wish to enter the federal marketplace wondering, “Where do I start?” The good news is that it can be done. The federal procurement system holds a myriad of opportunities for the budding enterprise.
The somewhat less good news is that it will take time, patience, and elbow-grease to break into that space. Anyone hoping to enter into the federal contracting arena should ask and have answers to the following questions prior to seeking certification in the Small Business Administration’s 8(a) business development program.
Next month’s column will feature specific questions that will help Native community-owned and individually-owned enterprises. ♦