Piliero Mazza & Pargament, PLLC Vol. 5, Issue 9 October 2003
Addressing Tribal and Alaska Native Corporation
Legal and Business Issues
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A R T I C L E S
SMALL BUSINESS - SBA GUIDANCE CLARIFIES AFFILIATION RULES
ON THE HILL - House Passed Legislation Could Negatively Impact the HUBZone Program
COURT WATCH - AFGE Files Suit to Overturn Preference for Native American Contractors
GOVERNMENT CONTRACTING - EPA’s Proposed Rule Would Require Small Business Certification
SBA GUIDANCE CLARIFIES AFFILIATION RULES
On August 21, 2003, Area VI of the Small Business Administration issued a Size Determination in connection with an (8) firm owned by an Alaska Native Corporation, Chenega Technical Products, LLC (Chenega). In this opinion, the SBA denied the challenges of five unsuccessful offerors for an Army requirement and addressed several affiliation issues that should be of interest to ANCs and tribes. Of the five protests, three are particularly noteworthy.
At the time that its proposal for this small business set-aside was submitted, Chenega was owned 51% by Chenega Corporation and 49% by Piquniq Management Corporation (Piquniq). Chenega Corporation is an ANC and Piquniq is a direct and wholly-owned subsidiary of Arctic Slope World Services (ASWS), a subsidiary of Arctic Slope Regional Corporation (ASRC), another ANC. The set-aside had been assigned NAICS code 333319 with a size standard of 500 employees. Chenega had fewer than 500 employees; however, Chenega Corporation had over 1,300 employees and Piquniq had more than 800.
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ON THE HILL
House Passed Legislation Could Negatively Impact the HUBZone Program
Two pieces of legislation currently pending in Congress could adversely impact contracting opportunities for HUBZone companies and limit the program’s effectiveness in promoting economic growth on Indian lands.
In June, the House unanimously passed H.R. 1460, the Veterans Entrepreneurship and Benefits Improvement Act of 2003, which, among other things, establishes a new set-aside for Qualified Service-Disabled Veterans to perform certain sole source contracts. The bill would give federal agencies the discretion to create sole source awards for disabled veteran-owned and controlled businesses. The Act would allow disabled veteran-owned businesses to get sole source awards of up to $5 million for manufacturing contracts and $3 million for non-manufacturing contracts. The legislation’s sponsor, Congressman Rick Renzi of Arizona, said the bill "will help make entrepreneurship a more integral part of rehabilitation for disabled veterans and bolster the opportunity for disabled veterans to foster home-based businesses." Federal agencies generally have a goal of awarding three percent of government contracts to disabled veteran-owned businesses. Sponsors of the bill believe this is a step toward achieving that goal.
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AFGE Files Suit to Overturn Preference for Native American Contractors
On September 5, 2003, the American Federation of Government Employees filed suit with the U.S. Supreme Court seeking to overturn the preference for Native American contractors included in the Defense Appropriations Act (Pub. L. No. 106-79). AFGE contends that the language in the Act violates the equal protection and due process guarantees of the 5th amendment and stems from the Chugach award at the MacDill and Kirtland Air Force Bases. It is not yet known if the Court will agree to hear the case.
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EPA’s Proposed Rule Would Require Small Business Certification
Another small business certification issue surfaced this past summer. On July 24, 2003, the Environmental Protection Agency issued a proposed rule to bring its affirmative action programs in line with the dictates of the Supreme Court ruling in Adarand Constructors v. Pena. That decision held that affirmative action programs are subject to strict judicial scrutiny, must be narrowly tailored, and address a "compelling government interest" such as remedying past racial injustices. To accomplish this, the proposed rule would rename and revise EPA’s minority business and women business programs and revise procurement procedures for EPA’s financial grant recipients to use when contracting with those businesses. At the heart of the rule is a requirement that small minority and women-owned businesses who wish to do business with EPA grant recipients certify their status with EPA. Both tribal governments and Native American-owned businesses could be impacted by this proposed rule.
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