Piliero Mazza & Pargament, PLLC Vol. 6, Issue 8, September 2004
Addressing Tribal and Alaska Native Corporation
Legal and Business Issues
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A R T I C L E S
ASK THE ADVOCATE
Native Hawaiian Organizations and the SBA's 8(a) Business Development Program
Recently, a reader inquired about whether firms owned and controlled by Native Hawaiian Organizations (NHOs) are exempt from the ceiling applied to sole-source contracts issued through the Small Business Administration’s 8(a) business development program.
In short, NHOs have enjoyed the ability to receive sole-source 8(a) contracts of unlimited value ever since president Bush signed into law the 2004 Department of Defense (DOD) Appropriations Act (P.L. 108-87). Among hundreds of other provisions, this law placed NHO-owned firms in the same category as ANC- and tribally-owned firms for purposes of DOD sole-source 8(a) contracts (P.L. 108-287). On August 5, 2004, President Bush signed the fiscal year 2005 DOD Appropriations Act into law, thus extending the waiver for another year.
By way of review, in 1988, Congress passed the Business Opportunity Development Reform Act (BODRA) in order to curb dependence on 8(a) contracts. Section 303 of BODRA placed limits on sole source contracting under the 8(a) program, requiring competition for procurements exceeding $5 million in manufacturing industries and $3 million for all others. See 15 U.S.C. 637(a)(1)(D)(i)(II). Section 602 of BODRA exempted 8(a) program participants owned and controlled by economically disadvantaged Indian tribes and Alaska Native Corporations from these limitations, but did not extend the waiver to firms owned by NHOs.
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GAO Rules on Contract Bundling Protest
The newly renamed Government Accountability Office (GAO) issued an important ruling in early July to deny a protest claiming that the Air Force committed unfair bundling practices. In the matter of Teximara Inc., the GAO considered whether the Air Force properly decided to bundle several base operations support functions. GAO B-293221.2 (7/9/2004). As a result of cost comparison studies for seventeen functions at Keesler Air Force Base, the Air Force issued two bundled solicitations: one smaller bundle set aside exclusively for small business concerns, and the larger one open for competition. Teximara Inc., the protestor, alleged that the Air Force violated the Competition in Contracting Act (CICA) and the Small Business Act. Specifically, the protestor claimed that the contracting agency failed to maximize small business prime contracting opportunities because the work required by the larger contract would be difficult for a qualified small business to accommodate.
Federal law, including CICA and the Small Business Act, requires that if a contracting agency decides to bundle separate functions together under one contract or task order, the agency must identify specific benefits, assess the impact on small business contractors, describe actions designed to maximize small business participation at all levels, and identify alternative strategies. See 48 C.F.R. 7.107. The aim of this regulation is to make sure that the variety of work required under a contract does not de facto exclude small firms whose expertise may not be so broad. However, overarching concerns can justify the decision to issue a bundled solicitation—in this case, substantial cost savings resulting from cross-training employees and cross-utilizing equipment.
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ON THE HILL
The Native American Capital Formation and Economic Development Act of 2003
In April 2003, the Tribal Advocate reported on the introduction of Senate Bill 519 ("he bill) by Senator Ben Nighthorse Campbell. The bill aims to remove barriers to private capital financing that stand between tribes and the private sector. The Senate Select Committee on Indian Affairs held a hearing on the bill on July 21, 2004.
By way of background, the bill proposes to create a development bank, known as the Native American Capital Development Corporation (NACDCO), modeled on the international success of regional and global development banks. Its proposed strategy is twofold: first, to provide already-successful tribes, tribal enterprises, and individuals with an investment conduit; and second, to build an institution distinguished by its charter to concentrate its own profits on achieving Native American financial goals. NACDCO’s mandate includes building financial infrastructure for the Native American community through initiatives including incubating Native American financial institutions, helping such institutions provide mortgage and commercial loan services, and overcoming lending barriers that stand between private banks and Indian land. Further, NACDCO would maintain two separate funds whose work would focus on diagnosing economic problems affecting Native Americans and developing best economic and policy practices.
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Indian Law Cases Placed on Supreme Court Calendar
The Supreme Court calendar for its upcoming sessions includes three Indian law cases: City of Sherrill, New York v. Oneida Nation of New York, Docket No. 03-855; Cherokee Nation of Oklahoma v. Thompson, Docket No. 03-853 (Cherokee I); and Thompson v. Cherokee Nation of Oklahoma, Docket No. 02-1472 (Cherokee II).
In City of Sherrill, the city petitioned the Supreme Court for review of the decision of the United States Court of Appeals for the Second Circuit’s decision of the holding in favor of the Oneida Indian Nation of New York (Oneidas). The case revolves around whether properties of the Oneidas, a federally recognized Indian tribe, were subject to tax by the city.
Businesses operated by the tribe on certain parcels of property in New York refused to pay property taxes or collect sales taxes. The city attempted to evict the tribe but the Oneidas sued, claiming that the federal government had never approved the prior sales to non-members and that the property remained in reservation status.
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