Piliero, Mazza and Pargament, PLLC.

Piliero Mazza & Pargament, PLLC Vol. 5, Issue 3 March 2003

Addressing Tribal and Alaska Native Corporation
Legal and Business Issues


The articles shown here are excerpts -- if you'd like to subscribe to Tribal Advocate, please contact Susan Brock at (202) 857-1000 or at


A R T I C L E S


REGULATIONS -Proposed Regulations May Increase Federal Contracting Opportunities for Small Businesses


FEDERAL - The Appropriations Outlook for Native American Interests in 2003


SMALL BUSINESS - Native American Small Businesses Get Boost from the Air Force


QUESTIONS AND ANSWERS - Native Hawaiians and SBA's 8(a) Program


SMALL BUSINESS - SBA's Ombudsman and the Regulatory Fairness Board


REGULATIONS

Proposed Regulations May Increase Federal Contracting Opportunities for Small Businesses

In the November/December 2002 issue, the Tribal Advocate reported on the Small Business Administration's findings on contract bundling and its adverse effects on small businesses. Contract bundling is again in the forefront. On January 31, 2003, the SBA, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council issued proposed regulations on contract bundling. The proposed regulations are designed to implement the recommendations of the Office of Management and Budget (OMB) in its October 30, 2002, report entitled, "Contracting Bundling, A Strategy For Increasing Federal Contracting Opportunities for Small Businesses." The following is a brief analysis of how several of the proposed regulations may improve contracting opportunities for small tribal and ANC businesses that do business with the federal government.

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FEDERAL

The Appropriations Outlook for Native American Interests in 2003

On February 20, 2003, President Bush signed into law a $397 billion omnibus spending bill, finishing out the 2003 appropriations cycle. After months of partisan bickering and debate over spending priorities, Congress presented the President with a bill that puts defense and homeland security spending at proportionately higher funding levels, while keeping nondefense spending struggling to keep up with inflation. Nondefense cuts, compounded by a lackluster economy and widespread budgetary droughts at the state level, spell a trend that does not present an encouraging fiscal outlook for Native American interests.

The bill contains a total spending tab of around $2.27 billion for the Bureau of Indian Affairs. This amounts to a $59 million increase over last year's budget allocation for the bureau. Tribal priority allocations received $777.5 million, covering such expenses as funding for tribal governments and community development. The Department of Interior received $19.15 billion for fiscal year (FY) 2002, the package as enacted for FY 2003 scales back funds roughly $80 million.

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SMALL BUSINESS

Native American Small Businesses Get Boost from the Air Force

The U.S. Air Force, in an effort to promote Native American small businesses nationwide, recently took a step in the right direction. Joseph Diamond, director of the Department of Defense Air Force Office of Small and Disadvantaged Business Utilization (SADBU), signed a memorandum in Salt Lake City, Utah, that would expand Air Force efforts to utilize Native American and tribally-owned small businesses in government contracts. During the signing ceremony, Diamond noted, "the Native American Initiative calls for focused outreach and training, matching requirements with capabilities, and leveraging partnerships in order to enhance opportunities for Native American and Tribally Held Firms to compete for Air Force Contracts."

The program, launched in 1998, currently provides federal contracts to Native American small businesses in five states: Montana, Wyoming, North Dakota, South Dakota, and Arizona. Tribal groups and economic developers are hopeful that Utah will be able to establish an effort to bring contracting opportunities to their state. State officials appear optimistic about their ability to make tribally held businesses more competitive. Carey Wold, research consultant for Utah’s Division of Indian Affairs said: "the tribes must have the capability to meet the contract needs, including quality standards and budget requirements and have the ability to complete contracts on time."

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QUESTIONS AND ANSWERS

Native Hawaiians and SBA's 8(a) Program

Yes. There are several ways in which Native Hawaiians may participate in the 8(a) program. Small firms that are majority-owned and controlled by Native Hawaiians who are economically disadvantaged may apply for 8(a) status. Firms owned by economically disadvantaged Native Hawaiian Organizations (NHO-owned firms) are also eligible to participate in the 8(a) program. Generally, 8(a) firms must be small, unconditionally owned by one or more socially and economically disadvantaged individuals, and must have potential for success.

Native Hawaiians are considered presumptively socially disadvantaged under the SBA regulations. Thus, firms seeking eligibility based on ownership by a Native Hawaiian must provide information on the economic disadvantage of the Native Hawaiian, but not on his or her social disadvantage. In order to show economic disadvantage, an individual of good character must show that his or her ability to compete in business has been impaired due to diminished access to credit and capital as compared to others in the same business who are not socially disadvantaged. Among other things, the SBA will examine personal income for the past two years, personal net worth, and the fair market value of the individual's assets. In the initial application, the individual's net worth must be less than $250,000. This individual must own and control 51 percent of the company. Such individuals may only use their status as a disadvantaged individual to participate in the 8(a) program one time.

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SMALL BUSINESS

SBA's Ombudsman and the Regulatory Fairness Board

Small tribal enterprises and ANCs may not be aware of the Small Business Administration's Office of the National Ombudsman or the Regulatory Fairness Board. Yet, the National Ombudsman and Board stand ready to assist small businesses when confronted with unfair regulatory practices by federal agencies.

Congress created the position of National Ombudsman in 1996 with passage of the Small Business Regulatory Enforcement Fairness Act (Act). The Act was in response to a need for a balance between excessive and necessary enforcement of federal regulations. The ombudsman has the authority to hold hearings nationwide in order to give small business owners, non-profits and small governments (including tribes) an opportunity to present issues of concern in the federal regulatory enforcement environment. Small businesses may also present their concerns to the office through the ombudsman's office in Washington, D.C. The ombudsman then presents these findings to the appropriate federal agency for review and response. Michael Barrera, who was appointed in August 2001, is the current ombudsman.

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