Construction Law

New Rule Allows Subcontracts to Companies Owned by American Indian Tribes to Count Toward Small Business Subcontracting Goals

By Michael Payne

A new federal rule allows federal contractors to count subcontracts given to companies owned by American Indian tribes and Alaskan communities toward small business contracting goals. The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule amending the Federal Acquisition Regulation (FAR) to implement section 702 of the Emergency Supplemental Act, 2002, as amended by section 3003 of the 2002 Supplemental Appropriations Act for Further Recovery From and Response to Terrorist Attacks on the United States.

The law permits subcontracts awarded to Alaska Native Corporations (ANCs) and Indian tribes to be counted towards a contractor's goal for subcontracting with small business (SB) and small disadvantaged business (SDB) concerns. In addition, the law provides that subcontracts awarded to Indian tribes that are recognized by the Bureau of Indian Affairs in accordance with 25 U.S.C. 1452(c), and Indian-owned economic enterprises that meet the requirements of 25 U.S.C. 1452(e), may be counted towards the satisfaction of a contractor’s goal for subcontracting with SB and SDB concerns. Such credit is taken even where the ANC or Indian tribe may be ‘‘other than small’’ under the Small Business Administration (SBA) regulations.

Small-business advocates are concerned about the new rule and feel that it may be unfair.  Skeptics believe the agencies will funnel more contracts to native companies in an effort to take advantage of the benefits and convenience of working with larger contractors while getting credit toward their small-business contracting goals.

Full post as published by Federal Construction Contracting Blog on September 06, 2007 (boomark / email).