Alaska Native Corporation 8(a) Graduates
Competing successfully in open markets nationwide
Interior shot of the JBER Emergency Operations Center; Eklutna Services LLC was contracted to “demolish, reconstruct, reconfigure, and remodel 8,500 square feet of several adjacent spaces into a sophisticated Emergency Operations Center,” according to the company.
Photo courtesy of Eklutna, Inc.
The US Small Business Administration exists to assist small business growth and development through loan guarantees, contracts, counseling sessions, and other initiatives. One of those is the 8(a) Business Development Program, which helps “small, disadvantaged businesses compete in the marketplace,” in large part through sole-source contracts.
According to the US Small Business Administration, the overall goal of the 8(a) Business Development Program “is to graduate 8(a) firms that will go on to thrive in a competitive business environment.” The 8(a) program is divided into two stages: a four year-developmental stage and a five-year transition stage, after which a company “graduates” with the expectation that it can compete in an open market for private and government contracts.
Many of the state’s Alaska Native owned companies have participated and graduated from the 8(a) program and are meeting the program’s goal with flying colors.
The scope of work of the JBER Emergency Operations Center included asbestos abatement, the renovation and construction of restrooms; and bulletproof glass and blast proof systems, among other installation and construction work.
Photo courtesy of Eklutna, Inc.
Eklutna, Inc. CEO Curtis J. McQueen says, “The 8(a) program has been huge and instrumental for a lot of corporations in the early days.” He explains that Eklutna was in a unique position compared to many of the other Alaska Native corporations: “We had opportunities on our own land and to build in Anchorage… opportunities that were not related to sole-source government contracting.” Eklutna has only one subsidiary that is an 8(a) program graduate, Eklutna Services LLC (ESL), which graduated in July 2015.
“We’re very proud of the fact that almost 80 to 90 percent of the work that ESL did while it was under the 8(a) program was not sole-source contracts,” McQueen says. “It was a small business and it was minority-owned, and to have a procurement avenue like the 8(a) was wonderful… but we stayed pretty busy on public projects and some of our own projects.”
ESL is a general contractor and has performed a variety of projects around Alaska, ranging from residential developments to industrial shop spaces to renovating the JBER Emergency Operations Center. In 2012 ESL finished the last two phases of the Powder Ridge project, a residential development in Eagle River comprised of approximately four hundred single-family homes. The company is currently working on Powder View, a residential project in Eagle River that includes fifteen acres purchased by the Anchorage School District for a new Elementary school as development progresses.
“They’ve become Eklutna’s main contractor, so if we want to build something ourselves, we have that option,” McQueen says. To date all of ESL’s projects have been in Alaska, “and that’s the other thing that’s made us unique.”
One of ESL’s current projects is construction of a new bridge (replacing the current bridge) for the Alaska Department of Transportation at Banner Creek (MP 295 Richardson Highway) with an expected completion date of 2017. “We feel proud that, while ESL has graduated, it’s still going strong and it really stood on its own from the very beginning and it continues to stand on its own now,” McQeen says.
Eklutna Services LLC won a competitively-bid contract in 2014 to construct the Pyramid Water Treatment Plant for the City of Unalaska; the project scope included installing a pre-manufactured metal building, associated piping and appurtenances, site work and grading, a discharge system, and other general construction work. Eklutna Services was the general contractor and LCG Lantech was the engineer and architect. Other contractors on the project, which was completed June 15, 2016, were Superior Plumbing & Heating, Sumner Electric, Pinnacle Mechanical Inc., and Bering Shai Rock & Gravel.
Photos courtesy of Eklutna, Inc.
Ahtna, Incorporated currently has five subsidiaries enrolled in the 8(a) program, and the company has six active subsidiaries that have graduated from 8(a): Ahtna Construction & Primary Products Corporation graduated in 2009; Ahtna Development Corporation graduated in 2002; Ahtna Engineering Services LLC graduated in 2016; Ahtna Government Services Corporation (AGSC) graduated in 2008; Ahtna Support and Training Services LLC graduated in 2016; and Ahtna Technical Services, Inc. graduated in 2008.
Ahtna’s subsidiaries provide services in Alaska and the Lower 48. According to Ahtna, their first subsidiary formed was Ahtna Construction & Primary Products Corporation in 1974. It specializes in civil construction, pipeline maintenance, emergency preparedness, and oil spill response. Ahtna Development Corporation provides real property management and site-development opportunities—including commercial, retail, and tourism development—throughout the Ahtna region and California.
Ahtna’s two most recent 8(a) graduates provide very different services: Ahtna Support and Training Services is focused on simulations and training support, instruction, logistics, detention services, and warehouse operations and maintenance, while Ahtna Engineering Services provides tailored design-build, construction, demolition, renovation, environmental, oil and gas, and professional and technical products and services.
AGSC is heavily focused on providing prime and subcontract environmental and construction services for utility companies and federal contractors in California, according to Ahtna. In June 2015, AGSC provided construction services to the tune of approximately $3 million to Parsons Environment and Infrastructure Group, Inc. for a soil remediation and site improvements project for Pacific Gas & Electric in California.
According to Ahtna, “The scope of work included removing and disposing of impacted soil, backfilling with soil and base rock, constructing a concrete retaining wall, installing a stormwater control system and subsurface infiltration gallery, installing new site light fixtures with underground conduit, removing and replacing asphalt paving and chip seal, installing new high-security chain link fence and gates with gate operators, applying a slurry coat to existing asphalt paving, and installing signage and pavement markings. All work was completed to allow existing operations at the facility to proceed uninterrupted.”
Another recent AGSC project took place in September 2015, when the Ahtna subsidiary performed extensive site remediation services at a former US Navy facility site in California in the San Francisco Bay area. The site had been used historically for the disposal of waste, petroleum, aircraft parts, and other materials. Ahtna assisted with excavation and relocation of waste materials within the site, demolition and removal of site infrastructure, and construction of a soil and vegetative cover on site. “In addition to the remedial action activities, Ahtna was also responsible for establishing the site facilities for the project, including site trailer, utilities, storm water controls, parking, and laydown areas,” the company states.
According to Koniag Government Services Sector CEO Ed O’Hare, “Koniag Technology Solutions [KTS] and Koniag Services, Inc. [KSI] both predominantly sell information technology and professional services to the federal government.” These companies are successful graduates of the SBA 8(a) program with KTS graduating three years ago and KSI graduating five years ago. They comprise a significant portion of Koniag’s Government Services Sector business, which includes a mix of current and graduated 8(a) companies.
“KTS supports our federal customers all over the world,” O’Hare continues. “Our team provides environmental security support for over twenty worldwide secure US Government facilities—making sure the water and air they breathe isn’t harmful. The Federal Government has offices all over the country which need to be managed,” O’Hare says. KTS also provides services to the Department of Justice, the Social Security Administration, and the General Services Administration. “We’re working with agencies to manage their core financial systems and to manage their real property.” KTS’s largest client is Social Security, for which they provide ITSM (information technology service management). “We provide IT support for the employees of the Social Security Administration all over the country. So if you’re a social security employee and your email isn’t working, we get that call.”
KSI works in different industries, establishing itself in the health IT and cyber security fields, he says. KSI is also a CMMI 3 assessed organization and holds an ISO 9001 Quality Management certification. These certifications support KSI’s capabilities for full life cycle IT software development, geospatial services, and application infrastructure operations for the US Government—primarily in Maryland, where the Social Security Administration and the US Centers for Medicare & Medicaid Services are headquartered. KSI also provides cyber-security services for varies agencies in the Federal Government.
Both companies are headquartered in Virginia, which brings additional revenue back to the state of Alaska and Koniag Inc. shareholders. Koniag CEO Elizabeth Perry says, “We own 100 percent of our government sector companies, and those companies return earnings to our parent company, Koniag Inc. They are one of our largest sectors, and their contribution allows Koniag to provide benefits to our shareholders, including scholarships, internships, and job training.”
Koniag also pays dividends to its shareholders, and Perry says their ability to do so is directly related to the success of their subsidiaries. “The fact that we have the ability to use the 8(a) program as it was intended gives us a leg up to allow us to grow and then bring those profits back to our shareholders in Alaska and all over the country,” she says.
No matter the location of the subsidiary, they seek to provide opportunities for Koniag shareholders. “We want to be able to support our shareholders wherever they want to live. We’re trying to align our business goals with growing successful businesses in the West because this is where most of our shareholders are located,” Perry says. KSI and KTS employ approximately 150 people between them, and the KTS also has about 100 subcontractors.
O’Hare says the 8(a) program is a benefit for growing a company. “The program is working because businesses have an opportunity to grow in an industry,” he says. However, once a subsidiary approaches graduation, it’s vital to become more strategic when developing the business. “You have to decide what it is you’re going to do, because now you’re competing with [other companies]. That’s what we’ve done with these companies. We picked two domains for KSI to be experts in: one was healthcare IT and the other cybersecurity, and we’re doing very well.”
Perry says that the fields KSI and KTS have entered weren’t accidental, they were deliberate. Among Koniag’s goals is to have subsidiaries that provide expert professional services, which ideally would coincide with fields of interest to shareholders. “We’re finding, through the work of our education foundation, that our shareholders are interested in getting an education in fields such as science and technology,” Perry says.
The fields the companies work in also match Koniag’s goal to provide financial and other benefits to their shareholders while contributing to cultural preservation and perpetuation. “Because of that dual mission, the kind of services we provide to the government is important to us,” Perry says. “One of the reasons why it’s so critical to us that the 8(a) program exists, and remains, is that on a very high level it is an honor for us to be able to serve our country while also providing services to government agencies. The 8A program gives us the opportunity to be able to jump into what would otherwise be a highly competitive field.”
Tasha Anderson is an Associate Editor for Alaska Business Monthly.
This article first appeared in the February 2017 print edition of Alaska Business Monthly.