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EXCLUSIVE REPORT: Native businesses get share of Iraq restoration contracts

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WASHINGTON - A Defense Department effort to involve American Indian companies in the rebuilding of Iraq will bring jobs and contracts to around 10 high-tech Indian-owned companies, Indian Country Today has learned.

Although the public announcements await confirmation about the scope of the work and safety conditions in the country, a Defense Department official has confirmed that it has signed a $5 million contract with a tribal enterprise belonging to the Confederated Salish and Kootenai Tribes that will spread work to a half-dozen other Indian-owned subcontractors. The official said that negotiations were in the final stages with the Chugach Alaska Corporation, a Native entity organized under the 1971 Alaska Native Claims Settlement Act.

Both tribal companies already hold substantial high-tech contracts with the Defense Department.

The official, Kathy Dobeck of the Defense Contracting Command, added that a smaller prime contract would go to Native American Industrial Distributors.

Native contractors are calling the assignments a major breakthrough for Indian business, although they are reluctant to speak publicly until the deals are signed, sealed and delivered. "It's another feather in our cap, so to speak," said one. But he declined a formal interview "until the ink is on the paper, and it's dry."

The Defense initiative, indeed, has caused something of a Washington flap over one tribe that did not make the final cut. Chickasaw Nation Industries (CNI), the branch of Chickasaw Enterprises registered under the Small Business Administration's 8(a) program for minority business, had high hopes for an information technology contract in support of Iraqi government ministries until the middle of July.

Neal McCaleb, former head of the BIA and now at CNI said he learned definitely on July 29 that the contract "had been pulled." His reaction, he said, "was disappointment, clearly."

McCaleb debunked a suggestion that the loss of the contract was retaliation for a quote he gave to a July 30 Wall Street Journal article critical of White House political involvement in a Department of Interior decision during his tenure. "There is absolutely not a connection," he told Indian Country Today.

He said he had learned the contract would not go through 10 days earlier and had received the final confirmation the day before the article appeared.

In the second of two contacts with Indian Country Today, McCaleb also seemed reconciled to the loss. "If that's the decision," he said, "we will live with it, and we will look for better days."

The initial reaction of the well-connected Chickasaw Nation was less philosophical, however, said Defense official Dobeck. "If you'll excuse my language," she told Indian Country Today, "the Chickasaws went apes--t."

Clearly aggravated, she complained that the Chickasaws had called their congressman and used their impressive connections in the Bush Administration. (Newly elected U.S. Rep. Tom Cole, R-Okla., is a Chickasaw Nation member and veteran Republican operative.)

Dobeck said that when she took the initiative of recruiting Native contractors for Iraq, she explained clearly that not all of the deals could go through. "I told them right up front," she said, "'Look guys, we are getting requisitions all the time.'" She urged them to file the preliminary paperwork in advance, including letters from the SBA stating their 8(a) eligibility, so that decisions could move forward in days.

Dobeck said she held a "pre-proposal conference" on April 21 with more than 20 representatives from Native businesses. Interest was so strong, she said, that she asked the companies to send no more than two people.

The meeting came just days after papers reported that the construction giant Bechtel Group of San Francisco had won the first major contract for Iraq reconstruction, awarded by the U.S. Agency for International Development. The New York Times said the award "had set off a heated contest among some of the nation's most politically connected construction concerns."

"I didn't want the big boys to get all the work," Dobeck said.

Her conference built on an already active Defense Department Indian Initiative to direct work to Native-owned firms. Her first signed prime contractor, the Salish and Kootenai's S & K Technologies, already holds two Air Force contracts worth a total of nearly one billion dollars over their duration.

According to details provided through S&K Technologies head Greg DuMontier, a tribal member, the $5 million Iraq contract will fund some 39 slots for Information Technology support, reconstruction and transportation specialists, humanitarian workers and other functions. As prime contractor, S & K will fill the positions through about half a dozen Indian-owned subcontractors.

According to S & K, four have responded so far, Amerind, Native American Industrial Distributors, Emerge Technologies and Mandaree of North Dakota.

"We hope to get people out there by the 15th of August," said an S&K executive. He said personnel would "start out in Baghdad and be dispatched from there."

The contract, he said, called on them to establish liaison with "the Coalition Provisional Authority," the current U.S. military government. He said S & K would work in the field with local Iraqi governments and eventually hoped to work with "whatever the Iraqi people put in place as their government."

"It's a huge project," he said, bigger than anything since the end of World War II.

S & K Technologies, based in St. Ignatius, Mont., and owned by the Confederated Salish and Kootenai of the Flathead Reservation (which also includes the Pend d'Oreille Indians) is a 1999 information technology spin-off from S&K Electronics. It employs more than 175 non-tribal workers at four regional sites around the country. A major operation at the Warner Robins Air Force Base in Georgia, supervises repair and return of F-15 fighter jets for U.S. allies, including Saudi Arabia. Another contract treats corrosion on aircraft. It also has sites in Dayton, Ohio, Bellingham, Wash., and Houston, Texas.

A favorable Wall Street Journal profile said that S & K Technologies had managed to cut costs in the "repair and return" operation by 23 percent over the previous contractor, a large aircraft firm. The article attributed much of the company's success to the absence of political interference from the tribal council.

Although according to the Defense Department, Chugach Alaska Corporation (CAC) is in line for a contract, its spokeswoman Beth Welty said officers would withhold comment until the deal was signed. According to its Web site, however, CAC was formed in 1972 as an ANCSA Corporation and in 2002, ranked sixth in Alaska Business Monthly's Magazine of Top 49ers - a ranking of the top Alaskan-owned and operated businesses. Based in Anchorage, CAC consists of six subsidiaries and several joint ventures with more than 5,000 employees worldwide and revenues in 2002 of over $354 million. It provides base operating services, educational services, construction services, environmental services, information technology, telecommunications, and full-service employment services.