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Hawaiian Companies Enjoy Federal Contract Preferences

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Federal contract preferences are adding muscle to Native Hawaiian-owned businesses’ economic development, according to the Hawaii Reporter.

Authorized in 2003 by Sen. Daniel Inouye, D-Hawaii, a longtime friend of Alaska’s late Sen. Ted Stevens, Native Hawaiian organizations (NHOs) gained access to the same contracting preferences awarded to Alaska Native Corporations (ANCs), who have obtained nearly $30 billion in non-bid or limited competition government contracts since 2000.

Preferential treatment under the U.S. Small Business Administration’s 8(a) program has secured NHOs about $500 million in non-bid or reduced competition government contracts since 2005, according to federal purchasing records. The Super 8(a) program allows non-profit NHOs to own for-profit subsidiaries as long as the money is forwarded to the parent company.

“Native Hawaiian Organizations, like their Alaskan counterparts, are vital economic engines and do much to improve the financial prospects of indigenous people,” Inouye told Hawaii Reporter.

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But some NHO executives participating in the 8(a) program fear rising controversy over alleged contract abuse by ANCs and reform legislation authored by U.S. Sen. Claire McCaskill, D-Mo., could jeopardize their unique status.

“We’re concerned about all the criticisms and threats, but the biggest concern is what can do?” Christopher M. Dawson, co-director of Native Hawaiian Corp., said to the Hawaii Reporter. “This program may go away. It’s kind of teetering on which way it’s going to go. It’s pretty scary.”

Robin Danner, president of Native Hawaiian company Nuvuk Construction, LLC, co-owned by an Alaska Native Corporation, has received $11.9 million in federal contracts since 2005, according to federal records. She charges McCaskill’s bill “is about taking down the success (of) a group of American companies that aren’t supposed to be successful, better not be successful, Native Americans in particular,” said Danner, also head of the Native Hawaiian Economic Alliance, Inc., to Hawaii Reporter.

Like many Hawaiian companies putting money into politicians protecting their unique contracting status, Danner and her relatives have donated $6,000 to Inouye, Sen. Daniel Akaka and Congresswoman-elect Colleen Hanabusa since 2006.