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Economic Impact of 8(a) and Native American Contractors

August 14, 2012 - 2:25pm


Editor's Note: This blog post was guest written by Jennine Elias, Director of External Affairs for the Native American Contractors Association (

What is Native 8(a) and how do Tribes, Alaska Native Corporation, and Native Hawaiian Organizations fit into the Small Business Administration’s (SBA) 8(a) Business Development Program?

According to the SBA, this program, which was named for Section 8(a) of the Small Business Act, was created to help small and disadvantaged businesses compete in the marketplace. It also helps these companies gain access to federal and private procurement markets.

For example, Native entities work with many federal agencies, including the Department of Energy.  The Department of Energy works with small businesses and provides guidance on working with tribal communities. The agency also has a database where bid opportunities are stored.

In a recent interview with Federal News Radio, NACA’s Executive Director, Kevin Allis describes why Native 8(a) exists. Native 8(a) represents entire communities of people. The SBA’s 8(a) program provides tribal communities with the ability to grow into successful, sustainable entities that can compete in the marketplace.

Net income from Native 8(a) contracting helps underwrite indigenous solutions to long-standing problems that federal assistance has proven unable to solve. Ho-Chunk, Inc., the parent company of several 8(a) contractors, pays the Winnebago Tribe of Nebraska tribal taxes and annual profit dividends. Those funds supported eighty percent of a $1 million tribal housing stimulus program that encourages homeownership for Winnebago citizens. Prior to the initiative, only citizens falling below federal poverty thresholds could qualify for on-reservation housing assistance. To make matters worse, the low- and very-low-income housing stock was insufficient to meet demand, growing very slowly, and dominated by rental units. With the new down payment assistance program, Winnebago citizens can live where they work, support the reservation economy with their household spending, participate in community life, and build equity in their homes. 

Without it, the Tribe watched educated and working citizens leave for jobs and housing elsewhere.  The program is also stimulating home construction.  “Normally, an expenditure of $1 million would only provide six or seven rental units,” CEO Lance Morgan said. With the new program, twenty homeowners are created. “This program is helping real people in real ways,” says Morgan.  For the first time, reservation residents can look forward to passing title to their homes to their heirs.  In the past, every generation started from a negligible capital base.

The program has proved its worth in Indian Country. It is a win-win for American taxpayers and tribal communities.

For example:

  •  In 2011, Native 8(a) contractors sold $6.8 billion worth of goods and services to the federal government;
  • 2011 estimated economy wide impact from Native 8(a) is 109,000 jobs;
  • $6 billion in wages and benefits;
  • $650 million in state and local taxes; and
  • a total GDP contribution of $9.6 billion.

What does this mean for tribal communities? Well, according to a recent NACA survey, our membership recorded employment of 56,067 people and a distribution of $111.5 million. That included owner cash dividends of $6.9 million, $15.3 million in scholarships, $24.0 million for direct community expenditures, and $6.4 million in donations to non-Native groups.

Check out a full copy of NACA’s economic impact study here.