Benefits of Native / Tribal Partnership – First Nations Capital Partners I & II

WHY CREATE A TRIBAL VENTURE PARTNERSHIP

Benefit from each other’s experience in various industries and geographic areas
Share in the risk of a venture as well as the financial rewards of a successful project.
Strengthen the existing Tribal relationships as well as opening opportunities for other to share the knowledge and experience of a successful venture partnership.
Extend opportunities to other Tribal Nations and combine Tribal resources.
Enter into partnership with well-respected national financial institution
Part of Asset Allocation and Diversification Strategy

ADVANTAGES OF A NATIVE AMERICAN FIRM

There are a number of specific advantages available to Native American-owned enterprises. A partial listing includes:

1. Department of Defense Indian Subcontracting Program – The Native American Incentive Act (FAR 52.226-1) that implements 25 USC 1544, provides an incentive to Department of Defense prime contractors who use Indian organizations and Indian-owned economic enterprises as subcontractors. If a contracting officer includes in an RFP the clause at 52.226-1 that is titled “Utilization of Indian Organizations and Indian-Owned Economic Enterprises,” the program provides for an incentive payment equal to 5% of the amount subcontracted to the Indian organization or Indian-owned economic enterprise.

2. SBA 8(a) Program – Companies with at least 50% of the equity owned by an Indian or Alaskan Native Tribe may also be eligible for certification by the Small Business Administration as an 8(a), “American Indian–Tribally Owned Concern, Small Disadvantaged Business” (SDB). This classification allows the federal government to award contracts to qualified firms on a “sole-source” basis beyond the standard $3 million 8(a) limitation. The affiliation rules that are normally applicable to size standard determinations by the SBA do not apply to tribal 8(a) enterprises. Tribes may form and operate multiple 8(a) companies without regard to affiliation if the NAIC codes are unique to each. Tribally owned enterprises do not have to be in business for the two-year minimum period usually required by SBA regulation if they can provide an acceptable business plan indicating the firm can meet the various performance requirements established by the SBA for 8(a) companies (13 CFR 124.109(c)(6)(ii)).

3. Sole Source – Through sole source contracts, businesses are given an opportunity to enter the government-contracting arena and gain the experience necessary to compete in the full and open market. Competitive bidding on limited opportunities allows 8(a) contractors to gain valuable experience in various market arenas. Under 13 CFR 124.506(b), the Small Business Administration may award sole-source federal contracts to tribally-owned, certified 8(a) companies without regard to contract value. This CFR provision exempts contracts to 8(a) companies owned by Indian or Alaska Native tribes from the competitive dollar-limit thresholds of other 8(a) contracts. Also, protests by other contractors are not allowed with respect to a tribally-owned company in connection with such sole-source contracts. IDIQ contracting with tribally-owned entities has proven especially lucrative for some tribally-owned organizations.

4. Contracting Incentives – Section 10 USC 2323(a) of the United States Code allows a specified agency to award a contract to a joint venture firm that is at least 50% native-owned. Consequently, the agency awarding the contract allows small business contracting goals to be counted toward the native-owned portion of the joint venture.

5. Direct Conversion-Section 8014 of the Defense Appropriation Act (Fiscal Year 2002) details how Dept. of Defense agencies may directly convert full time equivalent (FTE) positions to tribally-owned concerns rather than conducting A-76 cost comparison studies. This applies when the Tribally Owned Concern has at least 51% ownership of a joint venture or is the prime contractor performing at least 51% of the work. There is no limit to the dollar value of the contract. The United States government may directly outsource non-inherently governmental services or functions to a tribal 8(a) enterprise under OMB circular A76 without study, cost comparison or competitive bidding.

6. HubZone – Any tribally-owned enterprise or Native American-owned enterprise located within “Indian country” is automatically deemed eligible for HUBZone certification. On-reservation firms are certified to participate in this program, through which the SBA provides federal contracting opportunities to firms located in “historically underutilized business (HUB) zones,” encouraging economic and employment growth on reservations. HubZone contacts can be awarded on a sole source or competitive basis.

7. Corporate Programs – Many large corporations require that procurement officers and suppliers utilize minority-owned vendors. Since 1993 for example, General Motors and Ford have required not only their own companies, but their suppliers to set a goal of purchasing at least five percent of their goods and services from minority-owned vendors.

8. Tribes, Tribal Enterprises and Native Owned or Controlled Firms and Businesses – More and more we are seeing and hearing that those who fall into this category wish to grant preference to others of like kind and mind. In addition, buying consortiums such as that recently entered into by and between a number of prominent tribes including the Seminoles of Fla., owners of the Hard Rock Hotel and Restaurant chain, the Mashantucket Pequots, owners of Foxwoods Casino Resort and the Morongo Band of Mission Indians are being formed for the purpose of identifying and doing business with qualified Indian vendors.