Prosecutors said the conspirators in one of the largest federal contracting fraud schemes ever uncovered used a program created by the United States four decades ago to settle native land claims in Alaska. The company at the center of the indictment, EyakTek, was an Alaska Native Corporation with offices in Dulles and was the prime contractor for a $1 billion information technology contract. The contract was a vehicle that allowed the U.S. Army Corps of Engineers to purchase products and services without first obtaining three separate bids and comparing the costs with those of similar contracts.
What is an Alaska Native Corporation?
In 1971, Congress passed the Alaska Native Claims Settlement Act to stimulate Alaska’s economy and settle land disputes between the United States and the Alaskan natives. The act created 13 regional Alaska Native Corporations and about 200 local village ANCs.
In 1986, Congress authorized the ANCs to be included in the Small Business Administration Section 8(a), which set aside federal contracting work for disadvantaged minority disadvantaged owners.
The new law granted ANCs unique procurement advantages beyond those available to other economically and demographically disadvantaged owners, according to prosecutors. The ANCs could receive sole-source contracts without a limit to dollar size while other firms could not receive sole-source contracts for more than $3 million for services and $5 million for manufacturing.
