Native enterprises provide an important source of revenue for Native communities, which is necessary to provide critical community services. While Native participation in some industries, such as gaming, has been in the spotlight, proceeds from another source have grown more quickly. Over the last 40 years, Alaska Native Corporations (ANCs), Native Hawaiian Organizations (NHOs), and federally recognized tribes (hereafter referred to simply as tribes) have increasingly done business with the world’s largest procurer of goods and services: the U.S. government.
In this article, the Center for Indian Country Development (CICD) analyzes a new dataset it developed of more than 50,000 government contracts awarded to ANCs, NHOs, and tribes, which CICD collectively refers to as Native entities. Four main findings emerge. First, all three types of Native entity are seeing growth in federal contracting revenue. Second, the Department of Defense accounts for the vast majority of contracting revenue to Native entities. Third, federal contracting has expanded and diversified tribal revenues, in part by outpacing revenue growth from gaming or natural resources. And fourth, the footprint of Native entities’ involvement in government contracting extends well beyond tribal lands.1
Federal contracting brings benefits
Through a process called federal procurement,2 contracts are awarded to supply the federal government with a diverse range of goods and services, from forest fire rehabilitation to modular-hospital construction. Federal contracting thus provides Native entities with significant opportunities for business development and diversification into sectors outside of gaming and natural resources. While enterprise diversification can come with costs, its necessity became clear during the early phases of the pandemic, when tribally owned casinos were shut down to mitigate COVID-19 transmission, and gaming-dependent tribes were left with little incoming revenue.
Federal contracting can also help satisfy the core mission of all Native entities, which is to promote economic, social, and cultural advancement in their respective communities. The community benefits from federal contracting come in a variety of forms. For example, Koniag, an Alaska Native Regional Corporation (a type of ANC), remits earnings from federal contracting to support a wide range of programs for its Alaska Native shareholders, such as scholarships, a special distribution for elders, and significant financial support for a culturally focused museum. Nakupuna, an NHO, has reinvested profits to restore an ancient Hawaiian fish pond and makes investments in STEM (science, technology, engineering, and math) educational programs. Ho-Chunk, Inc., the economic arm of the Winnebago Tribe, whose profits mainly come from government contracting, has directed needed investments into its community through an innovative housing model and poverty-reduction programs.
Diving into the data: Key findings
The dataset CICD developed documents every federal contract awarded to each type of Native entity from the early 1980s to the present. (For more on the dataset, see the appendix below.) These contracts were linked to 79 ANCs (all 13 Alaska Native Regional Corporations and 66 Alaska Native Village Corporations) that owned a total of 1,396 enterprises, 22 NHOs that owned a total of 117 enterprises, and 290 individual tribes that owned a total of 1,110 enterprises.3 CICD’s analysis, discussed in more detail below, shows that from 1981 through 2021, these Native entities collectively earned $202 billion in revenue (in 2021 dollars) from federal government contracts—$198 billion from prime contracts and $4 billion from subcontracts.4, 5 While large, these revenues are only 1.4 percent of the $13.8 trillion in total contracting revenue awarded over the same period to non-Native entities.
All Native entity types see growth in federal contracting, and defense is the biggest source
According to the 40 years of data CICD compiled, the Native entity share of overall government contracts has steadily increased since the late 1990s, from close to 0 percent of total contract dollars to 2.5 percent by the end of 2021, as shown in Figure 1. The one exception to the steady growth was an increase and then dip in 2012–2013, which was due to a single, large contract.6 Not shown in Figure 1: Roughly two-thirds of all contract revenue awarded to ANCs and tribes and nearly all contract revenue awarded to NHOs (just over nine-tenths) comes from the Department of Defense (DoD).
Figure 2 shows the growth in federal contracting across each type of Native entity. All three types of Native entity experienced positive, albeit unequal, revenue growth in federal contracting.7 Involvement in the federal contracting industry can be observed first among ANCs, then tribes, and finally NHOs. Involvement in federal contracting among ANCs and tribes began in earnest during the 1980s and then increased during the late 1990s after these Native entities were fully included in the U.S. Small Business Administration’s (SBA’s) 8(a) Business Development program, which is designed to assist small, disadvantaged businesses in securing contracts with the federal government. NHOs became more heavily involved in government contracting in the mid-2000s and late 2010s, which corresponds to changes that made the 8(a) program more inclusive for NHOs and, in 2019, updates to the National Defense Authorization Act (NDAA).8 The NDAA updates, which included significant military construction projects in Hawaii and raised the revenue threshold for certain defense contracts NHOs can obtain, may also help explain the larger share of revenue from the DoD among NHOs.
For tribes, growth in federal contracting expands and diversifies revenue, outpaces growth from gaming or natural resources
To illustrate the growing importance of federal contracting to one type of Native entity, tribes, Figure 3 compares the total revenue generated from government contracts to revenues from both Indian gaming and natural resources on Indian lands.9 It is important to note that there is variation in terms of how important these revenue sources are for any given tribe. Indian gaming remains the largest industry for tribes in terms of overall revenue, and federal contracting is the second-largest. However, contracting has grown more quickly: from 1988, the first year the dataset shows a contract awarded to a tribe (and the first year Indian gaming had a legal framework nationally), to 2021, the annualized growth in federal contracting was 41.6 percent, in contrast to the 16.8 percent annualized growth rate of gaming revenue over that same period. When compared to the growth in revenue from natural resources on Indian lands from 2003 (the first year of available natural resource data) to 2021, the annualized growth rate in federal contracting (10.9 percent) also outstrips the annualized growth rate in revenue from natural resources (5.8 percent).10, 11
These aggregate figures can obscure the wide variation in tribes’ mix of revenue sources. According to the dataset CICD developed, across 40 years, 50.5 percent of tribes have been involved in federal contracting. In 2021, 25.6 percent of tribes were active in federal contracting. Tribes with contracting revenue do tend to also generate gaming revenue: 64.6 percent of tribes that have been involved in federal contracting have a gaming enterprise.
An important source of revenue for tribes, federal contracting is the primary source of revenue for ANCs and NHOs. Due to complex legal restrictions, ANCs and NHOs do not have the same access to gaming as tribes, which likely redirects their activity toward federal contracting.
Native entities’ contracting work has national and global footprint
Native entities are performing work the federal government needs completed, and they are earning dollars not just for contracts associated with their respective Native communities. As seen in Figure 4, Native entities earn their federal contracting revenue from work performed in locations across the country. Virginia, Alaska, and Maryland had the most contracting activity, at $29.2 billion, $21.6 billion, and $15.6 billion, respectively, reflecting their important roles in defense contracting, but Native entities conducted some federal contracting work in every state. Furthermore, according to the dataset CICD developed, Native entities performed work in every U.S. territory and in over 160 countries. Roughly 95 percent of all federal contracting revenue earned by Native entities was for activities performed off tribal lands.12
Future research avenues
Analysis of the federal contracting industry provides the CICD team a better understanding of American Indian, Alaska Native, and Native Hawaiian economies. CICD’s results demonstrate that, due in part to the expansion of federal contracting among Native entities, Native economies are increasingly diversifying into a variety of business sectors and locations. The dataset CICD developed provides avenues to conduct additional research to improve understanding of the importance of government contracting for Native entities. For example, more research can be done to understand how to promote greater inclusion in federal contracting among Native entities. And more can be done to better understand the social and economic impacts of federal contracting on Native (and non-Native) communities. The Center for Indian Country Development and its partners hope to continue to shed more light on this important but overlooked industry.
Appendix: About the new dataset
The prime dollar amount of each federal contract awarded to each Native entity comes from Bloomberg Government (BGOV), a private corporation that aggregates and synthesizes data from a public repository called the Federal Procurement Data System–Next Generation (FPDS-NG). FPDS-NG contains all federal contracts (and each modification) of over $10,000. The BGOV database provides a user-friendly interface to document the value of each contract from 1976 to the present. Most important for CICD’s research purposes, the name of the parent vendor (i.e., the ultimate owner of the business that was awarded the contract) is also included.
CICD team members used numerous steps to identify whether a federal contract was issued to a company owned by a Native entity. First, they created a master list of potential contracts awarded to Native entities by identifying all contracts in BGOV’s Contracts Intelligence Tool that were obtained by vendors that marked Native-related “vendor socioeconomic indicators”; and all contracts obtained under Indian business programs, the SBA’s Historically Underutilized Business Zones Program, and the SBA’s 8(a) program for helping small, disadvantaged businesses secure federal contracts. Second, as a starting point for linking contracts to Native entities, CICD team members used an existing CICD dataset. Third, they matched unmatched companies to a Native entity by linking the Commercial and Government Entity (CAGE) code of the performing vendor to a Native entity. Additionally, in the course of reviewing the contracts, they observed the name of the performing vendor’s parent vendor and could then match that information to a Native entity.13 If the parent vendor’s Native entity ownership remained unclear, CICD team members checked the company’s website and did additional web searching to verify Native entity ownership. For every contract observed, they provide documentation on how the link to the Native entity was verified. This rigorous process of identification and verification of Native entities involved in federal contracting resulted in a dataset of 50,167 unique contracts obtained from 1981 (the first year a Native entity of any type can be observed receiving a contract) through 2021.
Where possible, CICD team members externally validated the data through a variety of sources, including the SBA14 and individual fact sheets where Native entities list their federal contracting revenue. They also met with a variety of Native entity enterprises and Native-led organizations that provided additional context. As an additional check that they had captured large, widely reported-on federal contracts awarded to Native entities, CICD team members reviewed a variety of news sources, among other methods.
For information on subcontracting revenue earned by Native entities, CICD team members obtained data from HigherGov, a private corporation that aggregates and synthesizes data from FPDS-NG, and data from the Federal Subaward Reporting System and other sources. CICD team members provided HigherGov a dataset of all the CAGE codes they verified as linked to Native entities, and HigherGov matched these CAGE codes to associated subcontracts. CICD team members included prime and subcontracting revenue in order to be able to calculate total revenue earned in federal contracting by Native entities and to create a more comprehensive dataset on federal contracting.
There are limitations to this dataset and analysis. In particular, the dataset could be missing some Native-entity-owned enterprises and their associated prime or subcontracts if CICD was unable to match those contracts with an identified Native entity. Thus, CICD is presenting lower-bound estimates for Native entity involvement in federal contracting. Also, there should be caution in interpreting trends in contracting prior to the implementation of the Federal Funding Accountability and Transparency Act of 2006, which resulted in better reporting of federal contracting data over time for both prime and subcontracts.
This article originally stated that 13.6 percent of tribes were active in federal contracting in 2021. That figure was subsequently corrected to 25.6 percent.
1 Tribal lands in this specific context refers to the U.S. Census Bureau’s American Indian, Alaska Native, and Native Hawaiian Areas: legal and statistical geographies that include Alaska Native Village Statistical Areas, American Indian Joint Use Areas, American Indian Reservation and Off-Reservation Trust Lands, Oklahoma Tribal Statistical Areas, State Designated Tribal Statistical Areas, Hawaiian Homelands, and Tribal Designated Statistical Areas.
2 For an overview of federal procurement, see Overview of the Federal Procurement Process and Resources from the Congressional Research Service.
3 CICD accounted for enterprises owned by multiple ANCs, NHOs, or tribes by listing each of these enterprises as its own, unique item in the dataset according to Native entity type (e.g., “Multiple ANCs,” “Multiple NHOs,” or “Multiple Tribes”).
4 Prime contractors work directly with the government but may subcontract portions of work to other vendors to complete contracts. (From the U.S. Small Business Administration’s “Prime and subcontracting” information page.) For Native entities that obtained subcontracts, 82.3 percent of the revenue came from non-Native-entity prime awardees.
5 Hereafter, this article focuses on prime contracts only.
6 This large contract was awarded to S&K Aerospace, which is owned and operated by the Confederated Salish and Kootenai Tribes of the Flathead Reservation.
7 The overall growth was not without volatility, as shown by the precipitous drop in federal contracting revenue for ANCs that may have resulted from disproportionate impacts that the Budget Control Act of 2011 had on contracting revenue for ANCs. CICD has reviewed annual reports from ANCs from this time that corroborate this.
8 National Defense Authorization Act for Fiscal Year 2020, 10 U.S.C. §3204.
9 For this natural resource revenue data, the U.S. Department of the Interior (DOI) defines Indian lands as “Lands owned by Native Americans, including tribal lands held in trust by the federal government for a tribe’s use, Indian allotments held in trust by the federal government for individual use, and lands held by Alaska Native corporations.” (From DOI’s Natural Resources Revenue Data Glossary.)
10 Gaming-revenue data are from the National Indian Gaming Commission’s Gross Gaming Revenue Reports. Data on natural resource revenue on Indian Lands are from DOI’s Natural Resources Revenue Data.
11 The Indian lands revenue data cannot be separated into a) only the revenue earned by tribal lands held in trust by the federal government for a tribe’s use, and b) the revenue from lands held in trust by individual Indian allottees and land held by Alaska Native Corporations. Given that the data include category “b,” the growth rate for natural resource revenue to tribes is likely overstated.
12 For the definition of tribal lands in this specific context, see endnote 1.
13 Why does CICD identify parent vendors? Companies must report their parent vendor after obtaining a contract, so paying attention to parent vendors allows CICD to track how Native entity ownership may change over time for some firms due to mergers, acquisitions, and divestitures.
14 In 2020, the SBA began releasing disaggregated ownership data of businesses involved in federal contracting. The data CICD compiled differ from the SBA data in some ways. For example, CICD includes revenue from contracts obtained directly by tribal governments, not just revenue from contracts obtained by businesses that are owned by tribal governments. Also, CICD further disaggregates Native ownership data and focuses exclusively on ANCs, NHOs, and tribes, whereas the SBA data have a category called “Native American Owned Small” that includes state-recognized tribes and individual American Indian-, Alaska Native-, and Native Hawaiian-owned businesses. CICD also collected data on state-recognized tribes and individual Native-owned businesses in the dataset, but found that Native-entity-owned enterprises are far more prevalent in federal contracting, both in terms of overall revenue and number of enterprises. This may partially be explained by the differing regulations that govern Native entities, and that these Native entities have connections to communities that benefit directly and indirectly from their involvement in federal contracting, which may further motivate their involvement in the industry. State-recognized tribes and individual Indian-owned businesses are not discussed in this article given that they are more difficult to verify.
Matthew Gregg is a senior economist in Community Development and Engagement, where he focuses on research for the Center for Indian Country Development. He has published work on historical development in Indian Country, Indian removal, land rights, and agricultural productivity.
Elijah Moreno is a senior research assistant in the Community Development and Engagement division, where he conducts research and analyses to support the Center for Indian Country Development. Before joining the Bank, Elijah was a research assistant at Education Northwest, where he focused on American Indian education projects.