Native federal contractors contribute to local economies nationwide

Businesses owned by tribes, Alaska Native Corporations (ANCs), and Native Hawaiian Organizations (NHOs) play a unique role in Native communities, providing revenue to fund public services and serving as an alternative income stream in the face of limited tax revenues. By creating jobs, hiring small businesses, and drawing visitors to nearby attractions, enterprises owned by Native entities also contribute to local and regional economies across the United States. Increasingly, Native-entity enterprises contract with the federal government to provide goods and services.

Over the past four decades, federal contracting has grown faster as a revenue source for Native entities than revenue from either gaming or natural resources. In 2025, the federal government awarded Native-entity enterprises $26.6 billion for their work on prime contracts and subcontracts.¹ Native-entity enterprises provide a wide range of goods and services to the federal government, from building military defense instruments to developing payroll platforms to constructing modular hospitals.

To facilitate research on this industry that is of growing importance to Indian Country, over the past several years the Center for Indian Country Development (CICD) has conducted a series of analyses based on available datasets. Early analyses drew on point-in-time data acquired from a vendor. That dataset lists more than 50,000 government contracts awarded to Native entities, including federally recognized tribes, ANCs, and NHOs. More recent analyses leverage continually updated public data available from USAspending, which identify businesses that are tribally owned, ANC-owned, and NHO-owned. While individual data points may differ across data sources, the overarching findings from these analyses have increased our collective understanding of federal contracting in Indian Country.

CICD’s mission is to advance the economic self-determination and prosperity of Native nations and Indigenous communities through actionable data and research that inform public policy discussions. To that end, we synthesize key themes from this body of research for policymakers seeking to understand federal contracting’s role in Native economies.

Native entities’ involvement in federal contracting has grown substantially since the 1980s

In recent decades, Native entities have increasingly done business with the world’s largest procurer of goods and services: the U.S. government. Federal contracts generated about $200 billion in revenue for Native entities in the last decade alone.² Native entities’ share of the overall value of federal contracts steadily increased from close to 0 percent of total contract dollars in the late 1990s to around 2.5 percent by the end of 2021. Based on CICD analysis, about 150 tribes were involved with federal contracting as of 2021.

CICD compared revenue from three important industries in Native economies: federal contracting, gaming, and natural resources. As of 2021, federal contracting was the largest of these revenue sources for ANCs and NHOs and the second-largest for tribes, following gaming. And while gaming brings in more revenue for tribes, tribes’ revenue from federal contracting has grown more quickly. From 1988 to 2021, tribes’ federal contracting revenue grew by an average 41.6 percent per year, compared to 16.8 percent for gaming revenue.

The U.S. Department of Defense (DOD) accounts for the vast majority of federal contracting revenue to Native entities. Over the past 40 years, roughly two-thirds of all contract revenue awarded to ANCs and tribes and nearly all contract revenue awarded to NHOs (just over nine-tenths) came from the DOD.

Many Native entities participate in federal contracting through a particular federal program

This rise in Native federal contracting followed federal legislative changes in 1986 and 1988 that made Native-entity-owned enterprises eligible for the U.S. Small Business Administration’s 8(a) Business Development program, which is designed to help small disadvantaged businesses secure contracts with the federal government. Businesses can maintain 8(a) certification for up to nine years. Some program participants leverage the experience, knowledge, and skills gained in the program to transition into the broader federal contracting environment.

Read more on CICD’s federal contracting research

In changing economic and policy landscapes, research on Native federal contracting provides valuable insights on the role of federal contracting in Indian Country and beyond. This research requires consistent, high-quality data over time. CICD is exploring future directions for our federal contracting research by further leveraging USAspending, a publicly accessible resource that has seen significant enhancements in recent years.

For more insights from CICD’s analyses of Native federal contracting, see the following articles:

• Tribes harness industry experience to enter new markets (April 2026)
• Federal contract consolidation: Help or hindrance for Native-entity enterprises? (April 2025)
• The economic ripple effects of tribal gaming and federal contracting (October 2024)
• Understanding Native-entity enterprises’ subcontracting relationships (July 2024)
• Native federal contracting serves communities (May 2024)
• Native entities and the federal contracting landscape (June 2023)
• Federal contracting’s expanding revenue role in Indian Country (December 2022)

Set-aside contracts play an important role in Native federal contracting. The federal government sets aside—that is, allocates—5 percent of all prime-contracting and subcontracting dollars for small disadvantaged businesses each year. For Native-entity federal contractors, the primary set-aside program has been the 8(a) program. This program awards both competitive set-aside contracts, in which multiple businesses compete for a contract, and noncompetitive sole-source contracts, in which only one business is qualified to fulfill the contract. The federal government also sets aside lower-value contracts of $250,000 or less for small businesses, including businesses in the 8(a) program.

Among set-aside contracts, 8(a) sole-source contracting has accounted for the largest share of Native-entity enterprises’ federal contracting revenue in recent years, although that share has been declining. From 2001 through 2021, 8(a) sole-source contracting revenue outpaced all other set-aside contracting revenue in every year except 2012. However, the share of Native set-aside federal contracting revenue accounted for by 8(a) sole-source contracting declined from over 50 percent on average from 2001 to 2010 to approximately 35 percent on average from 2011 to 2021, as the shares accounted for by both competitive set-aside contracts and small business set-asides generally grew. Two other set-aside programs, the Buy Indian Act and HUBZone programs, accounted for far less of the overall Native entity set-aside revenue portfolio during this time period.

Native entities invest contracting revenue in their communities

Enterprises owned by Native entities operate under a different business model than most conventional corporations. Rather than primarily focusing on maximizing profits for owners or private shareholders, enterprises owned by tribes, ANCs, and NHOs share a commitment to benefiting their communities. Native entities dedicate profits to community services such as cultural programming, educational opportunities, workforce development, housing projects, elder benefit payments, and other types of community infrastructure.

For example, Koniag—an ANC with federal contracting operations—serves as an economic development tool for the Alutiiq people of the Kodiak Archipelago. In 2022, Koniag distributed nearly $28 million in benefits to the Kodiak community. Looking to the future, Koniag established a trust that provides ongoing support for community well-being and cultural heritage programs. In another example, Minnesota-based Mille Lacs Corporate Ventures (MLCV)—a tribally owned enterprise with federal contracting operations—contributes profits to community-focused activities such as workforce and housing projects, renewable energy, broadband infrastructure, and community entrepreneurism. MLCV’s activities include a tribal business incubator program that connects aspiring small business owners with training and technical assistance in accounting, marketing, and legal support.

Native federal contracting contributes to economies in Indian Country and beyond

Native entities perform work for the federal government in all 50 states, every U.S. territory, and more than 160 countries. Among U.S. states, Virginia, Alaska, and Maryland showed the most federal contracting activity from 1981 through 2021, reflecting their local industries’ roles in defense contracting. From 1981 through 2021, approximately 95 percent of all federal contracting revenue earned by Native entities was for activities performed off tribal lands.

Through their business activities in communities inside and outside of Indian Country, Native federal contractors contribute to local and regional economies across the country. Federal contracting businesses generate income, create jobs, subcontract with other businesses, and innovate products and services.

CICD has explored how tribes that are active in federal contracting and gaming—two common tribal economic development strategies—compare in their business holdings to tribes that are not active in those industries. Tribes with federal contracting and gaming enterprises tend to own more businesses—and are more diversified in their other business holdings—than those without federal contracting and gaming. These findings may reflect tribes’ ability to invest their federal contracting and gaming revenues into other businesses—businesses that, in turn, contribute to the economy.

Other CICD research comparing a cohort of Native-entity and non-Native businesses found that Native-entity businesses that receive at least one federal contract survive longer and expand their workforces more rapidly.³

Native federal contracting dollars also flow within Indian Country and beyond through subcontracting relationships. Federal contracting businesses owned by tribes, ANCs, and NHOs regularly subcontract with both Native-owned and non-Native-owned small businesses. In 2022, an estimated 7.1 percent of the total obligated amount of prime contracts performed by Native entities was spent on small business subcontracting, amounting to approximately $1.2 billion that year.

Often, Native federal contractors hire small business subcontractors that are local to the place where the contracted work is performed, and many of these subcontracted businesses are not Native-owned. From 2015 to 2023, 92.9 percent of small business subcontractors engaged by Native-entity enterprises were not registered with the U.S. Small Business Administration as Native-individual-owned or Native-entity enterprises themselves. More than half (56.3 percent) of all Native-entity enterprise prime contracts with at least one small business subcontractor worked with a subcontractor located in the same state where the work was performed.

With federal contracting’s growth come challenges

Businesses owned by tribes, ANCs, and NHOs have acquired significant expertise in providing goods and services to the U.S. government, supplying federal agencies with everything from military hardware to payroll systems. Substantial growth in Native federal contracting revenue since the 1980s shows the growing importance of this business sector to Native-entity enterprises. This growth has helped tribes, ANCs, and NHOs fund critical public services and make investments in their communities. Research also documents the economic footprint and contributions of Native federal contracting in communities across the nation.

While federal contracting has grown in importance to Native communities, it is not without its challenges. For example, a trend of increasing contract consolidation—in which multiple federal contracts are combined into one large prime contract—could affect the number of contracts Native small business contractors are able to win. How tribes and policymakers navigate these and other changes in the coming years will determine whether federal contracting continues to elevate business development in Native communities.

Endnotes

1 Estimate reflects prime-contract and subcontract obligations to ANC-, NHO-, and tribally owned firms in 2025 (data retrieved August 4, 2026, from USAspending).

2 Estimate reflects prime-contract and subcontract obligations to ANC-, NHO-, and tribally owned firms from 2016 through 2025 (data retrieved May 29, 2026, from USAspending).

3 This analysis was based on one cohort of Native-entity-owned businesses and non-Native-owned businesses that were established in 2008–2010 and received at least one federal contract in 2008–2022. The analysis will be described in a forthcoming article from CICD.