Defense contracts position Penobscot Nation for prosperity

Soon, as many as 200 citizens of the Penobscot Nation will be working in a 36,000-square-foot warehouse located in the heart of the community, fulfilling more than $100 million in contracts the tribe is close to securing with U.S. Department of Defense contractors. The work ranges from recycling wooden crates for the Army to building harnesses for electronic guidance systems for Patriot missiles.

“The tribe is in a much different place today with its economic future,” says Chief Kirk Francis.
The work at Olamon springs from the tribe’s decision to participate in an 8(a) program offered by the U.S. Small Business Administration when Francis first took office in 2006. Overall, Francis says the tribe will take its cut of more than $150 million in DOD confirmed contracts in Maine and Texas, with more in the pipeline.

The SBA program was created to help small companies owned by socially and economically disadvantaged groups develop business opportunities, including procuring federal contracts. Native Americans are among the groups the SBA has identified as eligible. At Indian Island, the program is being implemented in two ways: Penobscots are partnering with DOD contractors —who are required by federal law to give a percentage of their work to 8(a) businesses — to administer portions of the contracts by finding suitable subcontractors; and by pursuing some of the defense contract work themselves.

According to the Native American Contractors Association in Washington, D.C., more than 180 tribal-owned 8(a) companies across the nation have obtained billions of dollars in federal contracts. Besides the Penobscots, the Maliseets in Aroostook County and the Passamaquoddy Indian tribe in Washington County have established smaller-scale businesses within the SBA program.

But only a handful of tribes have experienced major success with it, according to Sarah Lufkin, the association’s executive director. As more tribes take advantage of this program, a fierce battle is raging on Capitol Hill over limiting how much DOD work is allocated to the nation’s tribes.

The success of the 8(a) program stands in stark contrast to many of the Penobscot Tribe’s past business failures, which include manufacturing audio cassettes in the mid-1980s and the unsuccessful attempt to site a $650 million casino in Sanford in 2003. Another venture, a mail-order prescription drug program with MaineCare earlier this decade, turned out to be a bust. an average life expectancy of 58, according to the Maine Office of Minority Health at the Maine Centers for Disease Control and Prevention.

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