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- By Chez Oxendine
- Native Contracting
Tribal enterprises have seen revenues from consolidated federal contracts surge more than thirty-fold over the past 13 years, but they’re still only getting a small piece of the pie.
While tribal entities' revenues from these contracts jumped from $22.7 million in 2010 to $736.6 million in 2023, Native businesses captured just 2.6% of all prime consolidated contracts during that period, according to a new report by the Center for Indian Country Development at the Federal Reserve Bank of Minneapolis.
Consolidation has become a popular method of bundling federal contracts. The report notes that consolidated contracts have increased from 10,483 in 2010 to more than 200,000 in 2023. The analysis examines how federal contract consolidation is affecting Native enterprises.
The report, written by CICD Senior Policy Analyst Jacqui Baldwin-LeClair and Research Assistant Ava LaPlante, finds that while overall revenues from consolidated contracts for these enterprises have grown substantially over the past decade, their overall share of federal contracting remains modest.
“While Native entity enterprises may see strong potential revenue streams, they may still face challenges similar to those that small businesses face,” the authors write. “In particular, contract consolidation could be a barrier for Native entities that own newer, fewer, or smaller businesses that lack the resources to compete for larger, more complex opportunities.”
Overall, Native entity enterprises received just 1 percent of more than 51 million federal contracts awarded from 2010 through 2023.
Many tribally-owned companies rely on government set-aside programs for small, minority-owned, and disadvantaged businesses. These programs, such as the Small Business Administration’s 8(a) program, can become difficult to navigate when contracts become larger and more complex. Because consolidated contracts require greater capacity and expertise, smaller Native-owned companies face significant hurdles competing in what has otherwise become a lucrative sector.
Even as revenues for tribal federal contracting entities grow, worries remain on the horizon: President Donald Trump signed an executive order in March requiring federal agencies to shift procurement to the General Services Administration. The order, "Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement," threatens specialized set-aside programs including the Buy Indian Act provisions and other preferences for Native businesses, as these programs aren't typically used in GSA purchasing vehicles, per Tribal Business News reporting.
Centralized procurement threatens to reduce flexibility for programs like the 8(a) initiative or the Buy Indian Act.
Federal contracting has recently become one of the biggest revenue drivers in Indian Country, accounting for $23.3 billion in fiscal 2023 revenues. As tribes hunt for a wider array of economic opportunities beyond gaming, more launch or acquire federal contracting businesses to access set-aside programs.
While the overall number of small businesses competing for consolidated contracts has fallen in recent years, the number of participating Native enterprises has risen from 1,922 in 2010 to 2,489 such businesses in 2023, according to the CICD report. Their primary customers have been the Department of Defense — accounting for nearly 87% of federal revenues covered in the report — and the National Aeronautics and Space Administration.
Even with a small piece of the pie and consolidation challenges ahead, federal contracting represents a large opportunity for development, per the report.
“Bolstering and growing Native economies depends on continued innovation and the pursuit of emerging opportunities,” the authors write. “While federal contracting is not the only solution, it offers a valuable opportunity for Native entity enterprises to diversify revenue streams into various sectors, which advances the economic resilience of tribal economies.”
