BY HAWAII REPORTER

SBA Revising 8(a) Rules, in Part to Reduce Fraud

The U.S. Small Business Administration is moving ahead with plans to revise regulations governing sometimes controversial contracts given the Alaska Native Corporations, Native Hawaiian Organizations and tribal entities.

The SBA on Friday published a package of final rules, saying the adjustments to its regulation 8(a) will better ensure that the benefits flow to the intended recipients and help prevent waste, fraud and abuse.

Alaska Native Corporations have come under media and Congressional scrutiny, including a series of critical articles published by the Washington Post last year. They said the exemptions allowed the corporations to obtain $29 billion in federal contracts over the past decade but that native shareholders had gotten relatively little of the contracting windfall despite the program being set up to improve lives of struggling indigenous people.

More recently the Hawaii Reporter published a piece noting a handful of Native Hawaiian-owned companies used federal contracting preferences authored by Inouye to land some $500 million in non-bid or reduced competition government work since 2005.

Missouri U.S. Sen. Claire McCaskill has been critical of the Alaska Native Corp. contracts and last month submitted S226, a bill that would eliminate some of the special preferences and rules for the Alaska groups. Native Hawaiian contractors are concerned that legislative changes could endanger the benefits now enjoyed by Native-Hawaiian owned firms.

The SBA said the revisions are the first comprehensive overhaul of the 8(a) program in more than 10 years.

The SBA said the rules cover a variety of areas of the program, ranging from clarifications on determining economic disadvantage to requirements on Joint Ventures and the Mentor-Protégé program. Some of the components of the 8(a) program that the revised regulations will affect include:

  • Tribally-Owned Firms – requiring firms owned by tribes, Alaska Native Corporations, Native Hawaiian Organizations and Community Development Corporations to report benefits flowing back to their respective communities;
  • Joint Ventures – requiring that the 8(a) firm must perform 40 percent of the work of each 8(a) joint venture contract that is awarded, including those awarded under a Mentor/Protégé agreement, to ensure that these companies are able to build capacity;
  • Economic Disadvantage – providing more clarification on factors that determine economic disadvantage as it relates to total assets, gross income, retirement accounts and a spouse of an 8(a) company owner when determining the owner’s ability to access capital and credit;
  • Mentor-Protégé Program – adding consequences for a mentor who does not provide assistance to their protégé, ranging from stop-work orders to debarment
  • Ownership and Control Requirements – providing flexibility on whether to admit 8(a) program companies owned by individuals with immediate family members who are owners of current and former 8(a) participants;
  • Excessive Withdrawals – amending regulations on what amount is considered excessive as a basis for termination or early graduation from the 8(a) program; and
  • Business Size for Primary Industry – requiring that a firm’s size status remain small for its primary industry code during its participation in the 8(a) program.

Hawaii U.S. Sen. Daniel Inouye and Alaska U.S. Sen. Mark Begich also last week asked for a hearing before the Senate Committee on Indian Affairs so that the contract issue could be explored more fully.

The two Senators said a hearing would give shareholders and other stakeholders an opportunity to demonstrate the importance and legitimacy of the program to Native communities in fulfilling self-determination and self-sufficiency.

Choose Life License Plate May Die

The “Choose Life” license plates may be canceled by the state of Hawaii if more of them aren’t sold, according to Hawaii Right to Life’s website.

The group said pro-life advocates have until the end of February to get 50 more of the plates on cars. The license plates feature what looks to be a yellow Post-It note with the smiling faces of two children and the words “Choose Life” on them.

Reportedly only 100 of the special tags are on cars currently and the state will cancel the plates if more aren’t issued. A special tag supported by Hawaii Planned Parenthood that said “Respect Choice” was cancelled because of a lack of interest, according to Aloha Pregnancy Care & Counseling Centers.

Hawaii Right to Life said, Steve Holck, Aloha Pregnancy Care president emeritus and founder, has offered to underwrite the cost of 50 tags in February. The tags cost $30.50 initially and have an annual fee.

Grand Wailea

Grand Wailea May be Sold to Singapore Sovereign Fund

The Grand Wailea Resort on Maui and four Mainland resorts owned by Paulson & Co. and other investors may be sold to the Government of Singapore Investment Corp., Bloomberg News reported.

The fund has offered $1.5 billion for the five resorts, one of its lawyers, Michael Sage, said in an interview with Bloomberg after unveiling the offer at a bankruptcy court hearing in New York.

The resorts, including the Grand Wailea Resort Hotel & Spa in Maui, Hawaii, filed for bankruptcy Feb. 1 after Paulson and other investors took ownership of them through a foreclosure, according to a court filing, Bloomberg said.

Roseanne Barr, Lifetime to Take Look at Big Island Life in New Series

Roseanne Barr’s return to television will have a distinctly Hawaii feel to it as the series takes a look at Barr’s new life managing a 40-acre macadamia and live stock farm on the Big Island.

Lifetime Television said its 16 half-hour episodes of the reality series that will make their debut on the cable network this year.

Barr said, “I’m coming back down to earth, and keeping it real.  They’ve said ‘Roseanne’s nuts’ for years, and now I’m going to make that a reality – I’m all about nuts now, macadamia nuts!”

Marukai fined $222,300 for Unregistered Pesticides

The U.S. Environmental Protection Agency said it’s fined the Marukai Corp. in Honolulu $222,030 for selling and distributing unregistered pesticides and improperly labeled pesticide devices.

The EPA said Marukai sold 37 different household pr including kitchen and bathroom cleaners, detergents, and other home care products that claim to kill insects, germs or bacteria and were not registered. In addition, two roach trap products were mislabeled and did not have directions for use.

The violations stem from an inspection conducted by the Hawaii Department of Agriculture’s Pesticides Branch in 2008.

“Consumer products claiming to disinfect, kill, or control germs and pests, including home care products, must be registered as pesticides,” said Dean Higuchi, Hawaii Press Officer for the EPA’s regional office. “Retailers need to ensure the products they sell have the required labeling to limit risks to public health and the environment.”

Hawaiian Airlines to Start Daily Flights to Osaka

Hawaiian Airlines said it will begin daily non-stop flights between Honolulu and Osaka in July pending approval by the Japanese government.

“The response to our new Haneda service has been stronger than expected, and we have accelerated our plans to offer our authentic Hawaii travel experience to Osaka and Japan’s second most populous region,” said Mark Dunkerley, Hawaiian president and chief executive officer.

Hawaiian’s new Osaka flights will add approximately 100,000 new air seats annually to Hawaii from Japan, the state’s second-largest market for visitors.

The Honolulu-based airline said Osaka’s location in the Kansai region will significantly strengthen Hawaiian’s ability to attract customers from Asia, with convenient flight connections from other cities in Japan, China and other countries in Asia. Same-day ground connections are also available to several major cities in Japan.

Hawaii Tops when it comes to Honeymoons

Hawaii is the top choice for 2011 honeymoons, according to a poll by Brides magazine and the Signature Travel Nework.

The poll of 6,000 travel agents in North America found Hawaii beat out other romantic destinations such as French Polynesia, Fiji and Italy.

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