Case Studies

KOMAN Diversified Services, LLC

A Highly Capable, Socially Conscious Alaska Native 8(a) Company

When oil was discovered at Prudhoe Bay, Alaska in 1968, the federal government found itself in a predicament. Although there were vast oil reserves waiting to be extracted, the nearest ice-free port was 800 miles away in Valdez and a 48-inch diameter pipeline had to be built to carry the oil to world markets.

However, before the first length of pipe for the Trans-Alaska Pipeline System could be laid, the federal government had to find a way to obtain the right-of-way on all future pipeline property. Since Alaska Native tribes legally claimed some of this land, the U.S. Congress passed the Alaska Native Claims Settlement Act in 1971. The Act provided 44 million acres of land and $962.5 million to Alaska Natives in exchange for their aboriginal land rights.

Against this backdrop Natives of Kodiak, Inc. (NOK) was formed in 1973 as a for-profit corporation in Kodiak, Alaska, when it received $250,000 and 23,040 acres of land. From these humble beginnings, NOK’s nine-member shareholder Board of Directors has charted a path to growth and business success.

Dedicated to Growth

Michael Kelly, president and CEO for NOK, indicates that the parent company now has a number of subsidiaries engaged in a wide range of business lines, including: military base operations support services, government construction contracts, military uniforms and logging operations. NOK also has investment portfolios to finance its growing operations, pay quarterly dividends and award annual shareholder scholarships. David Anderson, a shareholder, is a vital part of the executive team, serves as vice president for NOK, and is responsible for daily management of all NOK natural resources, land development, shareholder relations and daily interaction on the Kodiak U.S. Coast Guard Base Operations Support contract.

Kelly further explains the company’s strength as follows: “Next to our talented and dedicated employees, the single most important asset we have is our Small Business Administration (SBA) Disadvantaged Business status. We work very hard to comply with SBA regulations to ensure our continued participation in the 8(a) Program and enjoy the competitive and direct contract award opportunities it provides us.”

KOMAN, Inc. was NOK’s first foray into the SBA 8(a) Program and it was certified in 2002. Since its inception, it has been involved in government construction contracts, uniform and apparel manufacturing, and base operations support services. KOMAN, Inc., along with its joint venture partner Bering Straits Native Corporation, provide a full range of base support services to the U.S. Coast Guard Base on Kodiak Island – the largest such base in the world. Both these Alaska Native firms have worked hard over the past six years to provide the best possible value and keep this important base maintained in peak condition.

KOMAN Diversified Services, LLC, (KDS) located in Anchorage, Alaska, is now NOK’s primary SBA 8(a) company and was certified in 2008. It is actively engaged in government construction contracts and apparel manufacturing. KDS’ major construction teaming partners include TolTest, Inc. in Toledo, Ohio, and Smith Manus Surety Bonds in Louisville, Ky. KDS has teamed with these exceptional companies to enable it to provide a wide range of construction management capabilities from large design-build projects to routine repairs and maintenance. KDS has a bonding capacity of $10 million per project / $30 million aggregate, so it can handle sizeable projects independently.

To further diversify its operations and generate additional income for its 860 shareholders, KDS has partnered with Propper International, one of the largest and most respected military uniform manufacturers, to operate a plant in Las Marias, Puerto Rico. The new joint venture (KOMAN-Propper, LLC) employs 420 local residents and makes uniforms for U.S. Armed Forces, police and government agencies. This joint venture was recently awarded a significant government uniform contract and other potential awards are pending.

Kelly states that Alaska Native Corporations are so important for the following reasons: “Alaska is an expensive place to live, with housing, food, fuel and health care costs considerably higher than the national average. Our shareholders have told us how much they appreciate the dividends, scholarships and job placement opportunities we provide. All of us are committed to further improving the overall quality of life for our 860 Alaska Native shareholders – and doing it on a daily basis.”

Demonstrating Flexibility

The company’s construction division has stayed busy throughout the economic downturn as well. According to Kelly, KDS has $15.5 million in ongoing construction projects right now. “We recently finished a C-5/C-17 Cargo Aircraft Maintenance Training Facility for the Air Force and have two more projects at Dover Air Force Base in Delaware working with TolTest,” says Kelly. “We also completed upgrades to a number of Sensitive Compartmented Information Facilities with two more of our top-notch subcontractors: SCIF Constructors, LLC and Palmer Contracting Group. The federal government has been pleased with the results of our combined efforts.”

Natives of Kodiak, Inc. also gives back to the community with donations to the Alutiiq Museum in Kodiak, Alaska. Prior to becoming a U.S. territory and state, countless Native artifacts were taken from the local area and are now in U.S. and foreign museums. The Alutiiq Museum is working hard to bring these artifacts and their rich history back home for future generations. The museum also routinely sponsors archeological visits to ancestral sites with local students through a program called “Dig Afognak.”

In conclusion Kelly adds, “We are known for our business integrity, capability, flexibility and total commitment to deliver on our promises. As long as we remain focused on these things, we feel that we will continue to be successful.”

Here in the U.S. corporations tend to have a negative reputation because of their adherence to the bottom line, regardless of the human impact. Natives of Kodiak, Inc. and its subsidiaries are dedicated to helping communities while providing top-quality service, which is a business model that should be copied more often.

Published on: March 9, 2013

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