How federal contracts and tech ventures are opening new markets for Oregon tribes.
On the subject of economic-development opportunities in Coos County, Brenda Meade, chairwoman of the Coquille Indian tribe, is a master of understatement.
“Rural Oregon struggles,” she says.
But if the mountain won’t come to Mohammed, then Mohammed will go to the mountain. So a few years ago, Tribal One Broadband Technologies, a Coquille-owned telecommunications company, decided to go to the mountains in Denver, a hub of federal construction projects.
The tribe partnered with a local firm, Milender White, in a mentor-protege agreement under a U.S. Small Business Administration program for disadvantaged small businesses. One of the partnership's first projects was the Byron White U.S. Courthouse, a $12 million contract to renovate the federal building.
A Coquille tribal business has landed an Army Corp of Engineers contract to clean up the mudslides in Santa Barbara
Since then, Tribal One Broadband has worked on additional contracts in Colorado, including installing optical fiber network for the Bureau of Reclamation, subcontracting on a communications portion of a data-acquisition project for the Army and modernizing a sewer connection at the Denver Federal Center.
“We are really challenged doing business here." — Judy Metcalf
In February, Tribal One Broadband workers were hired by the Army Corp of Engineers to do cleanup work in Santa Barbara, California, after the devastating landslides. Now Tribal One is launching new construction and development services divisions, both of which are seeking certification under the same minority business initiative, the SBA’s 8(a) business development program.
“The way we look at this from a tribal perspective is an opportunity to go where the market is to bring dollars back home to benefit rural Oregon,” says Judy Metcalf, chief executive officer of the Coquille Economic Development Corporation, speaking by phone from California. “Because we are really challenged doing business here.”
THE COQUILLE ARE NOT the only Oregon tribe pursuing what Metcalf refers to as an “outside-in” economic-development strategy — setting up shop outside the reservation to funnel money back into the reservation.
Cayuse Technologies, a business services company owned by the Confederated Tribes of Umatilla, employs about 200 people in its Pendleton location. But the company, founded in 2006, has an additional 50 employees in Utah; Austin, Texas; Atlanta; and Washington, D.C. A new office just opened in Oklahoma.
In mid-February Cayuse received certification as an 8(a) program, making it the third Oregon tribe-owned company to possess an active certification. (The other is Blue Earth Services & Technology, of the Confederated Tribes of Coos, Lower Umpqua, and Siuslaw Indians).
Cayuse Technologies, Pendleton
Anticipating certification, Cayuse already has several contracts lined up, says CEO Billy Nerenberg. “The idea is that tribes are underserved socially, economically,” he says. “Money that we send them from our profits go to run schools, clean up roads.”
UNEMPLOYMENT RATES ON Oregon Indian reservations have dropped since the recession. And as the economic recovery continues, a few tribes have started to translate the business sense gained from operating hotels and casinos to other ventures.
“It’s a much more educated tribal economy,” says Robert Whelan, a senior economist with ECONorthwest. “The human infrastructure has greatly improved and has more depth and experience.”
Some tribes, like the Confederated Tribes of Warm Springs, aim to leverage their land into new economy industries like cannabis, drone testing and carbon offsets.
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Others, like the Coquille and Umatilla, are turning to a new generation of construction, professional services and tech services startups. The new cohort has also become more sophisticated about tapping into federal contracting programs aimed at minority businesses. Of those, the 8(a) is considered one of the most lucrative — and the most complicated.
“The contracts are in the billions of dollars,” says Nerenberg, who works on business development with tribes nationwide.
The Coquille tribe's Santa Barbara cleanup is a $15.29 million contract; Tribal One is the sole contractor, a state of affairs that demonstrates the value of the federal program in helping tribes gain the experience needed to access contracting projects on their own.
Continuing this record of success is one reason the Tribal One brand is seeking certification for its other divisions; the goal is to provide the federal government with a full slate of products and services, Metcalf says. “Doing work in government contracting is very competitive, and we are lucky the tribe is pursuing an overall long-term strategy for 8(a).”
“The contracts are in the billions of dollars." — Billy Nerenberg
The Tribal One companies and Cayuse Technologies are in startup or growth mode and have reinvested most of their earnings into business development. In other words, they’ve yet to provide meaningful revenue to the tribe — and that, after all, is the endgame, since tribes don’t have a tax base.
Still, there are other benefits. Tribal One created a college internship for tribal members; a former intern, Lindsay Middleton, is now working for Deloitte in Denver, auditing construction-accounting systems.
One of Cayuse Technologies’ contracts is with the Department of Defense. The job requires expensive and complex security clearances, says Nerenberg. Based on their knowledge of classified environments, around 15 employees have since been recruited to other companies in larger cities.
Cayuse itself represents a broader evolution in tribal business development. “Most tribes don’t have anything to do with technology,” Nerenberg says. “We’re one of the first in the nation to focus on software.” (Cayuse Technologies started as a partnership with global professional services firm Accenture so the latter could access federal contracts for tribal business. Today, Accenture is a client.)
THESE SUCCESS STORIES come with a few challenges and raise a few questions.
What happens to the reservation as young people leave for better opportunities in metropolitan areas? It’s a common story in rural Oregon: how to grow jobs close to home so the communities don’t leach population. A closer look at company demographics also reveals some vexing numbers: Of the 250 employees who work for Cayuse Technologies, only 32 are tribal members.
Debra Croswell, Cayuse Technologies
“You don’t see a lot of tribal members in tech,” says Debra Croswell, a former Umatilla tribal government executive who started work in January as Cayuse director of compliance. “We have some work to do as a company to continue to inform our tribal members and provide ways for them to come into the company.”
Croswell, who says it’s important to her to stay on the reservation — “it’s where I grew up” — is one of several executives training to transition the company to tribal management. Although the Umatilla tribe owns Cayuse, the business is overseen by a board of directors, not the tribal board of trustees.
A former Microsoft and Intel executive, Nerenberg himself is “as Dutch as they come,” he says. His goal is to move management to tribal leadership in the next five years.
For her part, Croswell says she wants to be more aggressive about funneling company profits into the tribe: “That is an area I want to help manage and make them proactive about doing.”
“It’s probably one of the most isolated areas in the Lower 48.” — Eric Hawley
AS THE COQUILLE AND UMATILLA tribes chart a new path, other tribes still struggle to diversify beyond the casino. Eric Hawley, chair of the Burns Paiute Tribe, says he’s interested in pursuing small-business ventures on a reservation where unemployment still hovers above 20%, according to data from the Oregon Employment Department. The high rate is due in large part because reservation land sits at least two hours from any large population center.
“You can come here and manufacture whatever, but you can’t ship it out,” Hawley says. “It’s probably one of the most isolated areas in the Lower 48.”
Hawley sees promise in tech startups and data-storage facilities, but he doesn’t quite know where to start. “It’s kind of like a blank canvas right now.”
Seven years into an economic recovery, a combination of in-house savvy, business development assistance and minority business set asides is giving more tribes an opportunity to fill in the canvas. But in a state where 60% of tribal income still comes from gambling operations, the work has just begun.
“The 8(a) program gives the tribe capacity and adds capital to reinvest at home,” says Metcalf. “But just because it’s an opportunity,” she says, “doesn’t mean it’s easy.”
A version of this article appears in the March 2018 issue of Oregon Business.
Correction appended: This article has been amended to reflect the fact that Accenture did not sell Cayuse Technologies to the Confederated Tribes of Umatilla. Cayuse started as a joint venture and Cayuse has always been fully owned by the Umatilla tribe.
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