A multi-billion dollar defense contractor that gets federal work without competition because of the hardships of life as an “Alaskan native” doesn’t just have an apparently Eskimo-free executive suite — it passes through millions to the non-native companies of the CEO’s husband, which don’t even pretend to be indigenous.
ASRC Federal’s business model relies on racial preference laws that allow no-bid contracts for firms owned by minorities, with even larger contracts available to those owned by indigenous people. It is named after, and is owned by, the Arctic Slope Regional Corporation, a for-profit company whose shares are held by 14,000 Inupiaq natives in a remote region of Alaska.
There is little indication that the government’s so-called 8(a) program is training disadvantaged indigenous people to do high-skilled work. The company declined to say how many Alaska natives work there. Its CEO is Jennifer Felix, a white woman who lives in a $4.3 million home in Loudoun County, Virginia, as The Daily Wire reported last month.
Much of the money awarded to “Alaskan”-owned firms isn’t done by those firms at all. ASRC has subcontracted $3.5 million to the companies of Jennifer Felix’s white husband. Even without her salary from ASRC — which it declined to disclose — that’s nearly enough to pay for their 14,000-square foot home with a guest house and private movie theater. Meanwhile, the largest village in the Inupiaq area has only one rusted-out, closed-down theater.
“The 8(a) program wasn’t designed to bankroll Beltway power-couples,” said Tom Jones, president of the American Accountability Foundation, whose researchers tipped The Daily Wire off to the subcontracts. “This is a corrupt grift and Americans are paying for it.”
In 2022, the Department of Homeland Security gave ASRC Federal Data Network Technologies LLC a $16.7 million contract for “networking maintenance and engineering services.” Nearly a fifth of the work — $3 million — was subcontracted out to companies associated with Jennifer Felix’s husband.
Ironically, the contract was to help the “acquisition program management office,” which deals with contracting policy — even as the contract is itself a case study in how the intent of the DEI program is blatantly being undermined.
Ken Felix was vice president at B&B Consulting Enterprises, a software firm. The company received more than $1.7 million in subcontracts on the ASRC job. According to a lawsuit filed by B&B, the company terminated Ken from his $230,000-a-year job in September 2022.
He and another employee created Daurem LLC as a competing company, despite provisions in their contracts, and ASRC then moved the subcontract to Daurem, specifically naming Ken Felix as Program Manager, the suit said. Daurem LLC has received more than $1.2 million on that job.
Money subcontracted to the CEO’s husband’s firm means less profit for indigenous shareholders. Yet moves that undermine the goals of the 8(a) program are so common, and have historically faced so little scrutiny, that they aren’t even hidden: ASRC, Daurem LLC, and the TSA won an award for their “partnership.” The American Council for Technology and Industry Advisory Council lauded them for working together to develop “biometric identity verification technology, currently deployed at 10 high-volume international airports.”
Agile Decision Sciences has disclosed 103 “teaming partners,” a euphemism used in the 8(a) world that amounts to work being subcontracted out to non-disadvantaged firms, while being open about it with the government because the qualifications of the non-disadvantaged partner help convince the government to give the contract.
Even as the Alaska native contracting program was justified by the poverty and low-tech lifestyles of the indigenous people, its proposition rests on the idea that they are now developing America’s most high-tech defense systems. In reality, the work is more often done by highly-paid white people in Virginia, the most common state where “Alaskan” firms operate.
Jennifer Felix has showered liberal politicians with tens of thousands of dollars in donations to groups like “Pro-Choice Majority 2024,” “Elect Dems Now,” and the campaigns of Democrat Virginia senators Tim Kaine and Mark Warner.
According to data from HigherGov.com, the vast majority of the husband’s company’s government revenue has come from ASRC subcontracts. Another ASRC subsidiary gave Daurem LLC a $480,000 subcontract on a TSA contract that it got without competition — an eighth of the money paid out on the overall contract. The contract description reads, “This is an 8(a) award to Agile Decision Sciences, LLC for a mobile phone app to do identity verification activities for transportation security officers.”
ASRC said in a statement that “Any characterization or suggestion that ASRC Federal has improperly steered contracts to its leadership’s family members is materially false … Leaders including our CEO adhere to a strict corporate code of conduct and a conflict-of-interest policy to ensure proper protocols are followed.”
B&B’s lawsuit said that Ken Felix arranged for other employees to leave the company to work directly at ASRC, and also teamed up with a different woman-owned business called Intellect Solutions LLC to bid on work that was, thanks to 8(a), earmarked exclusively for woman-owned contractors.
Daurem’s lawyers replied that “employees do not owe fiduciary duties of loyalty post-employment and are therefore free to compete against a former employer.” A judge rejected many of its arguments, and the lawsuit was settled soon after.
Secretary of War Pete Hegseth has said his department is cracking down on the 8(a) program.
“In the Pentagon, $100 million sole-source contracts go out the door to these 8(a) firms almost every day without any competition or opportunity for anyone else to bid,” he said. “In many, many instances, these socially disadvantaged businesses don’t even do work. They take a 10%, 20%, sometimes 50% fee off the top, then pass the contract off to a giant consulting firm.”
The Small Business Administration, which doles out the 8(a) designation to companies, last week said it has moved to ban 624 firms because “amid the Biden-era DEI agenda, the 8(a) federal contracting program became rife with so-called ‘socially and economically disadvantaged’ firms who abused sole-source and set-aside contracts to enrich themselves with pass-through schemes.”
Related: How A Top Pentagon Contractor Enriches DC Insiders Using Law Intended To Help Eskimos
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