Anchorage Assembly unanimously passes veteran-owned business preference ordinance

The Anchorage Assembly voted unanimously Tuesday to create a preference program for veteran-owned businesses in municipal contracting. The Assembly first rejected the administration's competing version of the measure before amending and passing the one backed by its own sponsor — a quiet sign that the mayor's preferred approach couldn't command the body.

A key amendment from Assembly Member Donald Handeland, approved 10-2, changed how the preference would apply. Rather than automatically awarding a contract to a veteran-owned business at a higher bid, his amendment gives a qualifying business the opportunity to match the lowest competing bid. Non-veteran contractors who submit the lowest initial bid can lose the award if a veteran-owned business chooses to match their price. If the veteran-owned business declines to match, the contract goes to the original low bidder, capping taxpayer cost at that amount.

"My proposal keeps the veteran-owned business preference, but structures in a way that protects taxpayers from higher costs," Handeland said. "This keeps the preference meaningful while ensuring the municipality is always still paying the lowest price."

The ordinance requires qualifying veterans to be current Alaska residents. The assembly also amended the measure to replace a pro-rata joint venture calculation with a simpler majority-ownership test, drawing that language from the administration's competing version. The ordinance also mandates annual reporting so the assembly can track financial impact.

Assembly Member George Martinez said he supported the measure but wanted the vote recognized as the start of a broader conversation. "Although I'll be supporting this today, I also wanted to flag that preferences in this community have been long debated when it comes to Black folk, people of color, and others, historically marginalized communities who have not had economic opportunities to participate in procurement," he said.

Any such preference would face a far steeper legal test than the veterans' measure. Courts treat veteran status as an ordinary policy classification, but government programs that grant preferences based on race are subject to strict scrutiny under the Equal Protection Clause. Under the U.S. Supreme Court's decision in City of Richmond v. J.A. Croson Co., a municipality must point to specific evidence of its own past discrimination — not general societal inequity — to justify a race-conscious contracting remedy, and such programs are frequently struck down.

Sponsor Assembly Member Erin Baldwin-Day said the annual reporting requirement gives the assembly a tool to adjust the program if costs run higher than expected. "I hope that this is an opening salvo in a much broader conversation about how the municipality becomes a really great business partner and invites new folks to be in business partnership with the MOA," she said.