Economic and revenue diversification has been an increasing priority for Tribal leaders, who are working to bolster their communities’ financial security, stability, and resilience. Acquiring businesses can be a particularly advantageous strategy, giving Tribes immediate access to new revenue streams, operational capabilities, and expertise.
Pursuing these opportunities through Tribal 8(a) and other government programs has proven to be a successful path to economic diversification, though Tribal Nations can face significant challenges and strict requirements along the way. Those benefits and difficulties underscore the importance of taking a strategic approach to business acquisition and market expansion, and of leveraging financial experts to support these initiatives.
Economic landscape and market conditions
While gaming remains a top industry for Tribal Nations in terms of revenue, federal contracting has grown more quickly. From 1988 to 2021, federal contracting revenue grew at a 41.6% annualized rate, compared with 16.8% for gaming over the same period1. The latest data from the end of 2025 found that 55.5% of Tribes were involved in federal contracting2. This growth has boosted both total revenue and increased revenue diversification for Tribes awarded contracts.
Certain sectors such as IT services, aerospace and defense, energy, and telecommunications offer Tribal prioritization, which can be a significant advantage. Despite disruption in 2026 to the government IT services sector, IT service contract spending at the local level is likely to continue as state administrations work to update legacy and disparate technology frameworks3. Government programs supporting broadband infrastructure and service contracts in Indian country also open new avenues for growth. In the energy sector, Tribal entities’ access to natural resources crucial for renewable energy production could offer an advantage over non-Tribal competitors.
The special considerations afforded to Tribal organizations through the 8(a) program offer a strategic advantage in securing contracts and acquiring businesses. Tribal entities can pursue federal contracting opportunities through sole-source contracting or joint ventures to enter new markets through acquisitions, enhancing their economic resilience and foster self-sufficiency.
Understanding the acquisition challenges and requirements
Entering a new market is rarely easy, and the requirements of the 8(a) program and government contracting can make the process even more difficult for Tribal leaders. Here are some key considerations.
- Identifying potential opportunities: The first step toward economic diversification involves recognizing viable business acquisition opportunities. This requires a deep understanding of market trends, an assessment of growth potential, and alignment with Tribal values.
- Analyzing risk: Evaluating the financial health and sustainability of potential acquisitions is critical. This includes thorough due diligence — examining financial statements, legal standing, and operational efficiency. Reviewing historical performance and assessing long-term viability are crucial steps to mitigate acquisition risk.
- Strategic planning: Developing a robust business acquisition strategy is essential for sustained success. This involves setting clear objectives, understanding the competitive landscape, and crafting a detailed plan that outlines the steps to achieve desired outcomes.
- Understanding regulatory environments: Economic diversification through acquisition requires knowledge of the regulations that govern business operations both on and off Tribal lands.
- Capital access and financing solutions: While Tribal Nations often have financial capacity to support acquisitions, navigating access to capital and funding sources with various criteria and limitations can be a complicated process.
- Workforce development and training: Ensuring the availability of a skilled workforce to manage and grow new ventures is another critical aspect of economic empowerment. Consider prioritizing workforce development initiatives, such as offering resources for training and skill building.
The value of strategic partnership
Developing a strategic business acquisition approach and navigating the federal contracting landscape can be challenging for many Tribal communities. Tribes who have historically relied on gaming and natural resources as their sole revenue sources, as well as Tribal entities that have experienced a recent injection of funds, often struggle with knowing where to start.
Collaborating with financial partners who have a deep understanding of the unique landscapes of Tribal economies and full transaction-lifecycle capabilities can help guide the path. These offerings can support your community every step of the way during an acquisition, including:
- M&A advisory
- Market assessment
- Due diligence and closing
- Financing and capital solutions
- Succession planning
To learn more about how Huntington and Capstone Partners work together to support your Tribal community’s economic diversification initiatives, contact the Huntington Native American Financial Services team.
