Spending bill directs government to pay Indian contracts

Correction: An earlier version of the headline incorrectly referred to two contracts as being at issue. The cost disputes discussed in the article involve several hundred contracts. This version has been corrected.

January 14

The spending bill being considered in Congress this week orders two federal agencies to fully fund Native American contracts that were the subject of two Supreme Court rulings over the past decade.

The 2014 spending bill rejects the Obama administration’s proposal to cap the costs on each contract at levels that would have been millions of dollars below what tribes say they are owed, and millions below the agencies’ own cost estimates.

Congressional negotiators also rejected the administration’s efforts to eliminate the tribes’ right to seek legal remedies when contract claims are not paid in full.

“The administration cannot treat the health of our nation’s first people as if it’s a line item to prioritize or balance according to their agenda,” Sen. Lisa Murkowski (R-Alaska) said. “It is a requirement of this nation and a promise that has been broken for too long.”

The contracts at the heart of the battle were made possible by the 1975 Indian Self-Determination Act, which provides tribes with federal funding to run their own education, public safety and health-care programs.

The services — which were promised in perpetuity in tribal treaties — have traditionally been delivered by the Indian Health Service and the Bureau of Indian Affairs. The IHS said it needs more time to review the spending bill before it could comment. The BIA declined to comment.

The bill does not provide a specific amount for the contracts, leaving it up to the agencies to determine how they will finance the costs.

For decades, tribes that have self-determination contracts have routinely received less then the full amount for their contract support costs — which represent about 20 percent of total costs and include such items as travel expenses, legal and accounting fees, insurance costs and workers’ compensation fees.

The Supreme Court has ruled twice in favor of tribes on the issue of these unpaid costs. The most recent decision came in June 2012, when the court ordered the federal government to pay past claims in full. The U.S. Chamber of Commerce supported the tribes in both cases, telling the court it was concerned that the government’s position could set a dangerous precedent that could affect other federal contractors.

The administration has been slow to settle the past claims. Less than 1 percent of unpaid claims — which total an estimated $3 billion — have been paid by the IHS and the BIA since the 2012 ruling.

The omnibus spending bill does not address unpaid past claims, nor does it resolve the issue for future budget years.

However, the bill directs both agencies to work with House and Senate committees that deal with Native American issues to “formulate long-term accounting, budget, and legislative strategies to address the situation.” The agencies also are directed to submit a work plan on this issue 120 days after the spending bill is enacted.

The bill is expected to pass and be signed by President Obama this week.

Kimberly Kindy is a government accountability reporter at The Washington Post.
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