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NATIONAL TRIBAL CONTRACTSUPPORT COST COALITION

BIA Tribal Budget Advisory Committee Meeting, March 2010

Bureau ofIndian Affairs

Tribal BudgetAdvisory

Committee Meeting

March 8, 2010

Washington, D.C.

CONTRACT SUPPORT COSTS UNDER THEINDIAN SELF-DETERMINATION ACT

PRESENTED BY:

LLOYD B. MILLER, LEGAL COUNSEL1425 K STREET NW, SUITE 600

WASHINGTON, D.C. 20005PHONE: (202) 682-0240

FACSIMILE: (202) 682-0249

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

EssentialGovernmental

Services

Under the Indian Self-Determination Act, Indian Tribes carry out essential governmental services such as health care, law enforcement, housing education, and other programs that the BIA and IHS would otherwise carry out in Indian country.

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

All Tribes in 35 States

Every Tribe in 35 States operates one or more self-determination contracts, from substance abuse programs to entire hospitals and police forces.

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

Impacts and

Transparency

Self-determination contracting has strengthened tribal institutions, increased local employment, and reduced the federal bureaucracy.

It is also fully transparent through independent annual audits.

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

FixedCosts

“Contract support costs” (CSCs) for ISDA contractors cover the independently-audited fixed overhead costs that an ISDA contractor must incur to operate an IHS or BIA facility or program (i.e., insurance; annual audits; payroll administration, etc.).

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

IDCRates

CSC’s are equivalent to “general and administrative costs” (G&A) required by government procurement contractors. Both costs are generally set by indirect cost rates that are issued by the federal government.

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

LostJobs

CSC shortfalls cost jobs. Since contract support costs are fixed, tribal contractors must cover shortfalls in CSC payments by reducing funding intended for services through personnel reductions.

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

DollarFor

DollarReductions

Every dollar in CSC shortfalls leads to reduced services and positions, and (for IHS contracts) also reduced collections from Medicare, Medicaid and private insurance (all of which fund additional services and positions).

All told, every $10 million in lost CSC payments means 243 fewer health care jobs (including jobs that would be paid with third party collections), and at least 100 fewer jobs in BIA-funded government programs.

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

The ISDAPenalty

CSC payment shortfalls penalize Tribes and their members for carrying out the Nation’s most successful initiative to strengthen Indian communities, by forcing program and personnel reductions.

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

Unfairness

Due to CSC shortfalls, tribally administered BIA and IHS facilities end up with less funding and fewer personnel than non-contracted BIA and IHS facilities providing the same services.

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

Cherokeev.

Leavitt

In Cherokee Nation v. Leavitt the Supreme Court held the United States liable for IHS’s failure to pay full CSCs in fiscal years 1994-1997. The Court reasoned that ISDA contractors have no fewer rights to be paid than do other government contractors.

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

Immediate Obligation

Appropriations for CSCs can be obligated to Tribes under existing contracts, within 10 days of apportionment to the BIA and IHS. CSCs directly fund jobs, and those jobs directly enhance services for health care, education, law enforcement and other essential governmental services across Indian country.

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

$64MBIA

Shortfall

The BIA projected shortfall for FY 2011 is $64 million (excluding the President’s proposed increase).

Absent any increases, IHS projects an FY 2011 shortfall of $150 million.

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

Magnitudeof the

Shortfall

The FY 2011 unpaid CSCs represent only 1.9% of the total BIA appropriation for Operation of Indian Programs.

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

Pacing

A plan should be developed to close the CSC funding gap within 2 years for the BIA and within 3 years got IHS.

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

CSC Impact

Statements

Future program increases should include CSC impact statements (currently estimated at 10.6 cents for each dollar added to Operation of Indian Programs).

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDER THE INDIAN SELF-DETERMINATION ACT

Discrimination Against Indian

Contractors

The President and Congress should not permit Indian contracts to remain the only government contracts that go unpaid. Deliberately underpaying government contracts with Tribes raises grave constitutional issues.

BIA Tribal Budget Advisory Committee Meeting, March 2010

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Projections of BIA Contract Support Cost Shortfall in 20081. 2008 OIP appropriation $2,080,261,000

2. less 2008 CSC appropriation [$149,628,000]

3. net 2008 OIP appropriation [excluding CSC dollars] (1-2) $1,930,633,000

4. total 2008 OIP under contract (per BIA 08 SF report) $619,476,520

5. % OIP under contract to total OIP (4÷3) 32%

6. total 2008 CSC requirement (per BIA 08 SF report) $204,075,690

7. relation of CSC to OIP under contract (6÷4) 33%

8. relation of total CSC requirement to total OIP apportion [excluding CSC dollars] (6÷3)

10.6%

This tells us that in FY 2008, an amount equal to 32% of the total OIP $$$ [excluding CSC dollars] was contracted to Tribes, and of that sum, an additional 33% as needed to pay full CSC.

That means 33% of 32% of total OIP dollars [excluding CSC dollars] is the annual CSC requirement. That’s 10.6% of total OIP dollars [excluding CSC dollars].

BIA Tribal Budget Advisory Committee Meeting, March 2010

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Projections of BIA Contract Support Cost Shortfall in 2009

BIA Tribal Budget Advisory Committee Meeting, March 2010

9. 2009 OIP appropriation $2,128,630,000

10. less 2009 CSC appropriation [$147,294,000]

11. net OIP appropriation [excluding CSC dollars] (9-10)

$1,981,336,000

12. projected 2009 CSC requirement (10.6% x 11) $210,021,610

13. less 2009 CSC appropriation (10) [$147,294,000]

14. 2009 projected shortfall (12-13) $62,727,610

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Projections of BIA Contract Support Cost Shortfall in 2010

BIA Tribal Budget Advisory Committee Meeting, March 2010

15. 2010 OIP appropriation $2,335,965,000

16. less 2101 CSC appropriation [$166,000,000]

17. net 2010 OIP appropriation [excluding CSC dollars] (15-16)

$2,169,965,000

18. projected CWC requirement (10.6% x 17) $230,016,290

19. less CSC appropriation in 2010 (16) [$166,000,000]

20. 2010 projected shortfall (18-19) $64,016,290

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Projections of BIA Contract Support Cost Shortfall in 2011

BIA Tribal Budget Advisory Committee Meeting, March 2010

21. proposed 2011 OIP appropriation $2,394,640,000

22. less proposed 2011 CSC appropriation [$187,526,000]

23. 2011 OIP appropriation [excluding CSC dollars) (22-21)

$2,207,114,000

24. projected CSC requirement (10.6% x 23) $233,954,000

25. less proposed CSC appropriation (22) [$187,526,000]

26. 2011 projected shortfall (24-25) $46,428,000

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Projections of BIA Contract Support Cost Shortfall for 2012

BIA Tribal Budget Advisory Committee Meeting, March 2010

27. Projected 2012 OIP appropriation (2.527%) $2,455,152,553

28. less proposed 2011 CSC appropriation (22) [$187,526,000]

29. 2012 OIP appropriation [excluding CSC dollars) (28-29)

$2,267,626,553

30. projected CSC requirement (10.6% x 29) $240,368,415

31. less proposed CSC appropriation (28) [$187,526,000]

32. 2012 projected shortfall (30-31) $52,842,415

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Projections of BIA Contract Support Cost Shortfalls in 2008, 2009, 2010, 2011 & 2012

BIA Tribal Budget Advisory Committee Meeting, March 2010

33. 2008 CSC shortfall (reported by BIA) $57,730,229

34. 2009 CSC shortfall (projected) (14) $62,727,610

35. 2010 CSC shortfall (projected (20) $64,016,290

36. 2011 CSC shortfall (projected) (26) $46,428,000

37. 2012 projected shortfall (30-31) $52,842,415

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FY 2011 Shortfall Percentages

FY 2011 appropriations ÷ $187,526,000 = 92% FY 2008 requirement ÷ $204,075,690  FY 2011 appropriations ÷ $187,536,000 = 80% FY 2011 requirement ÷ $233,954,000

BIA Tribal Budget Advisory Committee Meeting, March 2010

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CONTRACT SUPPORT COSTS UNDERTHE INDIAN SELF-DETERMINATION ACT

If you have any questions or comments, please contact:

BIA Tribal Budget Advisory Committee Meeting, March 2010

National Tribal Contract Support Cost Coalition

Alaska Native Tribal Health ConsortiumArctic Slope Native Association, Ltd.

Cherokee NationChippewa Cree Tribe of the Rocky Boy’s Reservation

Choctaw NationConfederated Salish and Kootenai Tribes

Copper River Native AssociationForest County Potawatomi Community

Kodiak Area Native AssociationLittle River Band of Ottawa Indians

Pueblo of ZuniRiverside – San Bernardino County Indian Health

Shoshone Bannock TribesShoshone-Paiute Tribes

Spirit Lake TribeYukon-Kuskokwim Health Corporation

Lloyd B. Miller

1425 K Street, NW, Suite 600Washington, D.C. 20005

Phone: (202) 682-0240Facsimile: (202) 682-0249

lloyd@sonosky.net

900 West Fifth Avenue, Suite 700Anchorage, AK 99501Phone: (907) 258-6377

Facsimile: (907) 272-8332lloyd@sonosky.net