Federal contractors on edge as Indian tribes wait for claims
By Kimberly Kindy, Published: December 22
OWYHEE, Nev. — When the federal government reneged on its agreement to fully compensate the Shoshone-Paiute tribes for running a hospital on the Duck Valley reservation, the Washington contracting world barely noticed.
But after similar contracts were broken with hundreds of other Native American tribes and the debts they were owed snowballed to an estimated $2 billion, federal contractors joined their court battle, alarmed that the practice might eventually ensnare them as well.
Now, more than a year after the U.S. Supreme Court ruled for a second time in favor of the tribes and ordered the government to pay up, the two federal agencies that are on the hook — the Indian Health Service and the Bureau of Indian Affairs — have settled fewer than 1 percent of the claims, agency records show. The Obama administration, meantime, is asking Congress to approve a proposal that would permanently limit how much Native Americans could be paid in the future for certain costs associated with government contracts.
All this has federal contractors on edge again.
“This should put some fear into the small, medium and large contractors,” said Sen. Mark Begich (D-Alaska), who represents 229 tribes that have unpaid claims of more than $35 million. “This was a Supreme Court case, not based on Indian law, but contract law, and the federal government decided it could make partial payments.”
At issue are contract support costs that are spelled out in the agreements, under which the government pays tribes to run education, public safety and health programs on reservations. The support costs — which include items like travel expenses, legal and accounting fees, insurance costs and worker’s compensation fees — typically account for 20 percent of the value of the contract, according to Lloyd Miller, a lawyer who represented the tribes at the Supreme Court.
For decades, when the Indian Health Service and Bureau of Indian Affairs have run short of money, they have notified tribes that such support costs would be paid only in part, if at all. Agency officials have told both Congress and the Supreme Court that the government does not have enough funds in its budget to pay the agreed amount of the contracts.
“There is not enough money to go around to do all of the things the United States should do in Indian Country,” said Kevin Washburn, assistant secretary for Indian affairs with the Interior Department, during a congressional hearing last month about the unpaid claims.
The tribes, not surprisingly, call that excuse unacceptable.
“Can you imagine telling your landlord, ‘Sorry, I’m only going to pay you 80 percent of the rent this month?’ ” said Noni Manning, a Shoshone-Paiute tribal member and former tribal finance manager. “In the rest of the world, a contract is a contract.”
Federal contractors care deeply about whether the government will continue to pay contract support costs because most non-tribal service contracts with federal agencies provide for such expenses, according to several contracting experts. These costs typically account for about 30 percent of the value of a contract, the experts said.
The U.S. Chamber of Commerce has warned that the government could be setting a dangerous precedent for the federal contracting industry.
“The government’s position would have the effect of making contracts illusory by giving it a broad right to refuse payment at the stated price for services rendered,” the Chamber argued in a friend-of-the-court brief to the Supreme Court early last year.
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Federal contractors on edge as Indian tribes wait for claims - The Washington Post
The good news is Indians aren't eligible for Obamacare, so at least we don't have to deal with that train wreck.
