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Tribes ask Congress to address contract shortfalls
Wednesday, April 28, 2004

The leader of the Senate Indian Affairs Committee is sponsoring a bill that seeks to resolve a federal funding dispute that tribes say is costing them hundreds of millions of dollars.

Sen. Ben Nighthorse Campbell (R-Colo.) will hold a hearing this morning on S.2172, the Tribal Contract Support Cost Technical Amendments of 2004. He will take testimony from the Bureau of Indian Affairs and the Indian Health Service, the two federal agencies responsible for most of the programs available to Indian Country.

But the experience of tribal leaders is what is driving the debate. As tribes take over more and more of the BIA and IHS programs through contracts, they are running into shortfalls that affect their ability to carry out the goals of self-determination.

"If the U.S. has a contractual relationship with anybody out there in the U.S., it honors those contracts," Ron Allen, the chairman of the Jamestown S'Klallam Tribe of Washington who is one of the witnesses at the hearing, said recently. "Today, the U.S. is not honoring the full contracts that it has with existing tribes."

This year alone, tribes who manage BIA and IHS programs will see a $142 million shortfall, according to estimates from the National Congress of American Indians. Reports from the General Accounting Office (GAO), the investigative arm of Congress, also document the shortfalls.

The issue is significant enough that the U.S. Supreme Court has agreed to determine whether the IHS has to fund the contracts fully. A date for the hearing has not been set.

The dispute is rooted in the landmark Indian Self-Determination and Education Assistance Act. Under the law, passed in 1975, tribes can enter into contracts to manage BIA and IHS programs. The law dictates that tribes receive no less than the amount the government would have spent on the programs.

The law also requires the agencies to provide tribes with additional funds, known as contract support costs, needed to carry out the programs. But the BIA and IHS have interpreted this requirement differently than tribes. The agencies say they are limited by what Congress appropriates.

Campbell's bill, which is co-sponsored by Sen. Daniel Inouye (D-Hawaii), is a response to the tribal concerns. The measure would take away the discretion of the IHS or BIA by requiring them to provide enough contract support costs to tribes. Dr. Charles Grim, director of the IHS, and William Sinclair, the director of the Office of Self-Governance and Self-Determination at the BIA, will share their views at the hearing.

Also testifying is Chad Smith, the principal chief of the Cherokee Nation. The tribe is leading the contract support costs case against IHS and won an $8 million ruling last July from a federal appeals court. But this conflicted with another ruling that said the IHS didn't have to pay. The Supreme Court will resolve the dispute.

Lloyd Miller, an attorney representing the Cherokee Nation and other tribes, will testify as well. He has filed a separate class action lawsuit on behalf of Zuni Pueblo in New Mexico seeking to recover damages against IHS for failing to provide contract support costs. The case is on hold pending the Supreme Court's decision.

The hearing takes place at 10 a.m. More information can be found on the committee's web site at http://indian.senate.gov.

Get the Bill:
Tribal Contract Support Cost Technical Amendments of 2004 (S.2172)

Contract Support Cost Litigation:
Sonosky, Chambers, Sachse, Endreson & Perry

Lower Court Decisions:
Fed Circuit: Thompson v. Cherokee Nation (July 3, 2003) | 10th Circuit: Cherokee Nation v. Thompson (November 26, 2002) |

Relevant Documents:
Docket Sheet No. 03-853: Thompson v. Cherokee Nation | Docket Sheet No. 02-1472: Cherokee Nation v. Thompson | Department of Justice Petition No. 03-853 | Department of Justice Supplemental Brief No. 02-1472

Related Decisions:
9th Circuit: Shoshone-Bannock v. Thompson (October 16, 2001) | 9th Circuit: Navajo Nation v. HHS, No. 99-16129 (April 8, 2003)

Relevant Links:
Contract Support Costs, NCAI - http://www.ncai.org/main/pages/issues/
governance/contract_support.asp