[Congressional Record Volume 146, Number 38 (Thursday, March 30, 2000)]
[Extensions of Remarks]
[Page E462]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       TRIBAL CONTRACT SUPPORT COST TECHNICAL AMENDMENTS OF 2000

                                 ______
                                 

                             HON. DON YOUNG

                               of alaska

                    in the house of representatives

                        Thursday, March 30, 2000

  Mr. YOUNG of Alaska. Mr. Speaker, today I am introducing a bill to 
make technical amendments to the contract support cost provisions of 
the Indian Self-Determination Act. These amendments are long overdue, 
and will finally keep faith with the hundreds of tribes and tribal 
organizations across the country that so ably carry out the Federal 
Government's health care and social service programs.
  One quarter of a century ago Congress firmly launched the Nation into 
the Indian Self-Determination era by enacting the Indian Self-
Determination and Education Assistance Act of 1975. One goal of the Act 
was to break the cycle of paternalism and despair in our Native 
American communities. A second goal of the Act was to foster self-
reliance and independence. And a third goal was to begin dismantling 
part of our highly inefficient and distant Federal bureaucracy, by 
turning over the daily operation of Native American programs from the 
Federal Government to the tribes and tribal organizations themselves.
  Twenty-five years later the Indian Self-Determination Act experiment 
has proven to be a resounding success. All across the country American 
Indian and Alaska Native tribes and tribal organizations are 
administering contracts to operate the Federal Government's hospitals, 
clinics, law enforcement programs, social welfare programs, education 
programs and a raft of other initiatives serving some of the neediest 
people in our Nation. And they are doing this with greater efficiency 
and more services than we here in Washington could ever do it.
  In my great State of Alaska, the Alaska Native people have been at 
the forefront of this effort, leading the country's Native American 
communities in the administration of Bureau of Indian Affairs and 
Indian Health Service programs. Over one-quarter of all IHS programs 
currently under Native American operation are operated by Alaska Native 
tribal organizations, who administer over $200 million annually in 
desperately needed health care programs serving remote villages, many 
in the midst of Third-World conditions. Likewise, Alaska Native tribal 
organizations operate the entire BIA system on their own. No other area 
of the country is as advanced in these respects.
  Despite its successes, the policy of self-determination has been 
consistently plagued by problems, with the most severe being the 
failure of the IHS and the BIA to fully pay contract support costs 
associated with carrying out these Federal Government programs under 
duly-executed contracts. This failure has amounted to a cruel hoax on 
the Native American people being served under these contracts.
  Let me explain.
  Mr. Speaker, the programs that have been turned over to Alaska Native 
and American Indian operation have from the beginning been severely 
underfunded. A
  Mr. Speaker, this should not be. In any other area where the Federal 
Government negotiates contracts with the private sector, the Federal 
Government fully pays the contractor's audited general and 
administrative overhead costs. Indeed if the government fails to pay, 
it can be held liable in a court of law. But somehow when it comes to 
Native American contractors, the Government thinks it's alright to 
change the rules, to break the contract, and to deny any liability 
regardless of the impact on the local people being served. Tribal 
contractors are made to be second-class contractors. Mr. Speaker, this 
is not right, and the bill I introduce today will put an end to this 
practice.
  In addition, the bill will overcome a number of the more technical 
problems that have plagued this system. Just one example will make this 
clear.
  Most Native American contractors administering IHS and BIA programs 
run a wide range of other federal programs too. For most tribes, the 
Interior Department's Office of Inspector General determines a 
reasonable and necessary administrative overhead rate required to carry 
out all these programs, using strict guidelines issued by the Office of 
Management and Budget. Under the controlling OMB circulars, each 
federal agency entering into contracts or grants with that tribal 
contractor is then required to abide by the government-wide indirect 
cost rate set by the OIG.
  This system would be fair to the Federal Government, fair to all of 
the funding agencies, and most importantly fair to the tribal 
contractors themselves, if everybody played by the OMB Circular rules. 
But many federal agencies do not. They either ignore the government-
wide rate that has been determined by the Inspector General, or they 
recognize only a fraction of the rate. Once again, the Native American 
contractors are left holding the bag. In 1998, a ten-year-old class 
action lawsuit against the Federal Government was eventually settled 
for over $70 million over this failure alone. The bill I introduce 
today assures that no such liabilities will ever recur in the future.
  Further, this bill will clarify the rules governing the expenditure 
of contract funds; initiate a new measure to maximize efficiency in 
tribal program operations, improve Federal administration of the Act; 
clarify the rules governing the computation of contract support costs; 
provide the Federal agencies more time to plan for the transfer of 
Federal programs to tribal operation; and strengthen the Act's 
enforcement measures.
  Mr. Speaker, in recent years I and many of my colleagues have worked 
very hard to correct the inequities in the contract support cost 
system. We have done this because that system is integral to the 
success of our country's overall Indian Self-Determination Policy. I 
believe firmly in reducing the size of the Federal bureaucracy. I 
believe firmly in maximizing local control. I believe firmly in the 
sanctity of our Government's private contracts with Indian and Alaska 
Native contractors. And I believe firmly that the Nation's Indian Self-
Determination Policy must be corrected so that there is no longer an 
unfunded mandate that is paid for out of the very same trust programs 
that serve the neediest of the needs of our First Americans. I 
therefore urge that my colleagues on both sides of the aisle join me in 
seeing that this important legislation is enacted as swiftly as 
possible.

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