[Federal Register Volume 61, Number 122 (Monday, June 24, 1996)]
[Rules and Regulations]
[Pages 32482-32535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15793]




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_______________________________________________________________________

Part II

Department of the Interior
Bureau of Indian Affairs

Department of Health and Human Services
Indian Health Service
_______________________________________________________________________



25 CFR Part 900



Indian Self-Determination and Education Assistance Act Amendments; 
Final Rule

  Federal Register / Vol. 61, No. 122 / Monday, June 24, 1996 / Rules 
and Regulations  

[[Page 32482]]



DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Indian Health Service

25 CFR Part 900

RINs 1076-AD21; 0905-AC98


Indian Self-Determination and Education Assistance Act Amendments

AGENCIES: Departments of the Interior and Health and Human Services.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Secretaries of the Department of Interior (DOI) and the 
Department of Health and Human Services (DHHS) hereby issue a joint 
rule to implement section 107 of the Indian Self-Determination Act, as 
amended, including Title I, Pub. L. 103-413, the Indian Self-
Determination Contract Reform Act of 1994. This joint rule, as required 
by section 107(a)(2)(A)(ii) of the Act, will permit the Departments to 
award contracts and grants to Indian tribes without the unnecessary 
burden or confusion associated with having two sets of rules for single 
program legislation. In section 107(a)(1) of the Act Congress delegated 
to the Departments limited legislative rulemaking authority in certain 
specified subject matter areas, and the joint rule addresses only those 
specific areas. As required by section 107(d) of the Act, the 
Departments have developed this final rule with active tribal 
participation, using the guidance of the Negotiated Rulemaking Act.

DATES: This rule will become effective on August 23, 1996.

FOR FURTHER INFORMATION CONTACT: James Thomas, Division of Self-
Determination Services, Bureau of Indian Affairs, Department of the 
Interior, Room 4627, 1849 C Street N.W., Washington, DC 20240, 
Telephone (202) 208-5727 or Merry Elrod, Division of Self-Determination 
Services, Office of Tribal Activities, Indian Health Service, Room 6A-
19, 5600 Fishers Lane, Parklawn Building, Rockville, MD 20857, 
Telephone (301) 443-6840/1104/1044.

SUPPLEMENTARY INFORMATION: The 1975 Indian Self-Determination and 
Education Assistance Act, Pub. L. 93-638, gave Indian tribes the 
authority to contract with the Federal government to operate programs 
serving their tribal members and other eligible persons. The Act was 
further amended by the Technical Assistance Act and other Acts, Pub. L. 
98-250; Pub. L. 100-202; Interior Appropriations Act for Fiscal Year 
1988, Pub. L. 100- 446; Indian Self-Determination and Education 
Assistance Act Amendments of 1988, Pub. L. 100-472; Indian 
Reorganization Act Amendments of 1988, Pub. L. 100-581; miscellaneous 
Indian Law Amendments, Pub. L. 101-301; Pub. L. 101-512; Indian Self-
Determination and Education Assistance Act Amendments of 1990, Pub. L. 
101-644; Pub. L. 102-184; Pub. L. 103-138; Indian Self- Determination 
Act Amendments of 1994, Pub. L. 103-413; and Pub. L. 103-435. Of these, 
the most significant were Pub. L. 100-472 (the 1988 Amendments) and 
Pub. L. 103-413 (the 1994 Amendments).
    The 1988 Amendments substantially revised the Act in order ``to 
increase tribal participation in the management of Federal Indian 
programs and to help ensure long-term financial stability for tribally-
run programs.'' Senate Report 100-274 at 2. The 1988 Amendments were 
also ``intended to remove many of the administrative and practical 
barriers that seem to persist under the Indian-Self-Determination 
Act.'' Id. at 2. In fashioning the amendments, Congress directed that 
the two Departments develop implementing regulations over a 10-month 
period with the active participation of tribes and tribal 
organizations. In this regard, Congress delegated to the Departments 
broad legislative rulemaking authority.
    Initially the two Departments worked closely with Indian tribes and 
tribal organizations to develop new implementing regulations, 
culminating in a joint compromise September 1990 draft regulation 
reflecting substantial tribal input. Thereafter, however, the two 
Departments continued work on the draft regulation without any further 
tribal input. The revised proposed regulation was completed under the 
previous administration, and the current administration published the 
proposed regulation (1994 NPRM) for public comment on January 20, 1994, 
at 59 FR 3166. In so doing, the current administration expressed its 
concern over the absence of tribal participation in the regulation 
drafting process in the years following August 1990, and invited tribes 
to review the 1994 NPRM closely for possible revisions.
    Tribal reaction to the January 1994 proposed regulation was 
extremely critical. Tribes, tribal organizations, and national Indian 
organizations criticized both the content of the 1994 NPRM and its 
length, running over 80 pages in the Federal Register. To address 
tribal concerns in revising the proposed regulations into final form, 
the Departments committed to establish a Federal advisory committee 
that would include at least 48 tribal representatives from throughout 
the country, and be jointly funded by the two Departments.
    In the meantime, Congress renewed its examination into the 
regulation drafting process, and the extent to which events since the 
1988 amendments, including the lengthy and controversial regulation 
development process, justified revisiting the Act anew. This 
Congressional review eventually led to the October 1994 amendments. 
(Similar efforts by tribal representatives to secure amendments to the 
Act in response to the developing regulations had been considered by 
Congress in 1990 and 1992.)
    The 1994 amendments comprehensively revisit almost every section of 
the original Act, including amending the Act to override certain 
provisions in the January 1994 NPRM. Most importantly for this new 
NPRM, the 1994 amendments also remove Congress' prior delegation to the 
Departments of general legislative rulemaking authority. Instead, the 
Departments' authority is strictly limited to certain areas, a change 
explained in the Senate report that accompanied the final version of 
the bill:

    Section 105 of the bill addresses the Secretaries' authority to 
promulgate interpretative regulations in carrying out the mandates 
of the Act. It amends section 107 (a) and (b) of the Act by limiting 
the delegated authorization of the Secretaries to promulgate 
regulations. This action is a direct result of the failure of the 
Secretaries to respond promptly and appropriately to the 
comprehensive amendments developed by this committee six years ago.
* * * * *
    Section 105(l) amends section 107(a) by delegating to the 
Secretary the authority only to promulgate implementing regulations 
in certain limited subject matter areas. By and large these areas 
correspond to the areas of concern identified by the Departments in 
testimony and in discussions. Beyond the areas specified in 
subsection (a) * * * no further delegated authority is conferred.

Sen. Rep. No. 103-374 at 14. For this reason, the new rule covers 
substantially fewer topics than the January 1994 NPRM.
    As specified by Congress, the new rule is limited to regulations 
relating to chapter 171 of title 28 of the United States Code, commonly 
known as the ``Federal Tort Claims Act;'' the Contract Disputes Act of 
1978 (41 U.S.C. 601 et seq.); declination and waiver procedures; appeal 
procedures; reassumption procedures; discretionary grant procedures for 
grants awarded

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under section 103 of the Act; property donation procedures arising 
under section 105(f) of the Act; internal agency procedures relating to 
the implementation of this Act; retrocession and tribal organization 
relinquishment procedures; contract proposal contents; conflicts of 
interest; construction; programmatic reports and data requirements; 
procurement standards; property management standards; and financial 
management standards. All but three of these permitted regulatory 
topics--discretionary grant procedures, internal agency procedures, and 
tribal organization relinquishment procedures--are addressed in this 
rule.
    The 1994 amendments also required that, if the Departments elected 
to promulgate regulations, the Departments must use the notice and 
comment procedures of the Administrative Procedure Act, and must 
promulgate the regulations as a single set of regulations in title 25 
of the Code of Federal Regulations. Section 107(a)(2). Finally, the 
1994 amendments required that any regulations must be developed with 
the direct participation of tribal representatives using as a guide the 
Negotiated Rulemaking Act of 1990. This latter requirement is also 
explained in the accompanying Senate Report:

    To remain consistent with the original intent of the Act and to 
ensure that the input received from the tribes and tribal 
organizations in the regulation drafting process is not disregarded 
as has previously been the case, section 107 also has been amended 
by adding a new subsection (d), requiring the Secretaries to employ 
the negotiated rulemaking process.

    Sen. Rep. No. 103-374 at 14. As a result of the October 1994 
amendments and earlier initiatives previously discussed, the 
Departments chartered a negotiated rulemaking committee under the 
Federal Advisory Committee Act. The committee's purpose was to develop 
regulations that implement amendments to the Act.
    The advisory committee had 63 members. Forty-eight of these members 
represented Indian tribes--two tribal members from each BIA area and 
two from each IHS area. Nine members were from the Department of the 
Interior and six members were from the Department of Health and Human 
Services. Additionally, four individuals from the Federal Mediation and 
Conciliation Service served as facilitators. The committee was co-
chaired by four tribal representatives and two Federal representatives. 
While the committee was much larger than those usually chartered under 
the Negotiated Rulemaking Act, its larger size was justified due to the 
diversity of tribal interests and programs available for contracting 
under the Act.
    In order to complete the regulations within the statutory 
timeframe, the committee divided the areas subject to regulation among 
six working groups. The workgroups made recommendations to the 
committee on whether regulations in a particular area were desirable. 
If the committee agreed that regulations were desirable, the workgroups 
developed options for draft regulations. The workgroups presented their 
options to the full committee, where the committee discussed them and 
eventually developed the proposed regulations.
    The first meeting of the committee was in April of 1995. At that 
meeting, the committee established six workgroups, a meeting schedule, 
and a protocol for deliberations. Between April and September of 1995, 
the committee met five times to discuss draft regulations produced by 
the workgroups. Each of these meetings generally lasted three days. 
Additionally, the workgroups met several more times between April and 
September to develop recommendations for the committee to consider.
    The policy of the Departments was, whenever possible, to afford the 
public an opportunity to participate in the rulemaking process. All of 
the sessions of the committee were announced in the Federal Register 
and were open to the public.
    The Departments published draft regulations in a Notice of Proposed 
Rulemaking in the Federal Register on January 24, 1996, at 61 FR 2038. 
(1996 NPRM) In the 1996 NPRM, the Departments invited the public to 
comment on the draft provisions. In addition, the Departments outlined 
five areas in which the Committee had not yet reached consensus and 
asked for public comments specifically addressing those topics.
    Ultimately, the Departments received approximately 76 comments from 
Indian tribes and tribal organizations, addressing virtually every 
aspect of the proposed regulation. The full committee reconvened in 
Denver between April 29, 1996 and May 3, 1996 to review the comments, 
to evaluate changes suggested by the comments, and to approve final 
regulatory language.
    As a result of that meeting, the full committee was able to 
transmit a report to the Secretaries which included consensus 
regulatory language on all but four issues: internal agency procedures; 
contract renewal proposals; conflicts of interest; and construction 
management services. Tribal and Federal representatives prepared non-
consensus reports on these four issues, which were submitted to the 
Secretaries for a decision. One additional question arose, pertaining 
to Sec. 900.3(b)(11) of the regulation, and that was also referred to 
the Secretaries. On May 23, 1996 a delegation of tribal representatives 
met with the Chiefs of Staff of the two departments to present the 
tribal view of the unresolved issues. Decisions have been made based 
upon the arguments presented at that meeting, and the regulation 
incorporates those decisions.
    The Departments commend the ability of the committee to cooperate 
and develop a rule that addresses the interests of the tribes and the 
Federal agencies. This negotiated rulemaking process has been a model 
for developing successful Federal and tribal partnerships in other 
endeavors. The consensus process allowed for true bilateral 
negotiations between the Federal government and the tribes in the best 
spirit of the government-to-government relationship.
    In developing regulatory language, consensus was reached on the 
regulations which follow under subparts ``A'' through ``P''. In 
addition, at the request of tribal and Federal representatives, the 
Secretaries agreed to publish additional introductory materials under 
subpart ``A.''

Summary of Regulations and Comments Received

    The narrative and discussion of comments below is keyed to specific 
subparts of the rule. Matters addressed under the heading ``Key Areas 
of Disagreement'' in the Notice of Proposed Rulemaking are discussed 
under the appropriate Subpart.

Subpart A--Policy

Summary of Subpart
    This subpart contains key congressional policies contained in the 
Act and adds several Secretarial policies that will guide the 
Secretaries' implementation of the Act.
    A number of comments recommended that the statement that tribal 
records are exempt from disclosure under the Freedom of Information Act 
(Sec. 900.2(d)) be further explained to include annual audit reports 
prepared by tribal contractors and tribal records archived by the 
Federal government. The suggestion regarding archived tribal records 
has been adopted. However, section 7502(f) of the Single Audit Act of 
1984, 31 U.S.C. 7502(f), and OMB Circular No. A-128, Audits of State 
and Local Governments, subparagraph 13(e), state that single audit 
reports shall be available for public inspection within

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30 days after the completion of the audit. Therefore, these audit 
reports are available for public inspection.
    Numerous comments expressed concern over the nonapplicability of 
the Privacy Act to tribal medical records, in section 900.2(e). 
Although section 108(b) of the Act is binding in this respect, Subpart 
C (Sec. 900.8) has been amended to address the confidentiality of 
medical records. Indian Tribes and tribal organizations remain free to 
adopt their own confidentiality procedures, including procedures that 
are similar to Privacy Act procedures.
    A large number of comments urged that the NPRM be amended to 
include a Secretarial policy to interpret Federal laws and regulations 
in a manner that will facilitate the inclusion of programs in contracts 
authorized by the Act. In response to these comments, the Committee has 
added the language in Secretarial policy statement in Sec. 900.3(b)(8). 
This policy is not intended to limit in any manner the scope of 
programs, functions, services or activities that are contractible under 
section 102(a)(1) of the Act.
Discussion of Comments
    Several comments recommended that various policy statements be 
clarified to reflect the congressional policy that funds for programs, 
services, functions and activities are transferred to tribal 
contractors when contracts are awarded under the Act. These comments 
have been adopted and appropriate changes made to Sec. 900.3(a)(4), 
Sec. 900.3(b)(4) and Sec. 900.3(b)(9).
    One comment found the last two words of Sec. 900.3(a)(8) confusing 
due to the inclusion of the words ``as appropriate.'' In response, 
these words have been deleted in the final rule.
    Several comments recommended that the phrase ``and for which funds 
are appropriated by Congress'' be deleted from the Secretarial policy 
statement set forth in Sec. 900.3(b)(1). The Committee agreed and 
deleted this phrase in the final rule.
    The Committee revised 900.3(b)(7) (referring to the scope of 
programs that are contractible under the Act) to be consistent with the 
new policy set forth in 900.3(b)(8).
    Several comments urged that Sec. 900.d(b)(9) be amended to 
articulate more clearly the Secretaries' duty to commence planning for 
the transfer of programs to tribal operation immediately upon receipt 
of a contract proposal. In response to the comments, Sec. 900.3(b)(9) 
has been revised.
    A large number of comments urged that the provision regarding 
Federal program guidelines, manuals, or policy directives set forth in 
Sec. 900.5 of the NPRM be revised to refer more generally to any 
unpublished requirements. In response to these comments, Sec. 900.5 has 
been revised in the final rule.
    Some comments urged that language be included to identify the 
inherent Federal functions that cannot lawfully be carried out by an 
Indian tribe or tribal organization, and that therefore may not be 
contracted under the Act. The Committee did not adopt these comments 
due to the subject-matter limitations on its rulemaking authority set 
forth in section 107(a)(1) of the Act. Similarly, the Committee did not 
address comments relating to the appropriate uses of program income 
generated under the Federal Medicare and Medicaid programs.
    One comment expressed concern regarding the absence of clear 
provisions for tribal participation in the administration of Federal 
Indian programs. No change was made as this concern is already dealt 
with in Sec. 900.3(a)(1).
    One comment recommended that the Secretary adopt a policy that 
Indian tribes participate in the development of the budgets of agencies 
other than the Indian Health Service and the Bureau of Indian Affairs. 
The Committee did not adopt this proposal due to the subject-matter 
limitation set forth in section 107(a)(1) of the Act, and the 
limitation in section 106(I) of the Act regarding tribal participation.
    One comment urged that the Secretarial policy regarding tribal 
participation in budgetary matters set forth in Sec. 900.3(b)(6) be 
more clearly articulated as a mandatory duty. Nothing in the new 
regulation is intended to change the Department's current consultation 
requirements. Accordingly, no change was made in the text of the 
regulation.
    A few comments urged that the phrase ``for the benefit of Indians 
because of their status as Indians'' or the phrase ``for the benefit of 
Indians'' be further defined in the regulation. The Committee rejected 
suggestions that the concept of ``contractibility'' be further explored 
in the regulations due to the specific subject-matter limitations of 
section 107(a)(1) of the Act.

Subpart B--Definitions

Summary of Subpart
    Subpart B sets forth definitions for key terms used in the balance 
of the regulations. Terms unique to one subpart are generally defined 
in that subpart, rather than in subpart B.
Summary of Comments
    In response to one comment regarding the term ``awarding official'' 
the definition has been revised and an additional sentence added to 
make clear that an ``awarding official'' need not necessarily be a 
warranted contracting officer. Who the awarding official is in a 
particular situation will depend on to whom the Secretary has delegated 
authority to award the contract.
    In response to comments regarding the scope of Subpart C (which 
deals with ``initial contract proposals''), the term ``initial contract 
proposal'' has been added as a new definition in the final rule. The 
definition clarifies that the requirements for an ``initial contract 
proposal'' do not apply to other proposals such as proposals to renew 
contracts governing programs, services, functions or activities that 
are already under tribal operation.
    In response to one comment regarding the procedural aspects of 
reassumption, the definition of ``reassumption'' has been revised to 
refer the reader to the notice and other procedures set forth in 
Subpart P.
    One comment requested that the term ``Indian tribe'' be revised. 
The Committee rejected the comment in favor of the definition of this 
term already set forth in the statute and repeated in Sec. 900.6 of the 
final rule.
    Two comments urged that the Secretary add a new definition of the 
term ``consultation'' to establish a framework for this activity. The 
Committee rejected this proposal as beyond the scope of subjects which 
may be regulated under section 107(a)(1) of the Act. Similarly, the 
Committee rejected requests that the regulations include a definition 
of ``trust responsibility.''
    In the NPRM, the public was invited to comment on the disagreement 
within the Committee regarding the development of internal agency 
procedures. Specifically, as noted in 61 FR at 2039-2040, tribal 
representatives on the Committee urged that internal agency procedures 
be developed in precisely the same fashion as other regulations 
implementing the Indian Self-Determination Act Amendments of 1994, 
through the use of the negotiated rulemaking process. Federal 
representatives on the Committee supported instead a joint tribal and 
Federal commitment to work together to generate a procedural manual 
which would promote the purposes underlying the Act and facilitate 
contracting by Indian tribes and tribal organizations. The Federal 
committee members proposed committing to a firm timeline

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within which to produce such a manual. Further, the Federal Government 
committed to ``meaningful consultation'' throughout the manual 
development process.
    The Departments received many comments from tribal representatives 
addressing the issue of internal agency procedures as a subject for 
negotiated rulemaking. Those comments consistently supported the tribal 
proposal to include a Subpart in the regulation concerning internal 
agency procedures.
    Many of the comments indicated a belief that all internal agency 
procedures under which Indian tribes and tribal organizations exercise 
their self-determination should be promulgated by negotiated 
rulemaking. Those comments cited sections 107 (a) and (d) of the Act as 
authority for their recommendation.
    Tribal representatives also indicated a concern that absent formal 
rulemaking, Federal agencies might use internal procedures to 
circumvent the policies underlying the Act, thwarting the intent to 
simplify the contracting process and free Indian tribes from excessive 
Federal control. Two comments suggested that negotiating rulemaking 
procedures will ensure that Federal agencies would be bound to follow 
uniform procedures to implement and interpret the Act and the 
regulations.
    Two other comments wanted the regulation to state explicitly that 
the Secretaries lack authority to interpret the meaning or application 
of any provision of the Act or the regulations. Tribal representatives 
feared that a myriad of letters containing policy statements and 
correspondence interpreting reporting requirements would result if 
internal agency procedures are not tied to formal rulemaking.
    In response to the Federal proposal as detailed in the NPRM, 
several comments stated that it would not be acceptable to develop a 
manual in a setting which is less formal and structured than a 
negotiated rulemaking committee. In addition, comments objected that 
developing such a manual after the publication of a final regulation 
would violate the mandatory deadline imposed on the Secretaries by 
Congress.
    Several comments were suspicious of the government's commitment to 
seek tribal consultation on internal agency procedures. They stated 
that consultation alone would be insufficient to ensure that Indian 
tribes and tribal organizations are accorded the full benefits of the 
Act. Without full and active participation, one comment stated, Indian 
tribes would be in the position of attempting to change decisions made 
in advance by Federal agencies.
    The Departments agree to an enhanced consultation process in 
developing procedures that do not involve resource allocation issues. 
Features of this enhanced process could include facilitation by 
professional facilitators, consensus decision-making, opportunity for 
comment by tribal entities, and reporting of decisions to the 
Secretaries. The Departments will convene a meeting to begin this 
process within sixty days of the regulations becoming effective.

Subpart C--Contract Proposal Contents

Summary of Regulation
    Subpart C contains provisions relating to initial contract proposal 
contents. In this area, the committee opted to have minimal 
regulations. Subpart C consists of a checklist of 13 items that must be 
addressed in a proposal. In addition, the regulation contains a 
provision relating to the availability of technical assistance to 
assist Indian tribes and tribal organizations in preparing a contract 
proposal, and a provision relating to the identification of Federal 
property that the tribe or tribal organization intends to use during 
contract performance.
Summary of Comments
    Several comments recommended amending Sec. 900.7 to permit the 
Secretary to provide technical assistance funding in addition to 
technical assistance. To reflect the concerns the two sentences were 
added at the end of the section. The first sentence authorizes the 
Secretary to make technical assistance grants, and the second 
authorizes an Indian tribe or tribal organization to request 
reimbursement of pre-award costs for obtaining technical assistance 
under the Act.
    One comment recommended the insertion of objective standards in 
Sec. 900.7 to measure the authenticity of a claim that technical 
assistance cannot be provided due to the availability of 
appropriations. This recommendation was not adopted because the 
provision that technical assistance be subject to the availability of 
appropriations comes directly from Section 103(d) of the Act. In 
addition, it is clear that if qualified agency personnel are available, 
technical assistance will be provided to prepare an initial contract 
proposal.
    Several comments recommended deleting the word ``must'' and 
inserting the word ``should'' in the first sentence of Sec. 900.8. This 
recommendation was not adopted because the proposal requirements in 
this subsection represent the minimum amount of information required 
for the Departments to approve a proposal.
    Several comments generally objected to Sec. 900.8 on the grounds 
that it requires the production of information that the Federal 
Government has no right to know, or that is in excess of statutory 
requirements. Although some modifications were made to Sec. 900.8 in 
response to comments, it is the consensus of the Committee that the 
information included in the final version of Sec. 900.8 is necessary to 
protect Indian tribes or tribal organizations, or because it is 
essential information required by the Departments in order to be able 
to review or decline a contract proposal, to determine whether any of 
the statutory declination criteria exist.
    A number of comments expressed concern that Sec. 900.8(d) does not 
clearly bar the Secretary from revising service area boundaries over 
the objections of tribes located in an established service area. This 
recommendation was not adopted because it is the intent of this 
provision for the applicant to define the service area. This specific 
provision was debated at length by the Negotiated Rulemaking Committee, 
and the proposed regulatory provision in Sec. 900.8(d) is the 
compromise agreed to by consensus of the Committee.
    In response to a comment, the words ``an identification'' were 
deleted from Sec. 900.8(e), and replaced with the words ``the name, 
title,'' for clarification purposes.
    In response to a comment, the words ``a description'' were deleted 
from Sec. 900.8(g)(3), and replaced with the words ``an 
identification'' for clarification purposes.
    In response to a comment, Sec. 900.8(g)(7) was amended to read 
``minimum staff qualifications proposed by the Indian tribe or tribal 
organization, if any'' for clarification purposes.
    In response to several comments objecting to the requirement in 
Sec. 900.8(g)(4) that financial, procurement, and property management 
standards be included in the proposal, reference to these standards was 
deleted from this subsection, and a new subsection (g)(8) was added to 
require a statement that the Indian tribe or tribal organization meet 
minimum procurement, property, and financial management standards set 
forth in Subpart F, subject to waivers that may have been granted under 
Subpart K.
    In response to several comments requesting that the words ``tribal 
shares'' be defined, Sec. 900.8(h)(1) was modified by removing these 
words and inserting

[[Page 32486]]

``the Indian tribe or tribal organization's share of funds.''
    In response to a comment, Sec. 900.8(h)(2) was amended by including 
the word ``start-up'' after the word ``one-time'' to make this section 
consistent with the Act.
    Several comments objected to the use of the word ``budget'' in 
Sec. 900.8(h), and to the level of detail required under this 
subsection. This subsection was redrafted to delete the word ``budget'' 
wherever it appears, and replace it with ``amount of funds requested'' 
or ``funding request.'' In addition, Secs. 900.8(h)(1) (i), (ii), and 
(iii) were deleted.
    In response to a comment that the information sought in 
Sec. 900.8(h)(5) was unnecessary, this subsection was redrafted for 
clarification purposes, and the words ``[a]t the option of the Indian 
tribe or tribal organization'' were added at the beginning of the 
subsection.
    A new subparagraph (m) was added to Sec. 900.8 to provide that in 
its contract proposal, an Indian tribe or tribal organization must 
state that it will implement procedures appropriate to the program 
being contracted to assure the confidentiality of information relating 
to the financial affairs of individual Indians obtained under a 
proposed contract, and of medical records, or as otherwise required by 
law. While tribal comments objected to the imposition of regulatory 
procedures on confidentiality of personal financial information, many 
comments were received from Indian tribes indicating a concern that the 
confidentiality of personal medical records in the hands of tribal 
contractors be preserved, notwithstanding the opinion of DHHS Office of 
General Counsel that the Privacy Act does not apply to such records. 
The provision for such an assurance with respect to personal financial 
information resulted from a compromise in the Committee between the 
Federal and tribal positions.
    In response to a comment suggesting that Indian tribes or tribal 
organizations should receive a list of Federal property used in 
carrying out programs to be contracted, a new question and answer were 
added immediately preceding Sec. 900.10. In response to a comment, this 
new section also includes a requirement that the condition of the 
property be described.
    In response to a comment, Sec. 900.11(a)(4) was modified to add the 
words ``real and personal'' before the word ``property'' for 
clarification purposes.
    Several comments requested clarification regarding whether the 
contract proposal becomes part of the contract document. In response, a 
new question and answer were added to clarify that the contract 
proposal becomes part of the final contract only by mutual agreement of 
the parties.
    Several comments suggested that Subpart C be clarified to address 
what is contractible and what is inherently Federal and thus residual. 
The Committee did not adopt the suggestion. Federal agency decisions 
regarding residual functions are subject to the appeals process.

Subpart D--Review and Approval of Contract Proposals

Summary of Regulation
    Although this topic is part of the declination process, it has been 
pulled out for separate treatment to facilitate a clearer understanding 
of the entire contracting process. In this area, the committee opted to 
have minimal regulations. This subpart details what the Secretary must 
do upon receiving a contract proposal, the time frames applicable to 
Secretarial review, how the 90-day review period can be extended, and 
what happens if a proposal is not declined within the 90-day period.
Summary of Comments
    One comment indicated that the word ``Secretary'' in this Subpart 
does not define where the proposal should actually be submitted. 
Subpart B defines the word ``Secretary'' to include either Secretary or 
their delegates. It is clear that a proposal should therefore be 
submitted to the agency with jurisdiction over the program to be 
contracted, i.e., the Bureau of Indian Affairs, the Indian Health 
Service, the Bureau of Land Management, the National Park Service, etc.
    A comment suggested amending Sec. 900.15(a) to require the 
Secretary to return any proposal lacking the required authorizing 
resolution(s) to the applicant without further action. This suggestion 
was not adopted because Sec. 900.15(b) requires that the applicant be 
notified of any missing information. It should be clear, however, that 
Section 102(a)(2) of the Act only requires the Secretary to consider a 
proposal if ``so authorized by an Indian tribe'' pursuant to the tribal 
resolution required under Section 102(a)(1) of the Act. Therefore, 
although technically outside of the enumerated declination criteria in 
Section 102(a)(2) of the Act, it is also clear that the Act precludes 
the approval of any proposal and award of any self-determination 
contract absent an authorizing tribal resolution.
    Several comments requested that the 15-day timeframe in Sec. 900.15 
be cut to 10 days. This suggestion was not adopted because 15 days are 
needed to evaluate the application. The word ``request'' was added 
before the words ``that the items'' in this subsection for 
clarification purposes, and in response to several comments.
    Several comments expressed concerns with the failure of this 
Subpart to specify what happens when a proposal is approved. The 
comments recommended addressing the award and funding of the contract. 
In response to these concerns, the question and the answer in 
Sec. 900.16 were amended to reflect that the award of the contract 
occurs upon approval of the proposal. Also, the committee added the 
words ``and add to the contract the full amount of funds pursuant to 
Sec. 106(a) of the Act'' were added at the end of Sec. 900.18. Also, a 
new section was added to explain what happens when a proposal is 
approved.
    One comment suggested adding a provision in Sec. 900.18 to provide 
that costs incurred after the 90-day period be deemed allowable costs 
under the contract and be reimbursed. This suggestion was not adopted 
because it is beyond the scope of this Subpart.
    A comment inquired whether the 90-day period continues to run if 
the Indian tribe is notified that there are missing items, or whether 
the 90-day period starts only when there is a complete proposal. The 
regulation in Sec. 900.15(b) requires the Secretary to notify the 
applicant of any missing items, and to request the applicant to furnish 
these items within 15 days. If the applicant fails to submit the 
missing items altogether, the Secretary must either approve or decline 
the proposal that was received within 90 days of receipt. Similarly, if 
the applicant submits the missing items within the 15-day deadline, the 
90-day period continues to run from the time of receipt of the original 
proposal.

Subpart E--Declination Procedures

Summary of Subpart
    This subpart implements sections 102 (a)(2), (a)(4), (b) and (d) of 
the Act. It restates the statutory grounds for declining a contract 
proposal, clarifies that a proposal cannot be declined based on any 
objection that will be overcome through the contract, and details 
procedures applicable for partial declinations. Subpart E also informs 
Indian tribes and tribal organizations of the requirements the 
Secretary must follow when a declination finding is made, contains 
provisions for technical

[[Page 32487]]

assistance to Indian tribes and tribal organizations to avoid a 
declination finding, and to overcome stated declination grounds after a 
declination finding is made.
Summary of Comments
    Several comments noted that the proposed regulations fail to 
address the continuation of mature contracts, and recommended that this 
issue be addressed. This recommendation was not adopted because there 
is no statutory authority to issue regulations on the mature contract 
process. In addition, the right to mature contracts is addressed in 
Section 105(c)(1) of the Act and in the Model Contract under Section 
108 of the Act. Continuation of any contract is also addressed in 
Sec. 900.32 of the final rule.
    One comment recommended that declination of construction contracts 
be addressed in this Subpart. This recommendation was not adopted 
because this issue is addressed in Sec. 900.123 of the final rule.
    Several comments recommended a further explanation of the criteria 
in Sec. 900.22. These comments were not adopted because it was decided 
not to interpret the declination criteria in the regulation, but to 
leave their interpretation to case-by-case adjudication.
    One comment suggested adding an applicant's failure to submit the 
single agency audit report and/or failure to correct prior audit 
deficiencies as a declination ground in Sec. 900.22. This comment was 
not adopted because there is no statutory authority to add declination 
criteria to those specified in Section 102(a)(2) of the Act.
    In response to a comment, the reference to Section 106 of the Act 
in Sec. 900.26 was replaced with a reference to Section 102(a) of the 
Act.
    There were numerous comments objecting to the document disclosure 
provisions in Sec. 900.27 of NPRM (now Sec. 900.29). In response to 
these objections, Sec. 900.27(a) was amended to delete the words ``when 
appropriate'' and replace them with the words ``within 20 days.'' In 
addition, Sec. 900.27(c) was deleted in its entirety.
    Several comments requested that the Secretary's burden of proof 
when declining a proposal in Sec. 900.297(a) be changed to ``clear and 
convincing evidence.'' This recommendation was not adopted because it 
is different from the statutory burden of proof contained in Section 
102(a)(2) of the Act.
    A comment requested that the technical assistance to be provided in 
Sec. 900.30 be clearly identified. This recommendation was not adopted 
because the type of technical assistance required will vary with each 
proposal. It is impossible to define generally the type of technical 
assistance required for all proposals.
    Pursuant to several comments, the word ``substantively'' was 
deleted from two places in Sec. 900.32, and replaced by the word 
``substantially.''
    The Committee received several comments regarding the ability of 
the BIA and other agencies of the Department of the Interior to review 
contract renewal proposals for declination issues, where the renewal 
proposal is substantially similar to the contract previously held by 
that Indian tribe or tribal organization. In the past, as a matter of 
practice, neither IHS nor the BIA has reviewed contract renewal 
proposals for declination issues. Therefore, the Departments have 
agreed that IHS and the BIA will not use the declination process in 
contract renewals where there is no material or significant change to 
the contract. However, as no past practice exists for the non-BIA 
agencies within DOI, those agencies will have discretion to use the 
declination process in appropriate contract renewal situations. The 
regulatory language of Sec. 900.32 has been amended to reflect this 
decision.

Subpart F--Standards for Tribal or Tribal Organization Management 
Systems

Summary of Subpart
    Indian self-determination contracts are unique agreements because, 
by definition, they are not procurement contracts, discretionary grants 
or cooperative agreements. This means that none of the usual 
procurement or grant regulations apply to the management of the Federal 
funds provided under these contracts. The absence of established 
guidelines presented a special challenge to the committee to develop 
standards which would assure appropriate stewardship of the Federal 
funds and other assets being transferred through these contracts. 
Deliberations on this issue led to the review of OMB Circular A-102 and 
the Uniform Administrative Requirements for Grants and Cooperative 
Agreements to State and Local Governments (the ``Common Rule''). 
Although an Indian self-determination contract is not a discretionary 
grant, the Common Rule provides certain government-to-government 
management principles that apply to discretionary Federal grants to 
states, local governments, and Indian tribes.
    The Common Rule has two-tiered management rules. On one tier, it 
generally defers to state law and regulations and accepts a state's 
management standards without imposing more detailed requirements. On 
the second tier, other local governments and Indian tribes (which vary 
greatly in size and structure) must observe the Rule's more detailed 
standards for the management of Federal grants.
    In the interest of giving greater recognition to the government-to-
government relationship which exists between Indian tribes and the 
Federal government, and to transfer greater responsibility to Indian 
tribes commensurate with their status, the committee established 
standards permitting the management of contract resources in accordance 
with tribal laws, regulations and procedures, just as the Common Rule 
permits states to manage Federal resources in accordance with state 
laws and procedures. Systems established by Indian tribes will govern 
the administration of contracts provided that they include the core 
management principles or standards adopted from the Common Rule which 
the committee determined best meet the needs of Indian tribes and 
tribal organizations.
    Subpart F contains provisions relating to the following management 
standards: (1) Financial Management; (2) Procurement Management and (3) 
Property Management. In all of these areas the advisory committee 
designed minimal regulations that focus on the minimum standards for 
the performance of the three management systems used by Indian tribes 
and tribal organizations when carrying out self-determination 
contracts.
    The standards contained in this subpart are designed to be the 
targets which the Indian tribe and tribal organization's management 
systems should be designed and implemented to meet. The management 
systems themselves are to be designed by the Indian tribe or tribal 
organization.
    Section 900.36 contains general provisions which apply to all 
management system standards contained in this subpart. Subpart F 
includes provisions that: (1) Identify the management systems that are 
addressed; (2) set forth the requirements imposed; (3) limit the 
applicability of OMB circulars; (4) provide that the Indian tribe or 
tribal organization has the option to impose these standards upon 
subcontractors; (5) identify the difference between a standard and a 
system; and (6) specify when the management standards and management 
systems are evaluated.
    Section Sec. 900.44 contains the standards for financial management

[[Page 32488]]

systems. Subpart F establishes the minimum requirements for seven 
elements including: (1) Financial reports; (2) accounting records; (3) 
internal control; (4) budget control; (5) allowable costs; (6) source 
documentation; and (7) cash management.
    Section 900.47 contains standards for procurement management 
systems. This subpart establishes the minimum requirements for seven 
elements: (1) To ensure that vendors and subcontractors perform in 
accordance with the terms of purchase orders or contracts; (2) to 
require the Indian tribe or tribal organization to maintain standards 
of conduct for employees award contracts to avoid any conflict of 
interest; (3) to review proposed procurements to avoid buying 
unnecessary or duplicative items; (4) to provide full and open 
competition, to the extent feasible in the local area, subject to the 
Indian preference and tribal preference provisions of the Act; (5) to 
ensure that procurement awards are made only to entities that have the 
ability to perform consistent with the terms of the award; (6) to 
maintain records on significant history of all major procurements; and 
(7) to establish that the Indian tribe or tribal organization is solely 
responsible for processing and settling all contractual and 
administrative issues arising out of a procurement. In addition, the 
regulation provides that each Indian tribe or tribal organization must 
establish its own small purchase threshold and definition of ``major 
procurement transactions''; establish minimum requirements for 
subcontract terms, and include a provision in its subcontracts that 
addresses the application of Federal laws, regulations and executive 
orders to subcontractors.
    Section 900.51 contains the minimum requirements for property 
management systems. Subpart F addresses the standards for both 
Federally-titled property and property titled to an Indian tribe or 
tribal organization, with differences based upon who possesses title to 
the property. As a general rule the requirements for property where the 
Federal agency retains title are higher than requirements for property 
where the Indian tribe or tribal organization holds the title. Subpart 
F addresses elements including: (1) Property inventories; (2) 
maintenance of property; (3) differences in inventory and control 
requirements for property where the Federal agency retains title to the 
property; and (4) the disposal requirements for Federal property.
Summary of Comments
    A comment requested that the rule clarify the application of Office 
of Management & Budget (OMB) Circulars or portions of OMB Circulars 
that apply to the operation of Indian Self-Determination Act contracts.
    Section 900.37 specifies that the only OMB Circulars that apply to 
self-determination contracts are those (1) Incorporated the by Act, 
such as OMB Circular A-128, ``Audits of States and Local Governments''; 
(2) adopted by these regulations; or (3) agreed to by the Indian tribe 
or tribal organization pursuant to negotiations with the Secretary. In 
regard to these regulations, Sec. 900.45(e) identifies the appropriate 
OMB Circular Cost Principles that should be used in determining the 
propriety of contract costs.
    One comment asked the Committee to delete Sec. 900.40(a) because it 
is overreaching and exceeds statutory requirements. This section was a 
fundamental underpinning of the entire Subpart. The negotiators agreed 
that the regulations would include standards, to be treated as minimum 
requirements, for the administration of contracts. For an initial 
contract proposal only, Federal officials may review the standards 
proposed by the Indian tribe or tribal organization, to determine that 
they meet or exceed these minimum regulatory requirements. Indian 
tribes or tribal organizations are responsible for the implementation 
of administrative systems that meet the standards and that are subject 
to review in accordance with the Single Agency Audit requirements as 
provided in Section 5(f) of the Act. In many respects, this dichotomy 
between the standards and systems was designed to acknowledge the 
unique and special nature of self-determination contacts (non-
procurement intergovernmental agreements) and a shift in the regulatory 
emphasis from the unnecessary and burdensome review of systems to an 
emphasis on the acceptance of fundamental guiding management 
principles. This approach is consistent with provisions in the Act at 
Sections 5(b), 102(a)(2), 105 (a)(1) (2) and (3) and 107(a)(1) and in 
the Model Contract Section 108(b)(7)(c). For these reasons no change 
was made in Sec. 900.40.
    It was suggested that the Committee delete the words ``or tribal 
organization'' in Sec. 900.42 from both the question and the answer as 
this section applies only to Indian tribes. The comment was correct and 
the words have been deleted.
    The Committee was requested to clarify the period of time that 
Indian tribes and tribal organizations must retain records of contract 
operations. A new Sec. 900.41 was created to address these issues. That 
section specifies that Indian tribes and tribal organizations should 
keep: (1) Financial records for three years from the date of the single 
audit submission; (2) procurement records for three years from the date 
of final payment to the supplier; and (3) property management records 
for three years from the date of disposition, replacement or transfer 
of the property. In addition, records related to litigation, audit 
exceptions and claims should be retained until the action is completed.
    One comment suggested that the regulation provide for the Secretary 
to obtain consistent and timely financial information to respond to 
Congressional inquiries and to otherwise support budget justifications. 
Section 900.45(a) was amended by adding a provision that provides for 
the submission of a Financial Status Report, SF 269A. The frequency of 
submission of the SF 269A remains the subject of negotiation between 
the Indian tribe or tribal organization and the Secretary. The 
Department expect that the frequency will not be less than once per 
year. This change only affects how the information is transmitted to 
the government and is consistent with Section 5(f)(2) of the Act.
    The committee was asked to specify which of the three Office of 
Management and Budget Circulars dealing with cost principles apply to a 
tribal organization. In that regard, a tribal organization could be a 
chartered entity of a tribe, a non-profit organization, and/or an 
educational institution.
    Section 900.45(e) has been amended by revising the parenthetical 
statement and including a chart to clarify the application of the 
Office of Management & Budget circulars. The parenthetical statement 
makes clear that which circular is applicable is negotiable with the 
Secretary and that current agreements concerning Office of Management & 
Budget cost principles need not be renegotiated.
    The committee was asked to adopt proposed clarifying language for 
Subsection 900.45(g). The regulations were amended to adopt the 
suggested language that provides a more accurate description of the 
standards for a cash management component of financial management 
systems.
    One comment suggested adding the following new language to 
Sec. 900.45(h):

    If an Indian tribe or tribal organization contracts to assume a 
program, service, function, or activity which includes a physical 
trust asset or natural resource, the

[[Page 32489]]

Indian tribe or tribal organization shall enter upon its financial 
management system and provide for an accurate, current, and complete 
disclosure of the value of those assets, provide for an accurate, 
current and complete disclosure of funds by source and application 
utilized to keep the physical trust assets or natural resources in 
good repair and maintenance; provide for an accurate, current, and 
complete disclosure of any increase or decrease in the valuation of 
the asset; and provide for an accurate, current and complete 
disclosure of any other costs, function or activity which would 
improve, increase, or cause devaluation or decrease in the value of 
the physical trust asset or natural resource as would be required to 
account for any asset using generally accepted accounting principles 
and standards.

    The Committee did not include this provision principally because it 
is beyond the scope of these regulations. Currently, the United States 
does not track the values of natural resources (i.e. national parks or 
Indian lands) in this fashion. Therefore, no financial basis exists to 
begin the process. The cost of establishing the basis would undermine 
and frustrate self-determination contracting. While the proposal has 
merits, it would not be possible to implement it effectively until 
appropriate guidance is issued on valuation of Federal natural 
resources, the United States enters the information in its financial 
records, and funds are made available to tribal governments to cover 
the cost of implementation. In regard to guidance, the Federal 
Accounting Standards Advisory Board has not issued any authoritative 
instructions on the valuation of Federal natural resources. This matter 
is currently under consideration by the Board.
    Another comment asked the Committee to revise Sec. 900.46 to 
require the Secretary to be held to a ``strict standard of compliance 
with the terms of the contract and the annual funding agreement.'' 
Further, the comment suggested deleting the words ``In regard to 
paragraph (g) of Sec. 900.44 [of the NPRM]'' and ``based upon the 
payment schedule provided for in.'' The Committee was asked to add ``in 
strict compliance with'' for the last phrase deleted. Section 900.46 
was amended to make this section of the regulations consistent with the 
statute.
    A comment recommended that Sec. 900.48(c) be amended to include 
provisions requiring ``cost and price analysis'' in the procurement 
standards. Subsection Sec. 900.48(c) was amended by adding the phrase 
``and ensure the reasonableness of the price'' at the end of the 
subsection. This was done to ensure that cost or price analysis be 
considered in all procurements, but to avoid the application of a full 
Federal procurement-type cost or price analysis since self-
determination contracts are not subject to the Federal Acquisition 
Regulations (FARs). It is the responsibility of the Indian tribe or 
tribal organization to design a procurement system based upon the 
standards in Subpart F. The amendment will require those systems to 
consider the ``reasonableness of price'' when making procurement 
purchases.
    The Committee was asked to clarify Sec. 900.50, including the 
provision of further guidance about the application of tribal law 
generally and the application of Tribal Employment Rights Ordinances 
(TERO) specifically. Sec. 900.50 was substantially revised, to make 
clear that subcontracts by an Indian tribe or tribal organization may 
require the subcontractor to comply with certain provisions of the Act 
and other Federal laws. The new language informs subcontractors that 
they are responsible for identifying and complying with applicable 
Federal laws and regulations. The section was further amended to 
provide that, to the extent the Secretary and the Indian tribe or 
tribal organization identify and specify laws and regulations that are 
applicable to subcontracts in the negotiation of the self- 
determination contract, those identified and specified provisions will 
then be included in subcontracts.
    These regulations do not specifically address the application of 
tribal law, but establish minimum standards for the operations of 
management systems. Indian tribes may exercise discretion and create 
higher standards by operation or enactment of tribal law. Similarly, an 
Indian tribe may seek a waiver of a standard as noted in Sec. 900.36 of 
the regulations. Nothing in the regulations is designed to supersede or 
suspend the operation of tribal law that meets these standards. Further 
nothing in the regulations affects the operation of tribal law to 
activities not paid for by self-determination contract funds.
    Sections 7(b) and (c) of the Act authorize the application of 
Indian Preference and Tribal Preference (TERO) in the performance of a 
self-determination contract. To the extent a TERO ordinance is 
consistent with the terms of Section 7(b) and (c) of the Act it can be 
made applicable to procurement subcontracts.

Property Management

    The Committee was asked to define ``sensitive property'' in 
Sec. 900.52, and as a result, a definition of ``sensitive personal 
property'' was inserted at Sec. 900.52(b). That definition includes all 
firearms and provides that the Indian tribes and tribal organization 
are to define such other personal property ``that is subject to theft 
and pilferage.'' Since the activities vary from contract to contract to 
such a large extent, the committee decided that a locally-created 
definition best meets the needs of all contractors.
    One comment indicated Sec. 900.60(b) might require revision 
regarding the authority of an Indian tribe or tribal organization to 
dispose of Federal property. The Committee revised subsection (b) of 
Sec. 900.60 by deleting all of subsection (1), that previously allowed 
for disposal if the Secretary failed to respond to a disposal request. 
As a result, if the Secretary fails to respond to a request from an 
Indian tribe or tribal organization within the sixty day period, the 
Indian tribe or tribal organization may return the Federal property to 
the Secretary. The Secretary is required to accept the property and is 
required to reimburse the contractor for all costs associated with the 
transfer. This ensures that Indian tribes and tribal organizations have 
a process to dispose of unneeded Federal property, and the 
reimbursement of transfer costs should provide the Secretary with an 
incentive to respond in a timely fashion to disposal requests.
    The committee was asked to clarify that the property disposal 
procedures in Sec. 900.60 only apply to personal property, because the 
answer to the question uses the terms ``personal property'' and 
``property.'' Using the term ``property'' which, by definition, 
includes both real and personal property, creates ambiguity about 
application of the paragraph to the disposal of real property.
    Section 900.60 only applies to the disposal of personal property. 
The matter has been clarified through editorial revision of the 
introductory question, to read as follows: ``How does an Indian tribe 
or tribal organization dispose of Federal personal property?''

Subpart G--Programmatic Reports and Data Requirements

Summary of Subpart
    This brief subpart provides for the negotiation of all reporting 
and data requirements between the Indian tribe or tribal organization 
and the Secretary. Failure to reach an agreement on specific reporting 
and data requirements is subject to the declination process. Although 
the Indian Health Service proposes to develop a uniform data set, that 
data set will only be used as a guide for negotiation of specific 
requirements.

[[Page 32490]]

Summary of Comments
    One comment argued for the revision of Sec. 900.65, that provides 
for the submission of programmatic reports and data ``to meet the needs 
of the contracting parties.'' The comment was concerned that the 
section could be used to force Federal minimum reporting requirements 
upon Indian tribes and tribal organizations despite the provision in 
Section 5(f) of the Act that make reporting the subject of 
negotiations.
    Section 900.65 has been amended to address the comment. A new 
introductory sentence was added that makes clear that unless there is a 
statutory requirement, these regulations create no mandatory reporting 
requirements. The negotiation of reporting is to be responsive to the 
needs of the parties and appropriate for the purpose of the contract. 
This provides the Indian tribe or tribal organization, as well as the 
Secretary, with guidance and limits for negotiations. Furthermore, 
because of the numerous comments made concerning the Sec. 900.65 
provision, ``meet the needs of the contracting parties,'' and the 
amendment noted above, Sec. 900.67 was also amended to make it 
consistent with Sec. 900.65 by substituting, ``which responds to the 
needs of the contracting parties,'' for ``meets the needs of the 
contracting parties''.
    The Committee was asked to clarify grammar in Sec. 900.68. The 
Committee concluded that the word ``for'' was inadvertently included in 
the first line of Sec. 900.68. The ``for'' has been and a comma added 
between ``set'' and ``applicable'' in the first line. This should 
eliminate the confusion.

Subpart H--Lease of Tribally-Owned Buildings by the Secretary

Summary of Subpart
    Section 105(l) of the Act authorizes the Secretary to lease 
tribally-owned or tribally-leased facilities and allows for the 
definition of ``other reasonable expenses'' to be determined by 
regulation. This subpart provides a non-exclusive list of cost elements 
that may be included as allowable costs under a lease between the 
Indian tribe or tribal organization and the Secretary. It further 
clarifies that except for ``fair market rental,'' the same types of 
costs may be recovered as direct or indirect charges under a self-
determination contract.
    The Subpart was substantially revised based upon comments received 
following the NPRM. Please note that two sections have been added, and 
previous Sec. 900.71 and Sec. 900.72 have now become Sec. 900.73 and 
Sec. 900.74 respectively.
Summary of Comments
    Comments requested that the Committee specify the type of account 
and the guardian of the account for a reserve for replacement of 
facilities identified in Sec. 900.70(c).
    The final regulation adds two new sections to accomplish this. New 
Sec. 900.71 was added to set forth the type of account as a ``special 
revenue fund'' or a ``capital project fund.'' New Sec. 900.72 was also 
added to provide that the Indian tribe or tribal organization is the 
guardian of the fund. It permits fund investments in a manner 
consistent with the laws, regulations and policies of the Indian tribe 
or tribal organization, subject to lease terms and the self-
determination contract.
    The Committee was asked to add landscaping costs to those items of 
cost included in Sec. 900.70(e)(1-16). No such addition was made as the 
Committee believed that such costs were included in either subsection 
(8) or subsection (16) of Sec. 900.70(e).
    Likewise, another comment suggested adding profit to those matters 
listed in Sec. 900.70(e). In the Committee's view, a lease based upon 
fair market value provides for the recovery of profit, adjusted as 
appropriate, based upon the Federal Share (if any) of acquisition or 
construction. Therefore, no change was made to this provision.
    The committee was asked to identify the source of funds for these 
lease payments. The source of funds is a subject of negotiation between 
the parties to a self-determination contract.

Subpart I--Property Donation Procedures

Summary of Subpart
    This subpart establishes procedures to implement section 105(f) of 
the Act. Section 900.85 provides a statement of the purpose of the 
subpart and explains that while the Secretary has discretion in the 
donation of excess and surplus property, ``maximum'' consideration must 
be given to an Indian tribe or tribal organization's request.
    This subpart also contains a provision for the Secretary to elect 
to reacquire property under specific conditions. It clarifies that 
certain property is eligible for operation and maintenance funding, as 
well as for replacement funding on the same basis as if title to the 
property were held by the United States.
    Section 900.87 provides for the transfer of property used in 
connection with a self-determination contract. It provides slightly 
different procedures for personal property versus real property 
furnished before the effective date of the 1994 amendments and another 
procedure for property furnished after the enactment of the 1994 
amendments.
    Sections 900.91 and 900.92 address Sec. 105(f)(2)(A) of the Act, 
which provides that a tribal contractor automatically takes title to 
property acquired with contract funds unless an election is made not to 
do so. It also addresses the process for requesting that real property 
be placed ``in trust.''
    Section 900.97 addresses BIA and IHS excess property donation while 
Sec. 900.102 addresses excess or surplus property from other Agencies.
Summary of Comments
    The committee was asked to clarify this Subpart as it is confusing 
and generally repetitive. The Subpart addresses the methodology that 
provides property to Indian tribes and tribal organizations pursuant to 
the Indian Self-Determination Act. Because there are several classes of 
property, with varying rights and mechanisms, the Subpart must address 
each separately. In order to reduce confusion, the final regulations 
provide more uniformity depending on the property type.
    It was suggested that the Committee restore the language that was 
initially adopted by the Committee, but not included, in Sec. 900.86. 
The language change in the NPRM accommodates the use of ``plain 
English'' and was not intended to change the manner in which the 
Secretary exercised discretion. The Committee has reinstated the 
originally-approved version by striking the words ``give maximum 
weight'' and substituting ``exercise discretion in a way that gives 
maximum effect'' following the word ``will'' in the first line of the 
answer in Sec. 900.86. A similar amendment can be found at 
Sec. 900.97(a).
    To ensure clarity, several comments requested that the regulation 
specify as to whether property is real property or personal property in 
given instances. The Committee has used the word ``property'' in these 
regulations to mean both real and personal property except where not 
applicable to one or the other type of property. If either the words 
``real'' or ``personal'' modify ``property'' that provision is limited 
to that type of property.
    The committee was asked to change the incorrect reference to 41 CFR 
101-47, 202.2(b)(10) in Secs. 900.87 (b)(2) and (c)(2). The miscitation 
has been corrected.
    In addition, the committee was asked to delete the terms ``justify 
and certify''

[[Page 32491]]

in Sec. 900.86 as well as Sec. 900.97 and Sec. 900.104 because these 
terms frustrate the statutory intent and limit access to property 
needed to carry out self-determination contracts. The Committee amended 
the above-noted sections and substituted ``state how'' or ``statement 
of how'' for the ``justify and certify'' provision. This was done to 
make clear that what is needed is a concise, simple statement of how 
the subject property is ``appropriate for use for a purpose of which a 
self-determination contract is authorized under the Act,'' the 
statutory language. The Committee expects that the deletion of the 
terms ``justify or certify'' makes it clear that no detailed submission 
will be required by the Secretary or his designee.
    Comments requested revision in the process described in Sec. 900.87 
pertaining to property that was made available before or after October 
25, 1994. The Committee has chosen not to make changes, as the October 
25, 1994 date is the result of the 1994 Amendments to the Act. That 
date is the effective date of Public Law 103-413. Those amendments 
provided at Section 105 of the Act that Indian tribes or tribal 
organizations could take title to government-furnished property used in 
performance of the contract property unless the Indian tribe or tribal 
organization preferred the Secretary to retain title. Prior to October 
25, 1994, title to such property remained with the Secretary.
    This provision allows an Indian tribe or tribal organization to 
receive title to government-furnished property put in use prior to 
October 25, 1994. In part, that allows Indian tribes or tribal 
organizations greater flexibility with the Property Management 
standards in Subpart F above. For these, reasons no further changes 
were made in Sec. 900.87.
    One comment suggested that the regulation clarify the references to 
the value of property subject to reacquisition or acquisition by the 
Secretary at the time of retrocession, reassumption, termination or 
expiration of the contract. Among the concerns expressed were the value 
at the time of reacquisition, whether it was acquisition or 
reacquisition, the lack of consideration of depreciation, and the use 
of property by multiple contracts when only one or a portion of one 
contract triggers this issue. These comments relate to Sections 900.89, 
900.93, and 900.100, all of which address this issue depending upon the 
class of property.
    The Committee took action to make uniform sections 900.89, 900.93, 
and 900.100. These new sections all contain an additional subsection 
that addresses the issue of property used in multiple contracts. This 
new subsection provides that the Secretary and contractor shall 
negotiate an ``acceptable arrangement'' for continued sharing and the 
title to the property.
    In order to address current value (at the time of retrocession, 
etc.) the section was revised to ``current fair market'' and another 
clause was added, ``less the cost of improvements borne by the Indian 
tribe or tribal organization.'' This was done so that where an Indian 
tribe or tribal organization has made improvements to a piece of 
property, the value of the improvements is factored into arriving at 
the $5,000 value threshold. The Committee also reviewed the 
depreciation questions but concluded that the current fair market value 
approach would adequately take these factors into consideration. 
Moreover, since services would be provided to Indian beneficiaries by 
the Secretary, the best approach with the reacquired property was 
current fair market value.
    In regard to Sec. 900.93, one comment proposed a change to the 
question by substituting ``reacquire'' for ``acquire.'' Upon review the 
Committee concluded that ``acquire'' was the correct term because this 
section addresses contractor-purchased property. In that instance, the 
Secretary has never had title and ``acquire'' is the proper term.
    The revisions to the above-noted sections have also been 
incorporated into Subpart P of the regulations. No further comments 
will be discussed in this preamble on Sections 900.89, 900.93, or 
900.100 since the operative provisions are now uniform.
    With regard to Sections 900.96 and 900.103, several comments asked 
when the Secretary will notify Indian tribes and tribal organizations 
about the availability of excess BIA and IHS personal property and GSA 
excess and surplus property. Suggestions of quarterly or semi-annually 
were made. At both Sec. 900.96 and Sec. 900.103 the term ``not less 
than annually'' has been added. This creates a minimum requirement that 
the Secretary must meet yet allows for more frequent notices.
    Some comments asked the Committee to provide further instruction in 
Sec. 900.97(b) relating to multiple requests by contractors the same 
excess or surplus property.
    The Committee revised these subsections to clarify what will occur 
in that situation. In regard to personal property, the request first 
received by the Secretary will have precedence. If the requests are 
received by the Secretary on the same date, the requestor with the 
lowest transportation costs will prevail.
    A technical amendment was made to Sec. 900.97(c) by changing 
``piece of real property'' to ``parcel of real property.''
    The committee was asked to delete the reference to the Federal 
Property Management Regulation, 41 CFR Chapter 101, as that reference 
had at Sec. 900.104(b) the potential to incorporate an entirely 
different set of regulations, not consistent with the Act. The 
references to the Federal Property Management Regulation (FPMR) and 41 
CFR Chapter 101 were deleted and ``Section 900.86 of this Subpart'' was 
substituted. The Committee made this revision to reflect that these 
regulations are unique to self-determination contracts and to avoid any 
conflict between these regulations and the FPMR.
    Several comments were made concerning the need for the Secretary to 
act expeditiously to acquire excess or surplus government property when 
the property is frozen by the Indian tribe or tribal organization, in 
Sec. 900.104(c). The Committee revised subsection (c) of Sec. 900.104 
by harmonizing the several suggestions.
    Several comments called for clarification of Sec. 900.107 by 
explaining which type of property remains eligible for replacement 
funding. The Committee changed the question in Sec. 900.107 and deleted 
``Yes'' from the answer. This makes clear that government-furnished 
property, contractor-purchased property and excess BIA and IHS property 
are eligible for replacement funding consistent with Section 105(f) of 
the Act. Only excess or surplus government property from other agencies 
is not eligible for such replacement.

Subpart J--Construction Contracts

Summary of Subpart
    Subpart J addresses the process by which an Indian tribe or tribal 
organization may contract for construction activities or portions 
thereof. The subpart is written to inform readers of the breadth and 
scope of construction contracting activities conducted by the 
Departments, and provides opportunities for Indian tribes or tribal 
organizations to choose the degree to which they wish to participate in 
those activities. The subpart provides for extensive cooperation and 
sharing of information between the Departments and an Indian tribe or 
tribal organization throughout the construction process. The subpart 
provides for different construction contracting methods, such as award 
of

[[Page 32492]]

contracts through subpart J, award of contracts through section 108 of 
the Act, and award of grants in lieu of contracts depending on the 
degree of Federal involvement and the phase(s) of construction 
activities for which the Indian tribe or tribal organization seeks to 
contract.
    The construction process is described in phases, starting with a 
preplanning phase, followed by a planning phase, a design phase, and a 
construction phase. Provisions are included so an Indian tribe or 
tribal organization can seek a contract through section 108 of the Act 
for the planning phase and for construction management services. It is 
not required that these functions be pursued through a section 108 
contract: if the Indian tribe or tribal organization so elects, these 
activities can be part of a subpart J contract.
    Definitions are provided that are specific to this subpart and this 
subpart establishes new procedures to facilitate tribal contracting, 
through such measures as tribal notification and other provisions.
    The subpart promotes the exploration of alternative contracting 
methods, and eliminates the applicability of the Federal acquisition 
regulations except as may be mutually agreed to by the parties.
    The subpart describes the process for negotiating a construction 
contract, including the process for arriving at a fair and reasonable 
price, and details the process for resolving disagreements in the 
contracting process. The subpart also sets forth minimum requirements 
for contract proposals, and details the respective roles of tribes and 
the Secretary.
    The subpart promotes tribal flexibility in several areas, including 
through periodic payments at least quarterly, and the payment of 
contingency funds to be administered by the tribal contractor.
Summary of Comments
    Approximately 185 comments were received from non-governmental 
representatives, most of these from Nations and tribes rather than 
individuals. This preamble reflects the committee response to each 
comment in a section-by-section format. References to no action being 
taken by the Committee indicate that no change was made to the 
regulation.
    Several comments proposed that the phrase ``or real property'' be 
added after ``Federal facilities.'' The comments were adopted to ensure 
that related construction work was covered under Subpart J. The new 
phrase adds ``and/or other related work'' after ``demolition.''
    Eight comments argued that supportive administrative functions 
should be specifically recognized as contractible in the language of 
Sec. 900.111. The Committee decided that the language was adequate as 
published. One comment proposed adding ``or tribal organization 
authorized'' after ``tribe.'' This comment was adopted.
    One comment proposed to add a bid award phase. The comment was not 
adopted because it is presently included in the individual phases 
described in the regulation. Three comments stated that tribal 
involvement was not included in the site selection process. Site 
selection was adopted and inserted into subsection 900.112(a)(2) and 
(3). One comment proposed to add ``assessment and'' after ``initial'' 
at Sec. 900.112(a)(1) and ``associated activities'' after 
``assessments'' at Sec. 900.112(b)(2). Both comments were adopted.
    Several comments stated that Sec. 900.113(b) implies that Indian 
tribes and tribal organizations will always subcontract with a 
consultant rather than using tribal employees to perform certain 
functions. This was not the intent of the proposed regulation. The 
Committee adopted the proposed language: ``An Indian tribe or tribal 
organization's employee or construction management services consultant 
(typically an engineer or architect) performs such activities as:'' and 
struck ``The construction management services consultant (typically an 
engineer or architect) assists and advises the Indian tribe or tribal 
organizations in such activities as.''
    Five comments suggested that the phrase ``and real property'' 
should be included at Sec. 900.113(c) after ``Buildings and 
Facilities.'' The committee took no action on these comments.
    Three comments stated that the critical distinction between 
construction contracts and section 108 model agreements are the 
requirements which apply to each. The committee took no action on this 
comment.
    One comment stated that Sec. 900.115(b)(1) should be clarified to 
indicate that the term ``Act'' refers to the Office of Federal 
Procurement Policy Act. The comment was adopted and the work ``such'' 
was deleted and the word ``that'' was inserted.
    Nine comments suggested that cost reimbursement contracts should 
also allocate the risk. The Committee took no action. One comment 
suggested replacing ``fixed-price'' with ``negotiated.'' The Committee 
adopted ``negotiated'' and inserted it before ``fixed-price'' in both 
the question and response.
    Two comments stated that subsection 900.117(a)(2) treats the 
consequences of the Secretary's failure to act in a way that is very 
unfavorable to Indian tribes and, therefore, against the policy of the 
Self-Determination Act. The comments argued that the Secretary's 
failure to act should render the POR accepted rather than rejected. The 
Committee did not agree on this change. Three comments stated that this 
section should contain standards or other objective criteria against 
which the POR will be reviewed. The Committee concluded that these 
criteria will be negotiated between the parties and identified in the 
contract. One comment suggested revising the timeframes contained in 
the subsection to accommodate a shorter construction period due to 
weather concerns. The Committee decided to add a subsection at the end 
of Subpart J to address this issue.
    Seven comments argued that construction management services may be 
performed by tribal employees. The Committee adopted the language 
``and/or tribal or tribal organization employees'' after 
``consultants.''
    The Committee received two comments on subsection 900.120. The 
first urged that the 30-day time period be reduced to 14 days. The 
Committee did not agree with this change. The second comment 
recommended inserting the word ``shall'' in place of ``will'' and 
inserting ``By registered mail with return receipt in order to document 
mailing after notify.'' This language was adopted.
    The Committee received eight comments on subsection 900.121 of the 
NPRM. Six suggested inserting the word ``each'' before the word 
``phase,'' requiring the Secretary to notify Indian tribes and tribal 
organizations before each phase. One comment proposed adding the 
following language: ``Failure of the tribe or tribal organization to 
notify the Secretary within 45 days after receiving Secretarial notice 
described in Sec. 900.120 shall not serve as a bar to the applicant 
tribe or tribal organization from contracting for the desired 
project.'' Although the proposed language accurately reflects a 
Comptroller General's Opinion, the Committee did not agree to this 
addition. To resolve the impasse, the Committee struck subsection 
900.121 in its entirety.
    Eight comments suggested adding language to Sec. 900.121 to clarify 
who will be solicited and how. The committee took no action on these 
suggestions.
    Three comments stated that section 105(m) of the Act establishes a

[[Page 32493]]

negotiation process to be invoked at the tribes' option, and section 
105(m) language should be reflected in subsection 900.122 rather than 
imposing a mandatory process that may not be applicable in all 
situations. The regulation will be interpreted consistently with the 
applicable statutory provisions. The reference ``in accordance with 
section 900.121(a)'' was stricken since Sec. 900.121 was in its 
entirety. One comment suggested changing ``will'' to ``shall'' after 
``Secretary'' in Sec. 900.122(a). This change was adopted.
    Eight comments stated that the language of this section should be 
changed to mirror the requirements found at Sec. 900.29. The Committee 
took no action on these comments. One comment suggested adding ``and 
provide all documents relied on in making the declination decision'' at 
Sec. 900.123(b)(1) after the words ``in writing.'' The Committee agreed 
to this language with the addition after the word ``decision'' of 
``within 20 days of such decision.'' The Committee did not agree to the 
proposed addition of subsection 900.124(b)(1)(I): ``The Secretary shall 
be barred from relying on any and all such documents which are not 
provided in any defense of this declination decision.'' The regulation 
therefore does not address what the Secretary may or may not rely upon, 
leaving such matters for decision by administrative bodies or the 
courts.
    Three comments on Sec. 900.124 stated that the requirements for 
grants are not clear. The Committee took no action.
    Five comments raised the issue of the applicability of the Contract 
Work Hours Act. The Committee agreed that the applicability of the 
Contract Work Hours Act and other laws is adequately addressed in 
Sec. 900.125(d). Accordingly, the reference to the Contract Work Hours 
Act at Sec. 900.125(c)(4) was deleted.
    One comment stated that Sec. 900.125(c)(1) requires the contract to 
state that the tribal contractor will not alter title to real property 
``without permission and instructions from the awarding Agency'' and 
is, therefore, inconsistent with section 105(f) of the Act, which 
states that title to property furnished by the Federal government for a 
contracted program ``shall, unless otherwise requested by the tribe or 
tribal organization, vest in the appropriate tribe or tribal 
organization.'' The Committee adopted ``elects not to take title 
(pursuant to Subpart I) to Federal property used in carrying out the 
contract'' at Sec. 900.125(c)(1) after the word ``organization.'' The 
Committee also struck the language ``proposes to use Federal property 
in carrying out the contract.''
    One comment stated that ``engineers'' should be deleted at 
Sec. 900.126(a)(1) and Sec. 900.130(c)(1) because the Act does not 
require the use of licensed engineers, only architects. The comment was 
adopted and the word ``engineers'' was deleted from those sections.
    One comment suggested that Sec. 900.125(a)(8) be expanded to 
include the following language after the word ``manuals'': ``and the 
Secretary shall accept tribal proposals for alternatives which are 
consistent with or exceed Federal guidelines or manuals applicable to 
construction programs.'' The Committee adopted this language.
    One comment stated that Sec. 900.125(b)(8) was overreaching and 
required production of information that the Federal government had no 
legitimate need to know. The Committee compromised by agreeing to 
strike the language as written and to substitute the following: ``(8) 
Identify if the tribe or tribal organization has a CMS contract related 
to this project,'' and added after the word ``section'' at 
Sec. 900.125(b)(4) ``and minimum staff qualifications proposed by the 
tribe or tribal organization, if any.''
    One comment proposed adding language at Sec. 900.125(d) which would 
include tribal laws, ordinances and resolutions. The Committee agreed 
and added the sentence ``The parties will make a good faith effort to 
identify tribal laws, ordinances and resolutions which may affect 
either party in the performance of the contract.''
    Three comments questioned the applicability of Sec. 900.126 to cost 
reimbursement, fixed-price and non- construction contract construction 
activities. The Committee took no action.
    Ten comments proposed changes to the provision on contingency 
funds. Four suggested the following language: ``the amount of the 
contingency provided shall be 10 percent of the contingency funds, 
whichever is greater.'' Two comments proposed that 100 percent of the 
available contingency should be open for negotiation and one comment 
advocated that 100 percent of the available contingency should be 
included in the contract. The comments proposed alternative language: 
``* * * allow all of the contingency funds to be transferred to the 
tribe unless the government could show proof as to why such funds 
should not be transferred.'' The Committee compromised on the following 
language: ``The amount of the contingency provided shall be 3 percent 
of activities being contracted or 50 percent of the available 
contingency funds, whichever is greater.'' Additionally, the following 
sentence was added to address concerns regarding funding: ``In the 
event provision of required contingency funds will cause the project to 
exceed available project funds, the discrepancy shall be reconciled in 
accordance with Sec. 900.129(e).''
    One comment objected to the term ``contract budget,'' and urged the 
language be changed to ``funding proposal.'' The Committee took no 
action, and noted that the present language was written to accommodate 
redistribution of funds within the budget.
    One comment stated that the ``fair and reasonable'' language at 
Sec. 900.127(a) ``gives too much discretion to government officials to 
determine what is fair and reasonable.'' The Committee adopted the 
reference to Sec. 900.129 at the end of Sec. 900.127(a).
    Three comments raised the question of the applicability of 
Sec. 900.128 to cost reimbursement, fixed-price, and non-construction 
contract construction activities. The Committee took no action on this 
concern, but to clarify changes made at Sec. 900.127(e)(8), the 
following language at Sec. 900.128(d)(3): ``including but not limited 
to contingency.''
    Seven comments stated that Sec. 900.129(e)(1) should be amended to 
reflect that only the amount in excess of the available amount may be 
declined. The Committee decided not to make the recommended change, but 
did adopt the following language after the word ``Act'' at 
Sec. 900.129(e)(1): ``or, if the contract has been awarded, dispute the 
matter under the Contract Disputes Act.''
    One comment urged that Sec. 900.129(e)(2)(i) ``should be modified 
to expressly authorize the parties to jointly agree on a lump-sum 
advance payment to generate earned interest, in order to bridge the gap 
between a fair and reasonable price and the amount available to the 
Secretary.'' The Committee added the phrase ``advance payments in 
accordance with section 900.132'' at Sec. 900.129(e)(2)(i) after 
``contingency funds.''
    Three comments raised the applicability of Sec. 900.129 to cost 
reimbursement, fixed-price, and non- construction contract construction 
activities. The Committee took no action.
    Five comments stated that architect and engineer services were 
appropriate at the design phase (Sec. 900.130(b)(1)) but not required 
at the construction phase and should be deleted. One comment addressed 
the language requiring licensed engineers at Secs. 900.130(b)(1) and 
(c)(1). The Committee struck ``and

[[Page 32494]]

engineers'' in both places, and inserted the word ``as'' before 
``needed.''
    Three comments stated that language at Sec. 900.130(c)(5) should be 
changed to read: ``The tribe or tribal organization may not issue a 
change order which is outside the general scope of work defined in the 
contract or which exceeds the contract budget including contingency 
funds without Secretarial approval.'' The Committee took no action.
    One comment argued that the timing of the independent cost estimate 
should be clarified to facilitate negotiations. The Committee took no 
action.
    Three comments raised the applicability of Sec. 900.130 to cost-
reimbursement, fixed-price and non- construction contract construction 
activities. The Committee took no action.
    One comment proposed that Sec. 900.130(b)(5) should delete the 
Secretarial approval and substitute ``review and provide written 
comments.'' In compromise, the Committee adopted language which allows 
for Secretarial review and written comments on the project plans and 
specifications only at the concept phase, the schematic (or preliminary 
design) phase, the design development phase, and the final construction 
documents phase, and Secretarial approval of the project plans and 
specifications for general compliance with contract requirements only 
at the schematic (or preliminary design) phase and the final 
construction documents phase, or as otherwise negotiated.
    One comment proposed replacing the word ``shall'' at 
Sec. 900.130(b)(8) with ``may,'' and striking the last sentence 
requiring production of copies of contracts and subcontracts. In 
compromise, the Committee struck the following language: ``of contracts 
and major subcontracts and modifications * * * and A/E service 
deliverables.'' At the end of the first sentence of Sec. 900.130(b)(8) 
the Committee adopted the following language: ``including but not 
limited to descriptions of contracts, major subcontracts and 
modifications implemented during the report period and A/E service 
deliverables.''
    The Committee struck the following language at 
Sec. 900.130(c)(7)(ii): ``of change orders, contracts and major 
subcontracts'' and inserted at Sec. 900.130(c)(8) ``contracts, major 
subcontracts, modifications.''
    One comment argued that Sec. 900.130(e) should require the 
Secretary to act ``within 30 days or as negotiated between and agreed 
to by the parties.'' Another comment suggested that the word 
``sufficient'' replace ``additional'' before''funds are awarded.'' The 
Committee took no action on the first comment and adopted the word 
``sufficient'' in addition to, rather than in lieu of, ``additional.''
    Six comments urged that Sec. 900.131(b)(7) be rewritten as follows: 
``The tribe or tribal organization may not issue a change order which 
is outside the general scope of work defined in the contract or which 
exceeds the contract budget including contingency funds without 
Secretarial approval.'' The Committee took no action.
    Eight comments recommended the deletion of 
Sec. 900.131(b)(11)(i)(A), stating that this section takes authority 
from an Indian tribe when the tribe is acting as the contracting 
officer for its subcontracts. The Committee took no action.
    Eight comments suggested that overhead costs should be included at 
Sec. 900.131(b)(11)(i)(D)(iii). The Committee adopted the language 
``including but not limited to overhead costs'' before ``reasonable 
costs.''
    One comment stated that the Secretary's role under Sec. 900.131 
generally should be substantially narrower. Specifically, the comment 
stated:

    The Secretary should not have final approval authority over 
planning documents once a contract is set for planning activities, 
the Secretary should not retain final approval authority for general 
compliance with contract requirements, and the Secretary should not 
be able to decline acceptance of the constructed building or 
facility. The Secretary should instead be limited to monitoring 
contract performance and to invoking such remedies as may be 
available to the Secretary under the Contract Disputes Act or under 
other provisions of the Self-Determination Act.

    The Committee adopted compromise language on this issue at 
Sec. 900.130(b)(5).
    One comment stated that the independent cost estimate described at 
Sec. 900.131(b)4) is a fully contractible function and the report 
should be shared with both parties. The Committee took no action on 
this comment.
    One comment urged that Sec. 900.131(b)(11)(i)(B) is unacceptable 
because it allows the Secretary subjective discretion to determine what 
is ``materially non-compliant work,'' The Committee took no action on 
this comment.
    Three comments questioned the applicability of Sec. 900.131 to 
cost-reimbursement, fixed-price and non- construction contract 
construction activities. The Committee took no action on those 
comments.
    One comment proposed eliminating the Secretarial approval function 
at Sec. 900.131(b)(1) and inserting the word ``maximum'' before the 
words ``tribal participation.'' The Committee adopted the word 
``comment'' before ``and approval functions'' and ``full'' before 
``tribal participation.'' The Committee also adopted the words ``in 
writing'' with regard to Secretarial notification of any concerns or 
issues that may lead to disapproval and the words ``and documents'' 
after ``relevant information.'' The Committee struck the language 
``accommodate tribal recommendations'' and inserted ``resolve all 
issues and concerns of the tribe or tribal organization'' after the 
words ``good faith effort to.'' The Committee added ``appropriate'' 
before the word ``Secretary'' at Sec. 900.131(b)(2).
    One comment proposed changing Sec. 900.131(b)(4) to read 
``Secretary may rely on the Indian tribe's or tribal organization's 
cost estimate or the Secretary may'' obtain an independent government 
cost estimate that is derived from the final project plans and 
specifications, striking the balance of the sentence. The Committee 
adopted this comment and, after ``tribal organization,'' added the 
following: ``and shall provide all supporting documentation of the 
independent cost estimate to the tribe or tribal organization within 
the 90-day time limit.''
    One comment proposed to strike ``approve'' at Sec. 900.131(b)(5) 
and insert ``provide written comments.'' The Committee adopted the 
following language after ``the Secretary shall have the authority to 
review'': ``for general compliance with the contract requirements and 
provide written comments on,'' and struck ``approve for general 
compliance with contract requirements.'' After ``final construction 
documents phase,'' the Committee also added ``and approve for general 
compliance with contract requirements the project plans specifications 
only at the schematic phase and final construction documents phase.''
    One comment argued that Sec. 900.131(b)(9) be deleted and the 
following substituted: ``The Secretary shall be limited to the number 
of on-site monitoring visits negotiated between and agreed upon by the 
parties.'' The Committee achieved consensus by striking ``retains the 
right to'' and inserting ``may'' after ``the Secretary.''
    In response to a comment regarding Sec. 900.131(b)(1)(iii), the 
Committee inserted ``including but not limited to overhead costs.''
    One comment proposed an additional subsection at 
Sec. 900.131(b)(13)(vi) to read: ``The Indian tribe or tribal 
organization shall be compensated for

[[Page 32495]]

reasonable costs incurred due to termination of the contract.'' The 
Committee adopted this comment.
    One comment proposed adding ``No further approval or justifying 
documentation by the contractor shall be required before expenditure of 
funds'' to Sec. 900.134. The Committee adopted this suggestion.
    Two additional subsections to Subpart J were adopted by the 
Committee. One responds to tribal concerns regarding the short period 
of actual time available to engage in construction activities where 
weather is an issue. The second clarifies that tribal employment rights 
ordinances do apply to construction contracts and subcontracts.
    The Committees received comments urging both approval and rejection 
of Subpart J as proposed. The Committee only considered comments which 
addressed a specific subsection and/or proposed language.
    Construction management services: Of the comments received 
regarding the proposed rule for construction activities under Public 
Law 93-638, many were directed towards the definition of Construction 
Management Services (CMS) and Construction Project Management (CPM) 
contained as part of the rule. Indeed, one comment, representative of 
several Indian tribes, ``. . . objects to the excessively narrow 
definition of construction management services (Sec. 900.113(b)) in a 
fashion which unlawfully defeats the tribal right to contract for 
management services through an ordinary self-determination contract, 
contrary to section 4(m) of the Act.'' CMS is a management process for 
construction projects that in some instances can provide for project 
delivery. Several comments feel that the activities described in the 
definition of CPM should be considered CMS activities. The distinction 
is important in that the statute provides that self-determination 
contracts for CMS can be through the Section 108 Model Agreement and 
not through a self-determination construction contract (Subpart J) as 
the regulations require for conduct of CPM activities.
    The statute does not provide a definition for CMS and efforts to 
develop a definition dominated Committee discussion through the 
regulation process. At the start of the negotiation process, discussion 
departed upon a path that quickly stalled in a quagmire of divided 
opinion as to the role, both appropriate and statutorily permissible, 
available to the Federal government in self-determination contracts 
involving construction. However, at no point was there any dispute 
between tribal or Federal representatives that a tribe can contract for 
all management functions of a construction contract. The dispute 
regarding this issue revolves around the contracting vehicle utilized--
a self-determination contract versus a Section 108 Model Agreement--and 
not the contractibility of management functions. Consistent with the 
Federal argument for limited Federal involvement in construction 
projects was an unwavering view that a Model Agreement, invoked through 
provision CMS, could not be used to circumvent other provisions of the 
statute dealing with construction.
    To move forward, the Committee set aside initial efforts to define 
roles and involvement, and instead focused on describing processes 
through which tribes could pursue construction activities. From these 
scenarios, much discussion ensued and the roles of each party 
developed. Through these efforts, the regulations evolved in a manner 
that provides for Indian tribes or tribal organizations to contract for 
a spectrum of responsibilities, ranging from oversight of Federal 
efforts to tribal responsibility for all aspects of the construction 
process, through multiple options of contracting methods. From the 
standpoint of the tribal representatives that actively and consistently 
participated throughout the negotiation process, the practical effect 
of the CMS definition is negligible towards the overall goal of 
increasing tribal control of the contracting process. The limit of the 
Federal involvement, as described in Sec. 900.132 of the regulation, is 
a direct reflection of efforts to describe reasonable points of Federal 
involvement. Both tribal and Federal representatives of the Committee 
charged with developing the regulations agree that the end result 
reflects a lessening Federal involvement in and an increase of tribal 
control of the construction process through 638 contracting.
    However, Federal and tribal committee members did not reach 
consensus on the definition of CMS. Tribal and federal representatives 
included this issue in their non-consensus reports. The tribal non-
consensus position sought to eliminate the definition of ``construction 
project management'' and include a less restrictive definition of 
``construction management services'' with conforming changes to the 
balance of Subpart J. Tribal representatives are of the view that these 
definitions inappropriately limit the scope of construction management 
activities which should be contractible outside Subpart J. They are 
further of the view that the precise contours of ``construction 
management services'' should be worked out on a case-by-case basis as 
tribes engage in negotiations with particular agencies over specific 
construction projects. Accordingly, the Departments did not change the 
definition of CPM.
    While the Departments have given careful consideration to the views 
of the tribal representatives on this issue, they cannot accept the 
tribal proposal. The Departments are persuaded that, as a legal matter, 
the Act treats construction contracts governed by Subpart J differently 
from contracts for other activities which may be contracted using the 
model agreement in section 108 of the Act. The two definitions allow 
contracting under a section 108 model, agreement for certain 
administrative support, coordination, and monitoring activities. 
However, construction project design and construction activities 
(including day-to-day on site project management and administration) 
are appropriately contracted under Subpart J. Although the tribal 
representatives are of a different legal view, we believe that 
expanding the definition of ``construction management services'' so 
that construction projects may be conducted under a section 108 
construction management agreement circumvents the statutory 
requirements for a construction contract between the government and the 
Indian tribe or tribal organization.

Subpart K--Waiver Procedures

Summary of Subpart
    This subpart implements section 107(e) of the Act, which authorizes 
the Secretary to make exceptions to the regulations promulgated to 
implement the Act or to waive such regulations under certain 
circumstances. Section 107(e) of the Act provides that in reviewing 
waiver requests, the Secretary shall follow the time line, findings, 
assistance, hearing, and appeal procedures set forth in section 102 of 
the Act. Subpart K explains how an Indian tribe or tribal organization 
applies for a waiver, how the waiver request is processed, the 
applicable timeframes for approval or declination of waiver requests, 
and whether technical assistance is available. In addition, subpart K 
restates the declination criteria of section 102 of the Act, which 
apply to waiver requests, and specifies that a denial of a waiver 
request is appealable under subpart L of these regulations. Finally, 
subpart K implements section 107(b) of the Act by providing a process 
for a determination

[[Page 32496]]

by the Secretary that a law or regulation has been superseded by the 
provisions of the Indian Self-Determination Act, as amended.
Summary of Comments
    Several comments indicated that the scope of Subpart K was unclear. 
Some argued that the scope should be narrowed to authorizing only 
waivers under Part 900, while others argued that it should be expanded 
to include other regulations as well. The language in Sec. 900.140 has 
been redrafted to clarify that the statutory waiver authority in 
Section 107(e) of the Act is limited to regulations under this Part. It 
should be noted that the Secretary of the Interior has the reserved 
authority to waive other regulations in 25 CFR if permitted by law. See 
25 CFR 1.2.
    One comment asked whether the Secretary can delegate his or her 
authority to waive regulations to lower administrative levels. The 
Secretary does have such authority, but has not chosen to exercise it.
    One comment recommended a modifying of the last sentence of 
Sec. 900.143 to require a ``clear and convincing'' burden of proof on 
the Secretary where a waiver request is denied. This recommendation was 
rejected because it is different from the statutory burden of proof in 
Section 102(a)(2) of the Act.
    One comment objected that the 90-day period in Sec. 900.143 was too 
long, and recommended shortening it to 30 days. This recommendation was 
rejected because it is contrary to the 90-day time frame in Section 
102(a)(2) of the Act. Section 107(e) of the Act specifically provides 
that the timeline in Section 102 of the Act applies to the review of 
waiver requests.
    One comment asked whether waivers can be granted even if they are 
against the law. Although such a clarification is unnecessary in this 
regulation, the Secretary is not authorized to waive any provision of 
the Act that may be restated in these regulations.
    One comment stated that Sec. 900.146 should be amended to allow 
Indian tribes or tribal organizations the discretion to draw on 
expertise from other tribes and/or tribal organizations to meet their 
needs. To address this concern, Sec. 900.146 was amended to cross-
reference the provision of technical assistance under Sec. 900.7.
    One comment recommended the inclusion of an additional paragraph in 
Sec. 900.148 requiring the Secretary to attach a list of all applicable 
Federal requirements to each contract. This suggestion was not adopted 
because any addition to the contract must be by mutual agreement of the 
parties pursuant to Section 108 of the Act.
    The Office of Management and Budget (OMB) expressed concern about 
recognition of its ultimate responsibility for the approval of waivers 
of any principles contained in OMB cost circulars. Therefore, in 
reviewing waivers of any cost principles, OMB requests that the 
Secretary consult with OMB prior to approving any requests under 
Subpart K.

Subpart L--Appeals

Summary of Subpart
    The advisory committee decided to develop substantive regulations 
governing appeals of pre-award decisions by Federal officials. This 
subpart does not govern appeals of post-award decisions subject to the 
Contract Disputes Act, since the provisions governing disputes under a 
contract can be found in subpart N of these regulations. Subpart L 
implements sections 102(b), 102(e), and 109 of the Act, as well as 
various other provisions requiring the Secretary to provide an 
administrative appeals process when making certain decisions under the 
Act. It provides a road map to the appeals process for Indian tribes 
and tribal organizations.
    The regulation is divided in two parts: the first part concerns 
appeals from decisions relating to declination of a proposal, an 
amendment of a proposal, or a program redesign; non-emergency 
reassumption decisions; decisions to refuse to waive regulations under 
section 107(e) of the Act; disagreements over reporting requirements; 
decisions relating to mature status conversions; decisions relating to 
a request that a law or regulation has been superseded by the Act; and 
a catchall provision relating to any other preaward decisions, except 
Freedom of Information Act appeals and decisions relating to the award 
of discretionary grants under section 103 of the Act. The second part 
concerns decisions relating to emergency reassumptions under section 
109 of the Act and decisions relating to suspension, withholding, or 
delay of payments under section 106(l) of the Act.
    Subpart L allows for an informal conference to avoid more time-
consuming and costly formal hearings, but delineates the appeal process 
available to Indian tribes and tribal organizations that are either 
unhappy with the results of the informal conference or who choose to 
bypass the informal process altogether. Subpart L also states that an 
Indian tribe or tribal organization may go directly to Federal district 
court rather than exhaust the administrative appeal process under this 
regulation.
    Under the regulation, all appeals must be filed with the Interior 
Board of Indian Appeals. Hearings on the record are conducted by an 
Administrative Law Judge of the Department of the Interior's Office of 
Hearings and Appeals, Hearings Division, who renders a recommended 
decision. Objections to this recommended decision may be filed either 
with the Interior Board of Indian Appeals, if the case relates to a 
Department of the Interior decision, or with the Secretary for Health 
and Human Services, if the case relates to the Department of Health and 
Human Services.
    The second part contains similar provisions concerning emergency 
reassumption and suspension decisions, but these decisions are treated 
separately because of the statutory requirement that a hearing on the 
record be held within ten days of the Secretary's notice of his or her 
intent to rescind and reassume a program immediately, or a notice of 
intent to suspend, withhold, or delay payment under a contract.
Summary of Comments
    Several comments noted that the words ``you'' and ``your'' appear 
throughout this Subpart, rather than the words ``Indian tribe'' and 
``tribal organization.'' Where appropriate, the words ``you'' and 
``your'' have been replaced throughout this Subpart.
    Pursuant to several comments, Sec. 900.150 was amended by adding a 
new paragraph (j) subjecting decisions relating to requests for 
determination that a law or regulation has been superseded by the Act 
to the appeal procedures under this Subpart.
    One comment objected to having IHS appeals go to the Interior Board 
of Indian Appeals (IBIA). This recommendation was not adopted because 
to have all appeals heard by a single administrative appeals body so 
that the Act and these regulations are uniformly interpreted by both 
Departments.
    One comment recommended that Indian tribes should be required to go 
through the administrative appeal process before going to Federal 
district court. This recommendation was not adopted because Section 110 
of the Act specifically authorizes direct access to Federal courts.
    One comment recommended that there be a mandatory completion time 
of six months from the time an Indian tribe or tribal organization 
files a notice of appeal to the time for a final decision

[[Page 32497]]

from the IBIA. This recommendation was not adopted because there is no 
way for the IBIA to anticipate when all briefings, discovery 
extensions, and settlement discussions will be concluded. Flexibility 
needs to be maintained during this process. The regulation already 
includes time frames for the IBIA to render decisions once all required 
filings have been made. See, e.g., Sec. 900.167 and Sec. 900.174.
    One comment recommended enlarging the 30-day period in Sec. 900.152 
to 90 days. This recommendation was not adopted because Sec. 900.159 
already provides for an extension of time.
    Several comments requested that Sec. 900.152 be clarified to 
provide that Indian tribes may appeal decisions made by agencies of 
DHHS besides the IHS. This recommendation was adopted, and the question 
in Sec. 900.152 was amended to reflect this clarification.
    One comment suggested that Sec. 900.155(b) be redrafted to define 
the words ``adequate representation'' and suggested that the section be 
redrafted so that the costs of the appeal are chargeable either to the 
contract, if the tribe prevails on the appeal, or to the tribe if the 
appeal is unsuccessful. These recommendations were not adopted. Federal 
agencies reserve the rights to determine what is adequate 
representation in specific cases. To force tribes to repay the expense 
of appeals either through a charge to the contract or through tribal 
funds would be unjust and would discourage appeals which are well 
taken.
    Many comments objected to a provision in Sec. 900.152 and 
Sec. 900.156 which provides that ``the IBIA will determine whether you 
are entitled to a hearing.'' This sentence was deleted from these two 
sections. As pointed out in many comments, the standards governing 
these decisions are set forth in Sec. 900.160.
    Several comments objected to the certification requirement in 
Sec. 900.158(d) because it is not a statutory requirement of the Act, 
and conflicts with the government-to-government relationship between 
tribes and U.S. Government. This recommendation was not adopted. The 
certification requirements here are the same as in courts and other 
administrative appeal forums. The purpose of the requirement is simply 
to ensure that the deciding official has been informed that his/her 
decision has been appealed, and that the IBIA be informed of this 
notification. It is not intended to be a burdensome requirement, but 
merely a certification that is obtained for information purposes.
    Pursuant to a comment, the words ``good reason'' in Sec. 900.159 
were changed to the words ``valid reason.''
    One comment recommended deletion of Sec. 900.159 because any 
request for an extension should be made within the 30-day time frame in 
Sec. 900.158. This recommendation was not adopted because, although a 
matter of considerable debate during the Committee's negotiations, it 
was agreed that there could be extenuating circumstances that could 
prevent a Indian tribe or tribal organization from filing its notice of 
appeal within the 30-day time frame in Sec. 900.158.
    One comment sought clarification of what happens if the IBIA 
determines not to grant an extension. If the IBIA determines that the 
appellant does not have a valid reason to extend the deadline, and the 
tribe disagrees with this determination, it can appeal that decision to 
Federal District Court pursuant to Section 110 of the Act.
    Section 900.160(a) was restructured into two sentences for 
clarification purposes. The second sentence of Sec. 900.160 now begins 
with the words ``[i]f so.
    One comment recommended changing the 15-day time frame in 
Sec. 900.161(b) to a longer period. This recommendation was not adopted 
because it is the Committee's belief that the time frame is adequate to 
hold a pre-hearing conference.
    Several comments suggested that Sec. 900.163 be amended to impose a 
clear and convincing evidence burden of proof on the Secretary. This 
recommendation was rejected because it is different from the statutory 
burden of proof in Section 102(a)(2) of the Act.
    Several comments recommended rewriting the question in Sec. 900.163 
to include all appealable issues. This recommendation was not adopted 
because the burden of proof is on the appellant to show by a 
preponderance of the evidence that the agency erred for issues under 
appeals in Secs. 900.150(h), (i), and (j). This is consistent with the 
usual Administrative Procedure Act standard.
    One comment objected to the agency which is one of the parties to 
the appeal making the final decision in Sec. 900.167. The regulatory 
provision is consistent with the Act. Section 102(e)(2) of the Act 
provides that any decision which represents final agency action shall 
be made ``by an official of the Department who holds a position at a 
higher organizational level within the Department * * * than the agency 
* * * in which the decision was made'' or by an administrative judge.
    Several comments noted that Subpart L does not address the 
statutory right of Indian tribes to recover attorney fees under the 
Equal Access to Justice Act (EAJA). In response to these comments, a 
new section was added at the end of Subpart L clarifying that EAJA 
applies to administrative appeals under this Subpart, and cross-
referencing the appropriate EAJA regulations.

Subpart M--Federal Tort Claims Act Coverage

Summary of Subpart
    Coverage of the Federal Tort Claims Act (FTCA) has been extended to 
Indian tribes, tribal organizations and Indian contractors carrying out 
contracts, grants, and cooperative agreements under the Act. This 
subpart explains which tort claims are covered by the FTCA and which 
tort claims are not covered by the FTCA, for both medical and non-
medical related claims. It also provides for tribal assistance in 
giving notice of tort claims to the Federal agency involved, and in 
providing assistance during the administrative claim or litigation 
process.
Summary of Comments
    Two comments stated that there should be no distinction between 
medical-related and non-medical-related functions under self-
determination contracts for purposes of FTCA coverage, defense or 
payment. This comment was rejected because the medical provisions have 
a unique history grounded in the Public Health Service Act, and in 
Section 102(d) of the Act.
    Several comments expressed concern that the proposed regulations 
lacked guidance regarding insurance. Insurance is beyond the scope of 
FTCA authority for these regulations.
    Several comments stated that portions of this Subpart reflect a 
fundamental misunderstanding of the scope of the Federal government's 
obligation to defend and indemnify tribal contractors for non-tort 
claims and claims outside the contract. Another set of comments 
requested that Sec. 900.183 be amended to explain that an Indian tribe 
or tribal organization may not be sued for claims beyond the scope of 
the FTCA arising out of the performance of self-determination contacts. 
In amending Sec. 900.183, the Committee determined to narrow the scope 
of the regulation strictly to the remedial FTCA provisions of section 
102(d) of the Act and section 314 of Public Law 101-512, as required by 
section 107(a)(1) of the Act. The Committee therefore chose not to 
address the extent to which Indian

[[Page 32498]]

tribes or tribal organizations are protected from suits on other 
claims, which is beyond the scope of these regulations.
    One comment recommended that ``Indian contractor,'' as defined in 
Sec. 900.181(a), should be expanded to include non-medical services as 
well as medical services. Although the Eighth Circuit Court of Appeals 
(see FGS Constructors, Inc. v. Carlow, 64 F.3d 1230) has interpreted 
this provision as applying only to health programs, Sec. 900.181(a)(3) 
was added to reflect the desire of some Indian tribes to continue 
disputing the scope of this term.
    One comment recommended deleting Sec. 900.181(b) since ``contract'' 
is defined elsewhere. The comment was adopted.
    One comment suggested clarifying Sec. 900.183(a) by stating with 
specificity which tort claims are barred. The comment was adopted and 
this section was changed.
    One comment recommended Sec. 900.183(b) be amended by adding a new 
subsection including activities performed by an employee which are 
outside of the scope of employment. The comment was adopted.
    One comment asked what law will be used to implement breach of 
contract claims and whether tribal contractors are subject to Federal 
employment statutes. The comment was rejected because this subject is 
beyond the scope of regulatory authority under section 107(a)(1) of the 
Act.
    One comment questioned the reference to violations of the U.S. 
Constitution in Sec. 900.183(b)(4). The provision was deleted. As 
sovereigns pre-existing the Constitution, Indian tribes have 
historically been regarded as unconstrained by those constitutional 
provisions framed specifically as limitations on Federal and state 
authority. See Santa Clara Pueblo v. Martinez, 436 U.S. 49, 56 (1978). 
To the extent applicable, 28 U.S.C. 2679(b)(2) continues to be 
relevant.
    Several comments asked whether tribal law applied to tort claims. 
No change was made because state law applies to the determination of 
liability for tort claims under the FTCA.
    One comment suggested amending Sec. 900.188(c)(7) to add 
``including Federal employees assigned to the contractor,'' after the 
word ``employees.'' The comment was adopted and the sentence re-
written.
    Two comments recommended that the notice requirements of 28 U.S.C. 
2679(c) be referenced in Sec. 900.188(b). Also, one comment suggested 
adding the same notice provision to Sec. 900.203. The comments were 
adopted.
    One comment recommended synchronizing Sec. 900.206 with 
Sec. 900.192 so that the list of employees covered for non-medical-
related claims is the same as for medical-related claims. The comment 
was adopted.

Subpart N--Post-Award Contract Disputes

Summary of Subpart
    Under section 110(d) of the Act, the Contract Disputes Act (CDA) 
applies to post-award contract claims. This subpart explains when a CDA 
claim can be filed, the contents of a claim, and where to file the 
claim. It also explains the difference in the handling of claims over 
$100,000 and those less than that amount.
Summary of Comments
    Several comments recommended that language from the withdrawn 1994 
NPRM regarding the application of the Equal Access to Justice Act be 
incorporated into the Subpart. The comments were adopted by adding 
Sec. 900.216(c).
    Several comments recommended adding paragraph 900.805(k) from the 
withdrawn 1994 NPRM regarding using accounting principles as ``guides'' 
rather ``rigid measures'' in IBCA appeals. The comments were adopted 
and a new section was added.
    One comment was concerned that Sec. 900.217 was silent regarding 
the Tribal Court system alternative for alternative disputes 
resolution. A change was made in Sec. 900.217(b) to adopt this 
recommendation. Two comments indicated that Sec. 900.217(b) needs to 
add the right of the tribe, if it desires, to file in Federal District 
Court or the Court of Federal Claims. This concern is already addressed 
in Sec. 900.222.
    Several comments recommended that Sec. 900.220(b) be revised to 
read: ``supporting documents or data are accurate and complete to the 
best of the Indian tribe or tribal organization's knowledge and 
belief.'' The comments were adopted.
    Two comments recommended that Sec. 900.224 be amended so that delay 
of the awarding official in making a final decision should be treated 
as though the claim were approved, rather than denied. These comments 
were rejected because the existing language is statutory.
    Several comments recommended adding the following language to 
Sec. 900.227: ``If a decision is withdrawn and a new decision 
acceptable to the contractor is not issued, the contractor may proceed 
with the appeal based on the new decision or, if no new decision is 
issued, proceed under Sec. 900.224.'' The comments were adopted and a 
new Sec. 900.227(c) was added.
    One comment expressed concern that Sec. 900.230(a) requires an 
Indian tribe to keep performing its contract in spite of the 
possibility that the claim being appealed represents crucial operating 
funds from the contact. This is addressed by the limitation of cost 
clause of the model contract.

Subpart O--Conflicts of Interest

Summary of Subpart
    Section 900.231 defines an organizational conflict of interest, and 
Sec. 900.233 defines personal conflicts of interest which could affect 
self-determination contracts. The balance of the subpart advises Indian 
tribes what must be done in the event a conflict arises. The subpart 
also provides that Indian tribes may elect to negotiate specific 
conflicts provisions on a contract-by-contract basis.
Summary of Comments
    The area of conflict of interests--where an Indian tribe or tribal 
organization's and/or their employees' administrations of a self-
determination contract affecting allottees and others could be impaired 
by financial bias--raises difficult questions for DOI, including the 
proper balance between the Federal-tribal government-to-government 
relationship and the Secretary's mandated trust responsibility. 
Additional issues include the degree of monitoring required for 
conflicts, if any, where the United States contracts with Indian tribes 
to perform duties that directly affect the statutory rights of third 
parties. In attempting to reconcile these difficult questions, the DOI 
has opted for an approach that seeks to minimize intrusion and burden 
to Indian tribes and tribal organizations, yet provides for a degree of 
accountability where conflicts arise.
    The Committee reached consensus on a personal conflict of interest 
provision in the procurement management standards in Subpart F. The 
Federal committee members believed this section should be supplemented 
by a regulation addressing conflicts of the Indian tribe or tribal 
organization itself and conflicts of individual employees involved in 
trust resource management. These regulations appear in Subpart O of the 
final regulation and only apply to contracts awarded by the DOI.
    Several comments on the NPRM noted that no provision on conflicts 
of interest has previously been adopted in the 20 years of contracting 
trust

[[Page 32499]]

programs. The need to address the conflicts issue in some form has 
become more apparent as the DOI's experience with 638 contracts has 
increased.
    Some comments assert that excellent tribal track records make it 
clear that no federal regulation is necessary. Several other comments 
state that the NPRM proposal suggests that in the absence of regulation 
Indian tribes will engage in fraudulent actions. The DOI does not 
contend that there is a widespread problem of unmitigated conflicts of 
interest. Rather it is adopting the rule in recognition of its 
responsibility as trustee to ensure that in a trust relationship, the 
acts of its agents are in accordance with high fiduciary standards. 
Therefore, the rule is intended to protect trust beneficiaries. Because 
the regulation only requires an Indian tribe or tribal organization to 
provide notice in the case of an organizational conflicts of interest, 
compliance should not be burdensome.
    Several comments stated that any potential conflict between a tribe 
and allottees is no different than any other relationship between a 
government and its citizens, where a government uses its own employees 
to value private land to be condemned for government purposes. Several 
other comments state the NPRM's ``organizational conflict'' proposal 
was vague and nonsensical since the United States retains a residual 
component (such as lease approval or taking fee land into trust status) 
which gives the DOI ample opportunity to protect the interests of the 
United States. A related comment stated that this proposal appeared to 
pass on to Indian tribes the costs of the federal government's 
continuing responsibilities as trustee, constituting an unauthorized 
failure to perform non-delegable functions.
    The final regulations do address organizational conflicts, because 
there is a significant difference between the obligation of a trustee 
to a beneficiary and that of a government to a citizen. In response to 
these comments, the DOI significantly altered the organizational 
conflicts regulation from the NPRM. First, the final regulation clearly 
states that it only applies when the contract affects the interests of 
allottees, trust resources or statutory obligations to third parties. 
Second, the Indian tribe or tribal organization is only required to 
provide notice to the federal government when such a situation arises, 
that is not already covered in their 638 contract.
    Several Indian tribes commented that Federal regulations must not 
dictate internal tribal operations in the area of personal conflicts of 
interest. Some of them acknowledge that the federal proposal would not 
be particularly burdensome, but state that it is inconsistent with the 
federal policy of Indian self-determination.
    The personal conflict of interest provisions are narrowly drawn to 
cover only trust programs. While there is a strong federal policy of 
Indian self-determination, there is also a strong federal policy of 
strict adherence to the trust responsibilities arising from treaty and 
statute. The self-determination statute does not sever the fiduciary 
relationship between the United States and Indian trust beneficiaries. 
For this reason the ethical standards involved are not solely an 
internal tribal concern.
    One comment recommended reliance on tribal codes, supplemented by 
negotiated contract provisions, to protect against personal conflicts 
of interest. The comment analogized the federal proposal to 
unsatisfactory past experiences with BIA ``model codes.''
    The rule accommodates tribal codes and negotiated contract 
provisions, that the Department agrees would be the ideal manner in 
which to address conflicts. However it also provides a rule to apply in 
the absence of tribal code or contract terms that adequately protect 
trust beneficiaries from conflicts of interest.
    Several comments agree that regulations should address the problem 
of conflicts of interest arising from familial relations, 
organizational relations where elected officials also serve in 
programmatic capacities, and financial relations. These comments 
suggest that Indian tribes be authorized to employ their own written 
codes of standards of conducts. Until the Secretary approves such 
codes, the comments suggest terms that should apply that draw upon 
standards applicable to federal employees and other government 
contractors.
    The Department agrees that regulations are needed and has provided 
in Sec. 900.236 that it will negotiate conflicts provisions in 
contracts, to displace these regulations if there is agreement to 
provide equivalent protection to these regulations. The Department's 
regulations focus solely on financial interests, and not familial and 
organizational relations, believing that the latter is more susceptible 
to internal tribal regulation. Because of concerns about tribal 
sovereignty, the final regulation does not require Departmental 
approval of tribal codes, except as agreed to in individual contract 
negotiations.
    Some comments described the proposal in the NPRM as presenting 
micro-management opportunities for federal agency personnel 
inconsistent with a government-to-government relationship. To avoid 
micro-management, the final rule was modified, in the case of 
organizational conflicts, to require only notice to the DOI when and 
Indian tribe or tribal organization learns of the existence of a 
conflict. No mitigation plan, as proposed in the 1996 NPRM, is 
required. The personal conflicts regulation only requires the Indian 
tribe to address the conflict in a manner that enables the Department 
to meet its trust responsibilities.
    Some comments recommended that Indian tribes and the DOI rely on 
contract-by-contract negotiations for addressing conflicts provision. 
As mentioned earlier, because of the trust and legal responsibilities 
of the Department, the regulations are necessary to address situations 
where terms cannot be negotiated in the short time permitted for 
negotiation.
    Several Indian tribes commented that the Government does not 
similarly regulate its own actions, and consult with Indian tribes 
concerning conflicts with actions proposed on allottee properties. The 
DOI agrees that consultations is appropriate, but recognized that it 
has a very high duty to assure that actions taken with respect to 
allottee properties are consistent with its fiduciary responsibilities 
to those allottees. The rule does not require consultation with 
allottees on actions concerning tribal lands, or vice versa.
    One comment written on behalf of several individual owners of trust 
resources, strongly supported the adoption of minimum standards to 
assure the integrity of the performance and administration of trust 
resources. The comment suggests that, at a minimum trust resources be 
subject to the same conflict standards applied to procurement in the 
proposed Sec. 900.48.
    The final rule is very similar to the agreed provisions in 
Sec. 900.48.

Subpart P--Retrocession and Reassumption Procedures

Summary of Subpart
    Section 107(a)(1) of the Act authorizes the Secretaries to 
promulgate regulations governing retrocession and reassumption 
procedures. Sections 900.240 through 900.245 define retrocession, what 
entities are entitled to retrocede, tribal rights for contracting and 
funding as a result of retrocession, and tribal obligations regarding 
the return of property to the Secretary after retrocession.
    Sections 900.246 through 900.256 explain what is meant by 
reassumption,

[[Page 32500]]

the two types of reassumption authorized under the Act, necessary 
circumstances when using emergency and non-emergency reassumption 
authority, and Secretarial responsibilities, including detailed written 
notice requirements when reassumption is invoked. The subpart describes 
a number of activities after reassumption has been completed, such as 
authorization for ``wind up'' costs, tribal obligations regarding the 
return of property to the Secretary, and a funding reduction 
protection.
Summary of Comments
    One comment recommended that the phrase ``may retrocede a 
contract'' be added to the end of the answer in Sec. 900.232 to provide 
a more complete answer to the question of who may retrocede a contract. 
This suggestion adds clarity to the answer, and has been adopted.
    Several comments recommended that an additional question and answer 
be added to address when a retrocession becomes effective. The 
recommended language is contained in the Act, provides meaningful 
information to the users of this regulation, and has been adopted and 
inserted as a new Sec. 900.233.
    Several comments recommended that the term ``fair market'' be added 
to the answer in Sec. 900.236 and Sec. 900.246 in describing the value 
of property to be returned to the Secretary in the event of a 
retrocession or reassumption. While the essence of this recommendation 
has been adopted, to remain consistent throughout the regulation the 
definition of ``fair market'' as provided in Subpart I will be restated 
in this Subpart. (Subpart I states ``current fair market value, less 
the cost of improvements borne by the Indian tribe or tribal 
organization in excess of $5,000.'') Also, for clarity the word 
``requested'' has been added to the answer in Sec. 900.236 in 
describing property to be returned to the Secretary.
    One comment recommended that the answer provided in Sec. 900.238, 
which has (a) and (b) components, be reversed to track the order of the 
question and avoid confusion. This recommendation has been adopted to 
promote uniformity in this question and answer.
    A comment recommended language be added to the answer in 
Sec. 900.239 incorporating the option for the award of grants to Indian 
tribes from the Secretary for technical assistance to overcome non-
emergency deficiencies. While the exact language suggested is not used, 
the recommendation has been adopted since such grants are authorized 
under the Act.
    Several comments recommended that language be added to 
Sec. 900.238(b)(1) dealing with the conditions for emergency 
reassumptions. These comments were not adopted because the language now 
contained in Sec. 900.238(b)(1) precisely tracks the Act and the 
suggested additional language may confuse statutory intent.
    One comment recommended that a statement be added to Sec. 900.242 
that the Secretary will not rescind a contract until there is a final 
decision in any administrative hearing or appeal on a non-emergency 
reassumption. This recommendation has been adopted.

Internal Agency Procedures

    The Departments' position is that a comprehensive manual for the 
internal management of self-determination contracts should not be 
developed through the formal rulemaking process. Internal agency 
procedures are more appropriately developed outside the negotiated 
rulemaking process, to allow flexibility in addressing practical 
considerations which arise in the field, and to allow maximum 
participation from those agency officials who bear much of the 
responsibility for implementing the Act to its fullest capability. The 
Federal position supports a joint tribal and Federal commitment to work 
together to generate a procedural manual which will promote the 
purposes underlying the Indian Self-Determination Act and facilitate 
contracting by Indian tribes and tribal organizations.
    One goal of the full committee is to have uniform procedures for 
the implementation and interpretation of the act and these regulations 
which apply to all Federal agencies which administer contracted 
programs. The Federal members of the committee propose that the parties 
formally agree to work together to develop a manual which guides all 
contracting agencies through the contracting process. This is 
consistent with the position taken by the work group charged with 
making recommendations regarding internal agency procedures.
    To that end, Federal committee members would commit to a firm time 
line within which to produce a manual.

Administrative Matters

    This rule is a significant regulatory action Executive Order 12866 
and requires review by the Office of Management and Budget.
    The Departments certify that this rule will not have significant 
economic effects on a substantial number of small entities under the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
    In accordance with Executive Order 12630 the Department of the 
Interior and the Department of Health and Human Services have 
determined that this regulation does not have significant takings 
implications. The rule does not pertain to the taking of private 
property interests, nor does it have an effect on private property.
    The Department of the Interior and the Department of Health and 
Human Services have determined that this rule does not have significant 
Federalism effects under Executive Order 12612 and will not interfere 
with the roles, rights, and responsibilities of states.
    The Departments of the Interior and Health and Human Services have 
determined that this rule does not constitute a major Federal action 
significantly affecting the quality of the human environment and that 
no detailed statement is required under the National Environmental 
policy Act of 1969.
    This rule imposes no unfunded mandates on any governmental or 
private entity in excess of $100 million annually and is in compliance 
with the provisions of the Unfunded Mandates Act of 1995.

Paperwork Reduction Act of 1995

    The Office of Management and Budget has approved, under 44 U.S.C. 
chapter 35, the information collection requirements in part 900 under 
assigned control number 1076-0136. The information for part 900 is 
being collected and used by the Departments to determine applicant 
eligibility, evaluate applicant capabilities, protect the service 
population, safeguard Federal funds and other resources, and permit the 
Departments to administer and evaluate contract programs.
    The Departments estimate that the average burden of complying with 
the collection, broken down by subpart, will be as follows: Subpart C 
(Contract Proposal Contents), 222 hours; Subpart F (Standards for 
Tribal or Tribal Organization Management Systems), 250 hours; Subpart G 
(Programmatic Reports and Data Requirements), 150 hours; Subpart I 
(Property Donation Procedures), 10 hours; Subpart J (Construction), 564 
hours; Subpart K (Waiver Procedures), 10 hours; and Subpart L 
(Appeals), 40 hours.
    Responses to the collection of information under this regulation 
are required in order for Indian tribes or tribal organizations to 
obtain or retain benefits under the Act. However, not every tribal 
contractor will need to respond to each request for information 
contained in the regulation, as some of the requests pertain to 
specific

[[Page 32501]]

situations or to certain types of self-determination contracts. 
Moreover, under section 5(f)(2) of the Act, tribal organizations are 
given authority to negotiate their individual reporting requirements 
with the Secretary on a contract-by-contract basis. Any disagreements 
over reporting requirements are subject to the declination criteria and 
procedures in section 102 of the Act and subpart E of the regulation.
    There is no assurance of confidentiality provided to respondents 
concerning this information collection.
    The Departments may not conduct or sponsor a collection of 
information, nor are Indian tribes or tribal organizations or other 
persons required to respond to such collections unless the Departments 
display a currently valid OMB control number.

List of Subjects in 25 CFR Part 900

    Indians; Administrative practice and procedure, Buildings and 
facilities, Claims, Government contracts, Grant programs--Indians, 
Health care, Indians--business and finance, Government property 
management.

    For the reasons given in the preamble, the Departments of the 
Interior and Health and Human Services hereby establish a new part 900 
in chapter V of title 25 of the Code of Federal Regulations as set 
forth below.

    Dated: June 14, 1996.
Bruce Babbitt,
Secretary of the Interior.

    Dated: June 13, 1996.
Donna Shalala,
Secretary of Health and Human Services.
CHAPTER V--BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR, AND 
INDIAN HEALTH SERVICE, DEPARTMENT OF HEALTH AND HUMAN SERVICES

PART 900--CONTRACTS UNDER THE INDIAN SELF-DETERMINATION AND 
EDUCATION ASSISTANCE ACT

Subpart A--General Provisions

Sec.
900.1  Authority.
900.2  Purpose and scope.
900.3  Policy statements.
900.4  Effect on existing tribal rights.
900.5  Effect of these regulations on Federal program guidelines, 
manual, or policy directives.

Subpart B--Definitions

900.6  Definitions.

Subpart C--Contract Proposal Contents

900.7  What technical assistance is available to assist in preparing 
an initial contract proposal?
900.8  What must an initial contract proposal contain?
900.9  May the Secretary require an Indian tribe or tribal 
organization to submit any other information beyond that identified 
in 900.8?
900.10  How does an Indian tribe or tribal organization secure a 
list of all Federal property currently in use in carrying out the 
programs, functions, services, or activities that benefit the Indian 
tribe or tribal organization to assist in negotiating a contract?
900.11  What should an Indian tribe or tribal organization that is 
proposing a contract do about specifying the Federal property that 
the Indian tribe or tribal organization may wish to use in carrying 
out the contract?
900.12  Are the proposal contents requirements the same for renewal 
of a contract that is expiring and for securing an annual funding 
agreement after the first year of the funding agreement?
900.13  Does the contract proposal become part of the final 
contract?

Subpart D--Review and Approval of Contract Proposals

900.14  What does this Subpart cover?
900.15  What shall the Secretary do upon receiving a proposal?
900.16  How long does the Secretary have to review and approve the 
proposal and award the contract, or decline a proposal?
900.17  Can the statutory 90-day period be extended?
900.18  What happens if a proposal is not declined within 90 days 
after it is received by the Secretary?
900.19  What happens when a proposal is approved?

Subpart E--Declination Procedures

900.20  What does this Subpart cover?
900.21  When can a proposal be declined?
900.22  For what reasons can the Secretary decline a proposal?
900.23  Can the Secretary decline a proposal where the Secretary's 
objection can be overcome through the contract?
900.24  Can a contract proposal for an Indian tribe's or tribal 
organization's share of administrative programs, functions, 
services, and activities be declined for any reason other than the 
five reasons specified in Sec. 900.22
900.25  What if only a portion of a proposal raises one of the five 
declination criteria?
900.26  What happens if the Secretary declines a part of a proposal 
on the ground that the proposal proposes in part to plan, conduct, 
or administer a program, function, service or activity that is 
beyond the scope of programs covered under section 102(a) of the 
Act, or proposes a level of funding that is in excess of the 
applicable level determined under section 106(a) of the Act?
900.27  If an Indian tribe or tribal organization elects to contract 
for a severable portion of a proposal, does the Indian tribe or 
tribal organization lose its appeal rights to challenge the portion 
of the proposal that was declined?
900.28  Is technical assistance available to an Indian tribe or 
tribal organization to avoid declination of a proposal?
900.29  What is the Secretary required to do if the Secretary 
decides to decline all or a portion of a proposal?
900.30  When the Secretary declines all or a portion of a proposal, 
is the Secretary required to provide an Indian tribe or tribal 
organization with technical assistance?
900.31  When the Secretary declines all or a portion of a proposal, 
is an Indian tribe or tribal organization entitled to any appeal?
900.32  Can the Secretary decline an Indian tribe or tribal 
organization's proposed successor annual funding agreement?
900.33  Are all proposals to renew term contracts subject to the 
declination criteria?

Subpart F--Standards for Tribal or Tribal Organization Management 
Systems

General

900.35  What is the purpose of this Subpart?
900.36  What requirements are imposed upon Indian tribes or tribal 
organizations by this Subpart?
900.37  What provisions of Office of Management and Budget (OMB) 
circulars or the ``common rule'' apply to self-determination 
contracts?
900.38  Do these standards apply to the subcontractors of an Indian 
tribe or tribal organization carrying out a self-determination 
contract?
900.39  What is the difference between a standard and a system?
900.40  When are Indian tribe or tribal organization management 
standards and management systems evaluated?
900.41  How long must an Indian tribe or tribal organization keep 
management system records?

Standards for Financial Management Systems

900.42  What are the general financial management system standards 
that apply to an Indian tribe carrying out a self-determination 
contract?
900.43  What are the general financial management system standards 
that apply to a tribal organization carrying out a self-
determination contract?
900.44  What minimum general standards apply to all Indian tribe or 
tribal organization financial management systems when carrying out a 
self-determination contract?
900.45  What specific minimum requirements shall an Indian tribe or 
tribal organization's financial management system contain to meet 
these standards?
900.46  What requirements are imposed upon the Secretary for 
financial management by these standards?

[[Page 32502]]

Procurement Management System Standards

900.47  When procuring property or services with self-determination 
contract funds, can an Indian tribe or tribal organization follow 
the same procurement policies and procedures applicable to other 
Indian tribe or tribal organization funds?
900.48  If the Indian tribe or tribal organization does not propose 
different standards, what basic standards shall the Indian tribe or 
tribal organization follow?
900.49  What procurement standards apply to subcontracts?
900.50  What Federal laws, regulations, and Executive Orders apply 
to sub-contractors?

Property Management System Standards

900.51  What is an Indian tribe or tribal organization's property 
management system expected to do?
900.52  What type of property is the property management system 
required to track?
900.53  What kind of records shall the property management system 
maintain?
900.54  Should the property management system prescribe internal 
controls?
900.55  What are the standards for inventories?
900.56  What maintenance is required for property?
900.57  What if the Indian tribe or tribal organization chooses not 
to take title to property furnished or acquired under the contract?
900.58  Do the same accountability and control procedures described 
above apply to Federal property?
900.59  How are the inventory requirements for Federal property 
different than for tribal property?
900.60  How does an Indian tribe or tribal organization dispose of 
Federal property?

Subpart G--Programmatic Reports and Data Requirements

900.65  What programmatic reports and data shall the Indian tribe or 
tribal organization provide?
900.66  What if the Indian tribe or tribal organization and the 
Secretary cannot come to an agreement concerning the type and/or 
frequency of program narrative and/or program data report(s)?
900.67  Will there be a uniform data set for all IHS programs?
900.68  Will this uniform data set be required of all Indian tribe 
or tribal organizations contracting with the IHS under the Act?

Subpart H--Lease of Tribally-Owned Buildings by the Secretary

900.69  What is the purpose of this Subpart?
900.70  What elements are included in the compensation for a lease 
entered into between the Secretary and an Indian tribe or tribal 
organization for a building owned or leased by the Indian tribe or 
tribal organization that is used for administration or delivery of 
services under the Act?
900.71  What type of reserve fund is anticipated for funds deposited 
into a reserve for replacement of facilities as specified in 
Sec. 900.70(c)?
900.72  Who is the guardian of the fund and may the funds be 
invested?
900.73  Is a lease with the Secretary the only method available to 
recover the types of cost described in 900.70?
900.74  How may an Indian tribe or tribal organization propose a 
lease to be compensated for the use of facilities?

Subpart I--Property Donation Procedures

General

900.85  What is the purpose of this Subpart?
900.86  How will the Secretary exercise discretion to acquire and 
donate BIA or IHS excess property and excess and surplus Federal 
property to an Indian tribe or tribal organization?

Government-Furnished Property

900.87  How does an Indian tribe or tribal organization obtain title 
to property furnished by the Federal government for use in the 
performance of a contract or grant agreement pursuant to section 
105(f)(2)(A) of the Act?
900.88  What should the Indian tribe or tribal organization do if it 
wants to obtain title to government-furnished real property that 
includes land not already held in trust?
900.89  When may the Secretary elect to reacquire government-
furnished property whose title has been transferred to an Indian 
tribe or tribal organization?
900.90  Does government-furnished real property to which an Indian 
tribe or tribal organization has taken title continue to be eligible 
for facilities operation and maintenance funding from the Secretary?

Contractor-Purchased Property

900.91  Who takes title to property purchased with funds under a 
self-determination contract or grant agreement pursuant to section 
105(f)(2)(A)?
900.92  What should the Indian tribe or tribal organization do if it 
wants contractor-purchased real property to be taken into trust?
900.93  When may the Secretary elect to acquire title to contractor-
purchased property?
900.94  Is contractor-purchased real property to which an Indian 
tribe or tribal organization holds title eligible for facilities 
operation and maintenance funding from the Secretary?

BIA and IHS Excess Property

900.95  What is BIA or IHS excess property?
900.96  How can Indian tribes or tribal organizations learn about 
BIA and IHS excess property?
900.97  How can an Indian tribe or tribal organization acquire 
excess BIA or IHS property?
900.98  Who takes title to excess BIA or IHS property donated to an 
Indian tribe or tribal organization?
900.99  Who takes title to any land that is part of excess BIA or 
IHS real property donated to an Indian tribe or tribal organization?
900.100  May the Secretary elect to reacquire excess BIA or IHS 
property whose title has been transferred to an Indian tribe or 
tribal organization?
900.101  Is excess BIA or IHS real property to which an Indian tribe 
or tribal organization has taken title eligible for facilities 
operation and maintenance funding from the Secretary?

Excess or Surplus Government Property of Other Agencies

900.102  What is excess or surplus government property of other 
agencies?
900.103  How can Indian tribes or tribal organizations learn about 
property that has been designated as excess or surplus government 
property?
900.104  How may an Indian tribe or tribal organization receive 
excess or surplus government property of other agencies?
900.105  Who takes title to excess or surplus Federal property 
donated to an Indian tribe or tribal organization?
900.106  If a contract or grant agreement or portion thereof is 
retroceded, reassumed, terminated, or expires, may the Secretary 
reacquire title to excess or surplus Federal property of other 
agencies that was donated to an Indian tribe or tribal organization?

Property Eligible for Replacement Funding

900.107  What property to which an Indian tribe or tribal 
organization obtains title under this Subpart is eligible for 
replacement funding?

Subpart J--Construction

900.110  What does this Subpart cover?
900.111  What activities of construction programs are contractible?
900.112  What are construction phases?
900.113  Definitions.
900.114  Why is there a separate subpart in these regulations for 
construction contracts and grants?
900.115  How do self-determination construction contracts relate to 
ordinary Federal procurement contracts?
900.116  Are negotiated fixed-price contracts treated the same as 
cost-reimbursable contracts?
900.117  Do these ``construction contract'' regulations apply to 
planning services?
900.118  Do these ``construction contract'' regulations apply to 
construction management services?
900.119  To what extent shall the Secretary consult with affected 
Indian tribes before spending funds for any construction project?
900.120  How does an Indian tribe or tribal organization find out 
about a construction project?
900.121  What happens during the preplanning phase and can an Indian 
tribe or tribal organization perform any of the activities involved 
in this process?
900.122  What does an Indian tribe or tribal organization do if it 
wants to secure a construction contract?

[[Page 32503]]

900.123  What happens if the Indian tribe or tribal organization and 
the Secretary cannot develop a mutually agreeable contract proposal?
900.124  May the Indian tribe or tribal organization elect to use a 
grant in lieu of a contract?
900.125  What shall a construction contract proposal contain?
900.126  Shall a construction contract proposal incorporate 
provisions of Federal construction guidelines and manuals?
900.127  What can be included in the Indian tribe or tribal 
organizations contract budget?
900.128  What funding shall the Secretary provide in a construction 
contract?
900.129  How do the Secretary and Indian tribe or tribal 
organization arrive at an overall fair and reasonable price for the 
performance of a construction contract?
900.130  What role does the Indian tribe or tribal organization play 
during the performance of a self-determination construction 
contract?
900.131  What role does the Secretary play during the performance of 
a self-determination construction contract?
900.132  Once a contract and/or grant is awarded, how will the 
Indian tribe or tribal organization receive payments?
900.133  Does the declination process or the Contract Dispute Act 
apply to construction contract amendments proposed either by an 
Indian tribe or tribal organization or the Secretary?
900.134  At the end of a self-determination construction contract, 
what happens to savings on a cost-reimbursement contract?
900.135  May the time frames for action set out in this Subpart be 
reduced?
900.136  Do tribal employment rights ordinances apply to 
construction contracts and subcontracts?
900.137  Do all provisions of the other subparts apply to contracts 
awarded under this subpart?

Subpart K--Waiver Procedures

900.140  Can any provision of the regulations under this Part be 
waived?
900.141  How does an Indian tribe or tribal organization get a 
waiver?
900.142  Does an Indian tribe or tribal organization's waiver 
request have to be included in an initial contract proposal?
900.143  How is a waiver request processed?
900.144  What happens if the Secretary makes no decision within the 
90-day period?
900.145  On what basis may the Secretary deny a waiver request?
900.146  Is technical assistance available for waiver requests?
900.147  What appeal rights are available?
900.148  How can an Indian tribe or tribal organization secure a 
determination that a law or regulation has been superseded by the 
Indian Self-Determination Act, as specified in section 107(b) of the 
Act?

Subpart L--Appeals

Appeals Other Than Emergency Reassumption and Suspension, Withholding 
or Delay in Payment

900.150  What decisions can an Indian tribe or tribal organization 
appeal under this Subpart?
900.151  Are there any appeals this part does not cover?
900.152  How does an Indian tribe or tribal organization know where 
and when to file its appeal from decisions made by agencies of DOI 
or DHHS?
900.153  Does an Indian tribe or tribal organization have any 
options besides an appeal?
900.154  How does an Indian tribe or tribal organization request an 
informal conference?
900.155  How is an informal conference held?
900.156  What happens after the informal conference?
900.157  Is the recommended decision always final?
900.158  How does an Indian tribe or tribal organization appeal the 
initial decision, if it does not request an informal conference or 
if it does not agree with the recommended decision resulting from 
the informal conference?
900.159  May an Indian tribe or tribal organization get an extension 
of time to file a notice of appeal?
900.160  What happens after an Indian tribe or tribal organization 
files an appeal?
900.161  How is a hearing arranged?
900.162  What happens when a hearing is necessary?
900.163  What is the Secretary's burden of proof for appeals from 
decisions under Sec. 900.150(a) through Sec. 900.150(g)?
900.164  What rights do Indian tribes, tribal organizations, and the 
government have during the appeal process?
900.165  What happens after the hearing?
900.166  Is the recommended decision always final?
900.167  If an Indian tribe or tribal organization objects to the 
recommended decision, what will the Secretary of Health and Human 
Services or the IBIA do?
900.168  Will an appeal hurt the Indian tribe or tribal 
organization's position in other contract negotiations?
900.169  Will the decisions on appeals be available for the public 
to review?

Appeals of Emergency Reassumption of Self-Determination Contracts or 
Suspensions, Withholding or Delay of Payments Under a Self-
Determination Contract

900.170  What happens in the case of emergency reassumption or 
suspension or withholding or delay of payments?
900.171  Will there be a hearing?
900.172  What happens after the hearing?
900.173  Is the recommended decision always final?
900.174  If an Indian tribe or tribal organization objects to the 
recommended decision, what will the Secretary of Health and Human 
Services or the IBIA do?
900.175  Will an appeal hurt an Indian tribe or tribal 
organization's position in other contract negotiations?
900.176  Will the decisions on appeals be available for the public 
to review?

Applicability of the Equal Access to Justice Act

900.177  Does the Equal Access to Justice Act (EAJA) apply to 
appeals under this subpart?

Subpart M--Federal Tort Claims Act Coverage General Provisions

900.180  What does this Subpart cover?
900.181  What definitions apply to this subpart?
900.182  What other statutes and regulations apply to FTCA coverage?
900.183  Do Indian tribes and tribal organizations need to be aware 
of areas which FTCA does not cover?
900.184  Is there a deadline for filing FTCA claims?
900.185  How long does the Federal government have to process an 
FTCA claim after the claim is received by the Federal agency, before 
a lawsuit may be filed?
900.186  Is it necessary for a self-determination contract to 
include any clauses about Federal Tort Claims Act coverage?
900.187  Does FTCA apply to a self-determination contract if FTCA is 
not referenced in the contract?
900.188  To what extent shall the contractor cooperate with the 
Federal government in connection with tort claims arising out of the 
contractor's performance?
900.189  Does this coverage extend to subcontractors of self-
determination contracts?

Medical-Related Claims

900.190  Is FTCA the exclusive remedy for a tort claim for personal 
injury or death resulting from the performance of a self-
determination contract?
900.191  Are employees of self-determination contractors providing 
health services under the self-determination contract protected by 
FTCA?
900.192  What employees are covered by FTCA for medical-related 
claims?
900.193  Does FTCA coverage extend to individuals who provide health 
care services under a personal services contract providing services 
in a facility that is owned, operated, or constructed under the 
jurisdiction of the IHS?
900.194  Does FTCA coverage extend to services provided under a 
staff privileges agreement with a non-IHS facility where the 
agreement requires a health care practitioner to provide reciprocal 
services to the general population?
900.195  Does FTCA coverage extend to the contractor's health care 
practitioners providing services to private patients on a fee-for-
services basis when such personnel (not the self-determination 
contractor) receive the fee?

[[Page 32504]]

900.196  Do covered services include the conduct of clinical studies 
and investigations and the provision of emergency services, 
including the operation of emergency motor vehicles?
900.197  Does FTCA cover employees of the contractor who are paid by 
the contractor from funds other than those provided through the 
self-determination contract?
900.198  Are Federal employees assigned to a self-determination 
contractor under the Intergovernmental Personnel Act or detailed 
under section 214 of the Public Health Service Act covered to the 
same extent that they would be if working directly for a Federal 
agency?
900.199  Does FTCA coverage extend to health care practitioners to 
whom staff privileges have been extended in contractor health care 
facilities operated under a self-determination contract on the 
condition that such practitioner provide health services to IHS 
beneficiaries covered by FTCA?
900.200  May persons who are not Indians or Alaska Natives assert 
claims under FTCA?

Procedure for Filing Medical-Related Claims

900.201  How should claims arising out of the performance of 
medical-related functions be filed?
900.202  What should a self-determination contractor or a 
contractor's employee do on receiving such a claim?
900.203  If the contractor or contractor's employee receives a 
summons and/or a complaint alleging a tort covered by FTCA, what 
should the contractor do?

Non-Medical Related Claims

900.204  Is FTCA the exclusive remedy for a non-medical related tort 
claim arising out of the performance of a self-determination 
contract?
900.205  To what non-medical-related claims against self-
determination contractors does FTCA apply?
900.206  What employees are covered by FTCA for non-medical-related 
claims?
900.207  How are non-medical related tort claims and lawsuits filed 
for IHS?
900.208  How are non-medical related tort claims and lawsuits filed 
for DOI?
900.209  What should a self-determination contractor or contractor's 
employee do on receiving a non-medical related tort claim?
900.210  If the contractor or contractor's employee receives a 
summons and/or complaint alleging a non-medical related tort covered 
by FTCA, what should an Indian tribe or tribal organization do?

Subpart N--Post-Award Contract Disputes

900.215  What does this subpart cover?
900.216  What other statutes and regulations apply to contract 
disputes?
900.217  Is filing a claim under the CDA our only option for 
resolving post-award contract disputes?
900.218  What is a claim under the CDA?
900.219  How does an Indian tribe, tribal organization, or Federal 
agency submit a claim?
900.220  Does it make a difference whether the claim is large or 
small?
900.221  What happens next?
900.222  What goes into a decision?
900.223  When does an Indian tribe or tribal organization get the 
decision?
900.224  What happens if the decision does not come within that 
time?
900.225   Does an Indian tribe or tribal organization get paid 
immediately if the awarding official decides in its favor?
900.226  What rules govern appeals of cost disallowances?
900.227  Can the awarding official change the decision after it has 
been made?
900.228  Is an Indian tribe or tribal organization entitled to 
interest if it wins its claim?
900.229  What role will the awarding official play during an appeal?
900.230  What is the effect of a pending appeal?

Subpart O--Conflicts of Interest

900.231  What is an organizational conflict of interest?
900.232  What must an Indian tribe or tribal organization do if an 
organizational conflict of interest arises under a contract?
900.233  When must an Indian tribe or tribal organization regulate 
its employees or subcontractors to avoid a personal conflict of 
interest?
900.234  What types of personal conflicts of interest involving 
tribal officers, employees or subcontractors would have to be 
regulated by an Indian tribe?
900.235  What personal conflicts of interest must the standards of 
conduct regulate?
900.236  May an Indian tribe elect to negotiate contract provisions 
on conflict of interest to take the place of this regulation?

Subpart P--Retrocession and Reassumption Procedures

900.240  What does retrocession mean?
900.241  Who may retrocede a contract, in whole or in part?
900.242  What is the effective date of retrocession?
900.243  What effect will an Indian tribe or tribal organization's 
retrocession have on its rights to contract?
900.244  Will an Indian tribe or tribal organization's retrocession 
adversely affect funding available for the retroceded program?
900.245  What obligation does the Indian tribe or tribal 
organization have with respect to returning property that was used 
in the operation of the retroceded program?
900.246  What does reassumption mean?
900.247  Under what circumstances is a reassumption considered an 
emergency instead of non-emergency reassumption?
900.248  In a non-emergency reassumption, what is the Secretary 
required to do?
900.249  What happens if the contractor fails to take corrective 
action to remedy the contract deficiencies identified in the notice?
900.250  What shall the second written notice include?
900.251  What is the earliest date on which the contract will be 
rescinded in a non-emergency reassumption?
900.252  In an emergency reassumption, what is the Secretary 
required to do?
900.253  What shall the written notice include?
900.254  May the contractor be reimbursed for actual and reasonable 
``wind up costs'' incurred after the effective date of rescission?
900.255  What obligation does the Indian tribe or tribal 
organization have with respect to returning property that was used 
in the operation of the rescinded contract?
900.256  Will a reassumption adversely affect funding available for 
the reassumed program?

    Authority: 25 U.S.C. 450f et seq.

Subpart A--General Provisions


Sec. 900.1   Authority.

    These regulations are prepared, issued, and maintained jointly by 
the Secretary of Health and Human Services and the Secretary of the 
Interior, with the active participation and representation of Indian 
tribes, tribal organizations, and individual tribal members pursuant to 
the guidance of the Negotiated Rulemaking procedures required by 
section 107 of the Indian Self-Determination and Education Assistance 
Act.


Sec. 900.2   Purpose and scope.

    (a) General. These regulations codify uniform and consistent rules 
for contracts by the Department of Health and Human Services (DHHS) and 
the Department of the Interior (DOI) in implementing title I of the 
Indian Self-Determination and Education Assistance Act, Public Law 93-
638, 25 U.S.C. 450 et seq., as amended and sections 1 through 9 
preceding that title.
    (b) Programs funded by other Departments and agencies. Included 
under this part are programs administered (under current or future law 
or interagency agreement) by the DHHS and the DOI for the benefit of 
Indians for which appropriations are made to other Federal agencies.
    (c) This part included in contracts by reference. Each contract, 
including grants and cooperative agreements in lieu of contracts 
awarded under section 9 of the Act, shall include by reference the 
provisions of this part, and any amendment thereto, and they are 
binding on the Secretary and the contractor except as otherwise 
specifically authorized by a waiver under section 107(e) of the Act.
    (d) Freedom of Information. Access to records maintained by the 
Secretary is governed by the Freedom of Information Act (5 U.S.C. 552) 
and other applicable

[[Page 32505]]

Federal law. Except for previously provided copies of tribal records 
that the Secretary demonstrates are clearly required to be maintained 
as part of the record keeping systems of the DHHS or the DOI, or both, 
records of the contractors (including archived records) shall not be 
considered Federal records for the purpose of the Freedom of 
Information Act. The Freedom of Information Act does not apply to 
records maintained solely by Indian tribes and tribal organizations.
    (e) Privacy Act. Section 108(b) of the Indian Self-Determination 
Act states that records of the tribal government or tribal 
organizations shall not be considered Federal records for the purposes 
of the Privacy Act.
    (f) Information Collection. The Office of Management and Budget has 
approved, under 44 U.S.C. chapter 35, the information collection 
requirements in Part 900 under assigned control number 1076-0136. The 
information for Part 900 is being collected and used by the Departments 
to determine applicant eligibility, evaluate applicant capabilities, 
protect the service population, safeguard Federal funds and other 
resources, and permit the Departments to administer and evaluate 
contract programs.


Sec. 900.3  Policy statements.

    (a) Congressional policy.
    (1) Congress has recognized the obligation of the United States to 
respond to the strong expression of the Indian people for self-
determination by assuring maximum Indian participation in the 
direction, planning, conduct and administration of educational as well 
as other Federal programs and services to Indian communities so as to 
render such programs and services more responsive to the needs and 
desires of those communities.
    (2) Congress has declared its commitment to the maintenance of the 
Federal Government's unique and continuing relationship with, and 
responsibility to, individual Indian tribes and to the Indian people as 
a whole through the establishment of a meaningful Indian self-
determination policy which will permit an orderly transition from the 
Federal domination of programs for, and services to, Indians to 
effective and meaningful participation by the Indian people in the 
planning, conduct, and administration of those programs and services. 
In accordance with this policy, the United States is committed to 
supporting and assisting Indian tribes in the development of strong and 
stable tribal governments, capable of administering quality programs 
and developing the economies of their respective communities.
    (3) Congress has declared that a major national goal of the United 
States is to provide the quantity and quality of educational services 
and opportunities which will permit Indian children to compete and 
excel in the life areas of their choice, and to achieve the measure of 
self-determination essential to their social and economic well-being.
    (4) Congress has declared that the programs, functions, services, 
or activities that are contracted and funded under this Act shall 
include administrative functions of the Department of the Interior and 
the Department of Health and Human Services (whichever is applicable) 
that support the delivery of services to Indians, including those 
administrative activities supportive of, but not included as part of, 
the service delivery programs described in this paragraph that are 
otherwise contractible. The administrative functions referred to in the 
preceding sentence shall be contractible without regard to the 
organizational level within the Department that carries out such 
functions. Contracting of the administrative functions described herein 
shall not be construed to limit or reduce in any way the funding for 
any program, function, service, or activity serving any other tribe 
under the Act or any other law. The Secretary is not required to reduce 
funding for programs, projects, or activities serving a tribe to make 
funds available to another Indian tribe or tribal organization under 
this Act.
    (5) Congress has further declared that each provision of the Act 
and each provision of contracts entered into thereunder shall be 
liberally construed for the benefit of the tribes or tribal 
organizations to transfer the funding and the related functions, 
services, activities, and programs (or portions thereof), that are 
otherwise contractible under the Act, including all related 
administrative functions, from the Federal government to the 
contractor.
    (6) Congress has declared that one of the primary goals of the 1994 
amendments to the Act was to minimize the reporting requirements 
applicable to tribal contractors and to eliminate excessive and 
burdensome reporting requirements. Reporting requirements over and 
above the annual audit report are to be negotiated with disagreements 
subject to the declination procedures of section 102 of the Act.
    (7) Congress has declared that there not be any threshold issues 
which would avoid the declination, contract review, approval, and 
appeal process.
    (8) Congress has declared that all self-determination contract 
proposals must be supported by the resolution of an Indian tribe(s).
    (9) Congress has declared that to the extent that programs, 
functions, services, and activities carried out by tribes and tribal 
organizations pursuant to contracts entered into under this Act reduce 
the administrative or other responsibilities of the Secretary with 
respect to the operation of Indian programs and result in savings that 
have not otherwise been included in the amount of contract funds 
determined under Section 106(a) of the Act, the Secretary shall make 
such savings available for the provision of additional services to 
program beneficiaries, either directly or through contractors, in a 
manner equitable to both direct and contracted programs.
    (b) Secretarial policy. (1) It is the policy of the Secretary to 
facilitate the efforts of Indian tribes and tribal organizations to 
plan, conduct and administer programs, functions, services and 
activities, or portions thereof, which the Departments are authorized 
to administer for the benefit of Indians because of their status as 
Indians. The Secretary shall make best efforts to remove any obstacles 
which might hinder Indian tribes and tribal organizations including 
obstacles that hinder tribal autonomy and flexibility in the 
administration of such programs.
    (2) It is the policy of the Secretary to encourage Indian tribes 
and tribal organizations to become increasingly knowledgeable about the 
Departments' programs administered for the benefit of Indians by 
providing information on such programs, functions and activities and 
the opportunities Indian tribes have regarding them.
    (3) It is the policy of the Secretary to provide a uniform and 
consistent set of rules for contracts under the Act. The rules 
contained herein are designed to facilitate and encourage Indian tribes 
to participate in the planning, conduct, and administration of those 
Federal programs serving Indian people. The Secretary shall afford 
Indian tribes and tribal organizations the flexibility, information, 
and discretion necessary to design contractible programs to meet the 
needs of their communities consistent with their diverse demographic, 
geographic, economic, cultural, health, social, religious and 
institutional needs.
    (4) The Secretary recognizes that contracting under the Act is an 
exercise by Indian tribes of the government-to-government relationship 
between the United States and the Indian tribes. When an Indian tribe 
contracts, there is a transfer of the responsibility with the

[[Page 32506]]

associated funding. The tribal contractor is accountable for managing 
the day-to-day operations of the contracted Federal programs, 
functions, services, and activities. The contracting tribe thereby 
accepts the responsibility and accountability to the beneficiaries 
under the contract with respect to use of the funds and the 
satisfactory performance of the programs, functions, services and 
activities funded under the contract. The Secretary will continue to 
discharge the trust responsibilities to protect and conserve the trust 
resources of Indian tribes and the trust resources of individual 
Indians.
    (5) The Secretary recognizes that tribal decisions to contract or 
not to contract are equal expressions of self-determination.
    (6) The Secretary shall maintain consultation with tribal 
governments and tribal organizations in the Secretary's budget process 
relating to programs, functions, services and activities subject to the 
Act. In addition, on an annual basis, the Secretary shall consult with, 
and solicit the participation of, Indian tribes and tribal 
organizations in the development of the budget for the Indian Health 
Service and the Bureau of Indian Affairs (including participation of 
Indian tribes and tribal organizations in formulating annual budget 
requests that the Secretary submits to the President for submission to 
Congress pursuant to section 1105 of title 31, United States Code).
    (7) The Secretary is committed to implementing and fully supporting 
the policy of Indian self-determination by recognizing and supporting 
the many positive and successful efforts and directions of tribal 
governments and extending the applicability of this policy to all 
operational components within the Department. By fully extending Indian 
self-determination contracting to all operational components within the 
Department having programs or portions of programs for the benefit of 
Indians under section 102(a)(1) (A) through (D) and for the benefit of 
Indians because of their status as Indians under section 102(a)(1)(E), 
it is the Secretary's intent to support and assist Indian tribes in the 
development of strong and stable tribal governments capable of 
administering quality programs that meet the tribally determined needs 
and directions of their respective communities. It is also the policy 
of the Secretary to have all other operational components within the 
Department work cooperatively with tribal governments on a government-
to-government basis so as to expedite the transition away from Federal 
domination of Indian programs and make the ideals of Indian self-
government and self-determination a reality.
    (8) It is the policy of the Secretary that the contractibility of 
programs under this Act should be encouraged. In this regard, Federal 
laws and regulations should be interpreted in a manner that will 
facilitate the inclusion of those programs or portions of those 
programs that are for the benefit of Indians under section 102(a)(1) 
(A) through (D) of the Act, and that are for the benefit of Indians 
because of their status of Indians under section 102(a)(1)(E) of the 
Act.
    (9) It is the Secretary's policy that no later than upon receipt of 
a contract proposal under the Act (or written notice of an Indian tribe 
or tribal organization's intention to contract), the Secretary shall 
commence planning such administrative actions, including but not 
limited to transfers or reductions in force, transfers of property, and 
transfers of contractible functions, as may be necessary to ensure a 
timely transfer of responsibilities and funding to Indian tribes and 
tribal organizations.
    (10) It is the policy of the Secretary to make available to Indian 
tribes and tribal organizations all administrative functions that may 
lawfully be contracted under the Act, employing methodologies 
consistent with the methodology employed with respect to such functions 
under titles III and IV of the Act.
    (11) The Secretary's commitment to Indian self-determination 
requires that these regulations be liberally construed for the benefit 
of Indian tribes and tribal organizations to effectuate the strong 
Federal policy of self-determination and, further, that any ambiguities 
herein be construed in favor of the Indian tribe or tribal organization 
so as to facilitate and enable the transfer of services, programs, 
functions, and activities, or portions thereof, authorized by the Act.


Sec. 900.4  Effect on existing tribal rights.

    Nothing in these regulations shall be construed as:
    (a) Affecting, modifying, diminishing, or otherwise impairing the 
sovereign immunity from suit enjoyed by Indian tribes;
    (b) Terminating, waiving, modifying, or reducing the trust 
responsibility of the United States to the Indian tribe(s) or 
individual Indians. The Secretary shall act in good faith in upholding 
this trust responsibility;
    (c) Mandating an Indian tribe to apply for a contract(s) or 
grant(s) as described in the Act; or
    (d) Impeding awards by other Departments and agencies of the United 
States to Indian tribes to administer Indian programs under any other 
applicable law.


Sec. 900.5  Effect of these regulations on Federal program guidelines, 
manual, or policy directives.

    Except as specifically provided in the Act, or as specified in 
Subpart J, an Indian tribe or tribal organization is not required to 
abide by any unpublished requirements such as program guidelines, 
manuals, or policy directives of the Secretary, unless otherwise agreed 
to by the Indian tribe or tribal organization and the Secretary, or 
otherwise required by law.

Subpart B--Definitions


Sec. 900.6  Definitions.

    Unless otherwise provided in this Part:
    Act means Secs. 1 through 9, and Title I of the Indian Self-
Determination and Education Assistance Act of 1975, Public Law 93-638, 
as amended.
    Annual funding agreement means a document that represents the 
negotiated agreement of the Secretary to fund, on an annual basis, the 
programs, services, activities and functions transferred to an Indian 
tribe or tribal organization under the Act.
    Appeal means a request by an Indian tribe or tribal organization 
for an administrative review of an adverse Agency decision.
    Awarding official means any person who by appointment or delegation 
in accordance with applicable regulations has the authority to enter 
into and administer contracts on behalf of the United States of America 
and make determinations and findings with respect thereto. Pursuant to 
the Act, this person can be any Federal official, including but not 
limited to, contracting officers.
    BIA means the Bureau of Indian Affairs of the Department of the 
Interior.
    Contract means a self-determination contract as defined in section 
4(j) of the Act.
    Contract appeals board means the Interior Board of Contract 
Appeals.
    Contractor means an Indian tribe or tribal organization to which a 
contract has been awarded.
    Days means calendar days; except where the last day of any time 
period specified in these regulations falls on a Saturday, Sunday, or a 
Federal holiday, the period shall carry over to the next business day 
unless otherwise prohibited by law.
    Department(s) means the Department of Health and Human Services 
(HHS) or the Department of the Interior (DOI), or both.

[[Page 32507]]

    IHS means the Indian Health Service of the Department of Health and 
Human Services.
    Indian means a person who is a member of an Indian Tribe.
    Indian tribe means any Indian tribe, band, nation, or other 
organized group, or community, including pueblos, rancherias, colonies 
and any Alaska Native Village, or regional or village corporation as 
defined in or established pursuant to the Alaska Native Claims 
Settlement Act, which is recognized as eligible for the special 
programs and services provided by the United States to Indians because 
of their status as Indians.
    Indirect cost rate means the rate(s) arrived at through negotiation 
between an Indian tribe or tribal organization and the appropriate 
Federal Agency.
    Indirect costs means costs incurred for a common or joint purpose 
benefiting more than one contract objective or which are not readily 
assignable to the contract objectives specifically benefitted without 
effort disproportionate to the results achieved.
    Initial contract proposal means a proposal for programs, functions, 
services, or activities that the Secretary is authorized to perform but 
which the Indian tribe or tribal organization is not now carrying out.
    Real property means any interest in land together with the 
improvements, structures, and fixtures and appurtenances thereto.
    Reassumption means rescission, in whole or in part, of a contract 
and assuming or resuming control or operation of the contracted program 
by the Secretary without consent of the Indian tribe or tribal 
organization pursuant to the notice and other procedures set forth in 
Subpart P.
    Retrocession means the voluntary return to the Secretary of a 
contracted program, in whole or in part, for any reason, before the 
expiration of the term of the contract.
    Secretary means the Secretary of Health and Human Services (HHS) or 
the Secretary of the Interior (DOI), or both (and their respective 
delegates).
    Tribal organization means the recognized governing body of any 
Indian tribe; any legally established organization of Indians which is 
controlled, sanctioned, or chartered by such governing body or which is 
democratically elected by the adult members of the Indian community to 
be served by such organization and which includes the maximum 
participation of Indians in all phases of its activities: provided, 
that, in any case where a contract is let or a grant made to an 
organization to perform services benefiting more than one Indian tribe, 
the approval of each such Indian tribe shall be a prerequisite to the 
letting or making of such contract or grant.
    Trust resources means an interest in land, water, minerals, funds, 
or other assets or property which is held by the United States in trust 
for an Indian tribe or an individual Indian or which is held by an 
Indian tribe or Indian subject to a restriction on alienation imposed 
by the United States.

Subpart C--Contract Proposal Contents


Sec. 900.7  What technical assistance is available to assist in 
preparing an initial contract proposal?

    The Secretary shall, upon request of an Indian tribe or tribal 
organization and subject to the availability of appropriations, provide 
technical assistance on a non-reimbursable basis to such Indian tribe 
or tribal organization to develop a new contract proposal or to provide 
for the assumption by the Indian tribe or tribal organization of any 
program, service, function, or activity (or portion thereof) that is 
contractible under the Act. The Secretary may also make a grant to an 
Indian tribe or tribal organization for the purpose of obtaining 
technical assistance, as provided in section 103 of the Act. An Indian 
tribe or tribal organization may also request reimbursement for pre-
award costs for obtaining technical assistance under sections 106(a) 
(2) and (5) of the Act.


Sec. 900.8  What must an initial contract proposal contain?

    An initial contract proposal must contain the following 
information:
    (a) The full name, address and telephone number of the Indian tribe 
or tribal organization proposing the contract.
    (b) If the tribal organization is not an Indian tribe, the proposal 
must also include:
    (1) a copy of the tribal organization's organizational documents 
(e.g., charter, articles of incorporation, bylaws, etc.).
    (2) The full name(s) of the Indian tribe(s) with which the tribal 
organization is affiliated.
    (c) The full name(s) of the Indian tribe(s) proposed to be served.
    (d) A copy of the authorizing resolution from the Indian tribe(s) 
to be served.
    (1) If an Indian tribe or tribal organization proposes to serve a 
specified geographic area, it must provide authorizing resolution(s) 
from all Indian tribes located within the specific area it proposes to 
serve. However, no resolution is required from an Indian tribe located 
outside the area proposed to be served whose members reside within the 
proposed service area.
    (2) If a currently effective authorizing resolution covering the 
scope of an initial contract proposal has already been provided to the 
agency receiving the proposal, a reference to that resolution.
    (e) The name, title, and signature of the authorized representative 
of the Indian tribe or tribal organization submitting the contract 
proposal.
    (f) The date of submission of the proposal.
    (g) A brief statement of the programs, functions, services, or 
activities that the tribal organization proposes to perform, including:
    (1) A description of the geographical service area, if applicable, 
to be served.
    (2) The estimated number of Indian people who will receive the 
benefits or services under the proposed contract.
    (3) An identification of any local, Area, regional, or national 
level departmental programs, functions, services, or activities to be 
contracted, including administrative functions.
    (4) A description of the proposed program standards;
    (5) An identification of the program reports, data and financial 
reports that the Indian tribe or tribal organization will provide, 
including their frequency.
    (6) A description of any proposed redesign of the programs, 
services, functions, or activities to be contracted,
    (7) Minimum staff qualifications proposed by the Indian tribe and 
tribal organization, if any; and
    (8) A statement that the Indian tribe or tribal organization will 
meet the minimum procurement, property and financial management 
standards set forth in Subpart F, subject to any waiver that may have 
been granted under Subpart K.
    (h) The amount of funds requested, including:
    (1) An identification of the funds requested by programs, 
functions, services, or activities, under section 106(a)(1) of the Act, 
including the Indian tribe or tribal organization's share of funds 
related to such programs, functions, services, or activities, if any, 
from any Departmental local, area, regional, or national level.
    (2) An identification of the amount of direct contract support 
costs, including one-time start-up or preaward costs under section 
106(a)(2) and related provisions of the Act, presented by major 
categories such as:
    (i) Personnel (differentiating between salary and fringe benefits);
    (ii) Equipment;
    (iii) Materials and supplies;

[[Page 32508]]

    (iv) Travel;
    (v) Subcontracts; and
    (vi) Other appropriate items of cost.
    (3) An identification of funds the Indian tribe or tribal 
organization requests to recover for indirect contract support costs. 
This funding request must include either:
    (i) a copy of the most recent negotiated indirect cost rate 
agreement; or
    (ii) an estimated amount requested for indirect costs, pending 
timely establishment of a rate or negotiation of administrative 
overhead costs.
    (4) To the extent not stated elsewhere in the budget or previously 
reported to the Secretary, any preaward costs, including the amount and 
time period covered or to be covered; and
    (5) At the option of the Indian tribe or tribal organization, an 
identification of programs, functions, services, or activities 
specified in the contract proposal which will be funded from sources 
other than the Secretary.
    (i) The proposed starting date and term of the contract.
    (j) In the case of a cooperative agreement, the nature and degree 
of Federal programmatic involvement anticipated during the term of the 
agreement.
    (k) The extent of any planned use of Federal personnel and Federal 
resources.
    (l) Any proposed waiver(s) of the regulations in this part; and
    (m) A statement that the Indian tribe or tribal organization will 
implement procedures appropriate to the programs, functions, services 
or activities proposed to be contracted, assuring the confidentiality 
of medical records and of information relating to the financial affairs 
of individual Indians obtained under the proposal contract, or as 
otherwise required by law.


Sec. 900.9  May the Secretary require an Indian tribe or tribal 
organization to submit any other information beyond that identified in 
Sec. 900.8?

    No.


Sec. 900.10  How does an Indian tribe or tribal organization secure a 
list of all Federal property currently in use in carrying out the 
programs, functions, services, or activities that benefit the Indian 
tribe or tribal organization to assist in negotiating a contract?

    The Indian tribe or tribal organization submits a written request 
to the Secretary. The Secretary shall provide the requested 
information, including the condition of the property, within 60 days.


Sec. 900.11  What should an Indian tribe or tribal organization that is 
proposing a contract do about specifying the Federal property that the 
Indian tribe or tribal organization may wish to use in carrying out the 
contract?

    The Indian tribe or tribal organization is encouraged to provide 
the Secretary, as early as possible, with:
    (a) A list of the following Federal property intended for use under 
the contract:
    (1) Equipment;
    (2) Furnishings;
    (3) Facilities; and
    (4) Other real and personal property.
    (b) A statement of how the Indian tribe or tribal organization will 
obtain each item by transfer of title under Sec. 105(f)(2) of the Act 
and section 1(b)(8) of the model agreement set forth in section 108(c) 
of the Act, through a temporary use permit, similar arrangement, or 
otherwise; and
    (c) Where equipment is to be shared by contracted and non-
contracted programs, services, functions, or activities, a proposal 
outlining proposed equipment sharing or other arrangements.


Sec. 900.12  Are the proposal contents requirements the same for 
renewal of a contract that is expiring and for securing an annual 
funding agreement after the first year of the funding agreement?

    No. In these situations, an Indian tribe or tribal organization 
should submit a renewal proposal (or notification of intent not to 
renew) or an annual funding agreement proposal at least 90 days before 
the expiration date of the contract or existing annual funding 
agreement. The proposal shall provide funding information in the same 
detail and format as the original proposal and may also identify any 
significant proposed changes.


Sec. 900.13  Does the contract proposal become part of the final 
contract?

    No, unless the parties agree.

Subpart D--Review and Approval of Contract Proposals


Sec. 900.14  What does this subpart cover?

    This Subpart covers any proposal to enter into a self-determination 
contract, to amend an existing self-determination contract, to renew an 
existing self-determination contract, or to redesign a program through 
a self-determination contract.


Sec. 900.15  What shall the Secretary do upon receiving a proposal?

    Upon receipt of a proposal, the Secretary shall:
    (a) Within two days notify the applicant in writing that the 
proposal has been received;
    (b) Within 15 days notify the applicant in writing of any missing 
items required by Sec. 900.8 and request that the items be submitted 
within 15 days of receipt of the notification; and
    (c) Review the proposal to determine whether there are declination 
issues under section 102(a)(2) of the Act.


Sec. 900.16  How long does the Secretary have to review and approve the 
proposal and award the contract, or decline a proposal?

    The Secretary has 90 days after receipt of a proposal to review and 
approve the proposal and award the contract or decline the proposal in 
compliance with section 102 of the Act and subpart E. At any time 
during the review period the Secretary may approve the proposal and 
award the requested contract.


Sec. 900.17  Can the statutory 90-day period be extended?

    Yes, with written consent of the Indian tribe or tribal 
organization. If consent is not given, the 90-day deadline applies.


Sec. 900.18  What happens if a proposal is not declined within 90 days 
after it is received by the Secretary?

    A proposal that is not declined within 90 days (or within any 
agreed extension under Sec. 900.17) is deemed approved and the 
Secretary shall award the contract or any amendment or renewal within 
that 90-day period and add to the contract the full amount of funds 
pursuant to Section 106(a) of the Act.


Sec. 900.19  What happens when a proposal is approved?

    Upon approval the Secretary shall award the contract and add to the 
contract the full amount of funds to which the contractor is entitled 
under section 106(a) of the Act.

Subpart E--Declination Procedures


Sec. 900.20  What does this Subpart cover?

    This subpart explains how and under what circumstances the 
Secretary may decline a proposal to contract, to amend an existing 
contract, to renew an existing contract, to redesign a program, or to 
waive any provisions of these regulations. For annual funding 
agreements, see Sec. 900.32.


Sec. 900.21  When can a proposal be declined?

    As explained in Secs. 900.16 and 900.17, a proposal can only be 
declined within 90 days after the Secretary receives the proposal, 
unless that period

[[Page 32509]]

is extended with the voluntary and express written consent of the 
Indian tribe or tribal organization.


Sec. 900.22  For what reasons can the Secretary decline a proposal?

    The Secretary may only decline to approve a proposal for one of 
five specific reasons:
    (a) The service to be rendered to the Indian beneficiaries of the 
particular program or function to be contracted will not be 
satisfactory;
    (b) Adequate protection of trust resources is not assured;
    (c) The proposed project or function to be contracted for cannot be 
properly completed or maintained by the proposed contract;
    (d) The amount of funds proposed under the contract is in excess of 
the applicable funding level for the contract, as determined under 
section 106(a) of the Act; or
    (e) The program, function, service, or activity (or a portion 
thereof) that is the subject of the proposal is beyond the scope of 
programs, functions, services, or activities covered under section 
102(a)(1) of the Act because the proposal includes activities that 
cannot lawfully be carried out by the contractor.


Sec. 900.23  Can the Secretary decline a proposal where the Secretary's 
objection can be overcome through the contract?

    No. The Secretary may not decline to enter into a contract with an 
Indian tribe or tribal organization based on any objection that will be 
overcome through the contract.


Sec. 900.24  Can a contract proposal for an Indian tribe or tribal 
organization's share of administrative programs, functions, services, 
and activities be declined for any reason other than the five reasons 
specified in Sec. 900.22?

    No. The Secretary may only decline a proposal based upon one or 
more of the five reasons listed above. If a contract affects the 
preexisting level of services to any other tribe, the Secretary shall 
address that effect in the Secretary's annual report to Congress under 
section 106(c)(6) of the Act.


Sec. 900.25  What if only a portion of a proposal raises one of the 
five declination criteria?

    The Secretary must approve any severable portion of a proposal that 
does not support a declination finding described in Sec. 900.20, 
subject to any alteration in the scope of the proposal that the 
Secretary and the Indian tribe or tribal organization approve.


Sec. 900.26  What happens if the Secretary declines a part of a 
proposal on the ground that the proposal proposes in part to plan, 
conduct, or administer a program, function, service or activity that is 
beyond the scope of programs covered under section 102(a) of the Act, 
or proposes a level of funding that is in excess of the applicable 
level determined under section 106(a) of the Act?

    In those situations the Secretary is required, as appropriate, to 
approve the portion of the program, function, service, or activity that 
is authorized under section 102(a) of the Act, or approve a level of 
funding that is authorized under section 106(a) of the Act. As noted in 
Sec. 900.25, the approval is subject to any alteration in the scope of 
the proposal that the Secretary and the Indian tribe or tribal 
organization approve.


Sec. 900.27  If an Indian tribe or tribal organization elects to 
contract for a severable portion of a proposal, does the Indian tribe 
or tribal organization lose its appeal rights to challenge the portion 
of the proposal that was declined?

    No, but the hearing and appeal procedures contained in these 
regulations only apply to the portion of the proposal that was 
declined.


Sec. 900.28  Is technical assistance available to an Indian tribe or 
tribal organization to avoid declination of a proposal?

    Yes. In accordance with section 103(d) of the Act, upon receiving a 
proposal, the Secretary shall provide any necessary requested technical 
assistance to an Indian tribe or tribal organization, and shall share 
all relevant information with the Indian tribe or tribal organization, 
in order to avoid declination of the proposal.


Sec. 900.29  What is the Secretary required to do if the Secretary 
decides to decline all or a portion of a proposal?

    If the Secretary decides to decline all or a severable portion of a 
proposal, the Secretary is required:
    (a) To advise the Indian tribe or tribal organization in writing of 
the Secretary's objections, including a specific finding that clearly 
demonstrates that (or that is supported by a controlling legal 
authority that) one of the conditions set forth in Sec. 900.22 exists, 
together with a detailed explanation of the reason for the decision to 
decline the proposal and, within 20 days, any documents relied on in 
making the decision; and
    (b) To advise the Indian tribe or tribal organization in writing of 
the rights described in Sec. 900.31.


Sec. 900.30  When the Secretary declines all or a portion of a 
proposal, is the Secretary required to provide an Indian tribe or 
tribal organization with technical assistance?

    Yes. The Secretary shall provide additional technical assistance to 
overcome the stated objections, in accordance with section 102(b) of 
the Act, and shall provide any necessary requested technical assistance 
to develop any modifications to overcome the Secretary's stated 
objections.


Sec. 900.31  When the Secretary declines all or a portion of a 
proposal, is an Indian tribe or tribal organization entitled to any 
appeal?

    Yes. The Indian tribe or tribal organization is entitled to an 
appeal on the objections raised by the Secretary, with an agency 
hearing on the record, and the right to engage in full discovery 
relevant to any issue raised in the matter. The procedures for appeals 
are in subpart L of these regulations. Alternatively, at its option the 
Indian tribe or tribal organization has the right to sue in Federal 
district court to challenge the Secretary's decision.


Sec. 900.32  Can the Secretary decline an Indian tribe or tribal 
organization's proposed successor annual funding agreement?

    No. If it is substantially the same as the prior annual funding 
agreement (except for funding increases included in appropriations acts 
or funding reductions as provided in section 106(b) of the Act) and the 
contract is with DHHS or the BIA, the Secretary shall approve and add 
to the contract the full amount of funds to which the contractor is 
entitled, and may not decline, any portion of a successor annual 
funding agreement. Any portion of an annual funding agreement proposal 
which is not substantially the same as that which was funded previously 
(e.g., a redesign proposal; waiver proposal; different proposed funding 
amount; or different program, service, function, or activity), or any 
annual funding agreement proposal which pertains to a contract with an 
agency of DOI other than the BIA, is subject to the declination 
criteria and procedures in subpart E. If there is a disagreement over 
the availability of appropriations, the Secretary may decline the 
proposal in part under the procedure in subpart E.


Sec. 900.33  Are all proposals to renew term contracts subject to the 
declination criteria?

    Department of Health and Human Services and the Bureau of Indian 
Affairs will not review the renewal of a term contract for declination 
issues where no material and substantial

[[Page 32510]]

change to the scope or funding of a program, functions, services, or 
activities has been proposed by the Indian tribe or tribal 
organization. Proposals to renew term contracts with DOI agencies other 
than the Bureau of Indian Affairs may be reviewed under the declination 
criteria.

Subpart F--Standards for Tribal or Tribal Organization Management 
Systems

General


Sec. 900.35  What is the purpose of this subpart?

    This subpart contains the minimum standards for the management 
systems used by Indian tribes or tribal organizations when carrying out 
self-determination contracts. It provides standards for an Indian tribe 
or tribal organization's financial management system, procurement 
management system, and property management system.


Sec. 900.36  What requirements are imposed upon Indian tribes or tribal 
organizations by this subpart?

    When carrying out self-determination contracts, Indian tribes and 
tribal organizations shall develop, implement, and maintain systems 
that meet these minimum standards, unless one or more of the standards 
have been waived, in whole or in part, under section 107(e) of the Act 
and Subpart K.


Sec. 900.37  What provisions of Office of Management and Budget (OMB) 
circulars or the ``common rule'' apply to self-determination contracts?

    The only provisions of OMB Circulars and the only provisions of the 
``common rule'' that apply to self-determination contracts are the 
provisions adopted in these regulations, those expressly required or 
modified by the Act, and those negotiated and agreed to in a self-
determination contract.


Sec. 900.38  Do these standards apply to the subcontractors of an 
Indian tribe or tribal organization carrying out a self-determination 
contract?

    An Indian tribe or tribal organization may require that some or all 
of the standards in this subpart be imposed upon its subcontractors 
when carrying out a self-determination contract.


Sec. 900.39  What is the difference between a standard and a system?

    (a) Standards are the minimum baseline requirements for the 
performance of an activity. Standards establish the ``what'' that an 
activity should accomplish.
    (b) Systems are the procedural mechanisms and processes for the 
day-to-day conduct of an activity. Systems are ``how'' the activity 
will be accomplished.


Sec. 900.40  When are Indian tribe or tribal organization management 
standards and management systems evaluated?

    (a) Management standards are evaluated by the Secretary when the 
Indian tribe or tribal organization submits an initial contract 
proposal.
    (b) Management systems are evaluated by an independent auditor 
through the annual single agency audit report that is required by the 
Act and OMB Circular A-128.


Sec. 900.41  How long must an Indian tribe or tribal organization keep 
management system records?

    The Indian tribe or tribal organization must retain financial, 
procurement and property records for the minimum periods described 
below. Electronic, magnetic or photographic records may be substituted 
for hard copies.
    (a) Financial records. Financial records include documentation of 
supporting costs incurred under the contract. These records must be 
retained for three years from the date of submission of the single 
audit report to the Secretary.
    (b) Procurement records. Procurement records include solicitations, 
purchase orders, contracts, payment histories and records applicable of 
significant decisions. These records must be retained for three years 
after the Indian tribe or tribal organization or subcontractors make 
final payment and all other pending matters are closed.
    (c) Property management records. Property management records of 
real and personal property transactions must be retained for three 
years from the date of disposition, replacement, or transfer.
    (d) Litigation, audit exceptions and claims. Records pertaining to 
any litigation, audit exceptions or claims requiring management systems 
data must be retained until the action has been completed.

Standards for Financial Management Systems


Sec. 900.42  What are the general financial management system standards 
that apply to an Indian tribe carrying out a self-determination 
contract?

    An Indian tribe shall expend and account for contract funds in 
accordance with all applicable tribal laws, regulations, and 
procedures.


Sec. 900.43  What are the general financial management system standards 
that apply to a tribal organization carrying out a self-determination 
contract?

    A tribal organization shall expend and account for contract funds 
in accordance with the procedures of the tribal organization.


Sec. 900.44  What minimum general standards apply to all Indian tribe 
or tribal organization financial management systems when carrying out a 
self-determination contract?

    The fiscal control and accounting procedures of an Indian tribe or 
tribal organization shall be sufficient to:
    (a) Permit preparation of reports required by a self-determination 
contract and the Act; and
    (b) Permit the tracing of contract funds to a level of expenditure 
adequate to establish that they have not been used in violation of any 
restrictions or prohibitions contained in any statute that applies to 
the self-determination contract.


Sec. 900.45  What specific minimum requirements shall an Indian tribe 
or tribal organization's financial management system contain to meet 
these standards?

    An Indian tribe or tribal organization's financial management 
system shall include provisions for the following seven elements.
    (a) Financial reports. The financial management system shall 
provide for accurate, current, and complete disclosure of the financial 
results of self-determination contract activities. This includes 
providing the Secretary a completed Financial Status Report, SF 269A, 
as negotiated and agreed to in the self-determination contract.
    (b) Accounting records. The financial management system shall 
maintain records sufficiently detailed to identify the source and 
application of self-determination contract funds received by the Indian 
tribe or tribal organization. The system shall contain sufficient 
information to identify contract awards, obligations and unobligated 
balances, assets, liabilities, outlays, or expenditures and income.
    (c) Internal controls. The financial management system shall 
maintain effective control and accountability for all self-
determination contract funds received and for all Federal real 
property, personal property, and other assets furnished for use by the 
Indian tribe or tribal organization under the self-determination 
contract.
    (d) Budget controls. The financial management system shall permit 
the comparison of actual expenditures or outlays with the amounts 
budgeted by

[[Page 32511]]

the Indian tribe or tribal organization for each self-determination 
contract.
    (e) Allowable costs. The financial management system shall be 
sufficient to determine the reasonableness, allowability, and 
allocability of self-determination contract costs based upon the terms 
of the self-determination contract and the Indian tribe or tribal 
organization's applicable OMB cost principles, as amended by the Act 
and these regulations. (The following chart lists certain OMB Circulars 
and suggests the entities that may use each, but the final selection of 
the applicable circular may differ from those shown, as agreed to by 
the Indian tribe or tribal organization and the Secretary. Agreements 
between an Indian tribe or tribal organization and the Secretary 
currently in place do not require renegotiation.) Copies of these 
circulars are available from the Executive Office of the President, 
Publications Service, 725 17th Street N. W., Washington, D. C. 20503.

------------------------------------------------------------------------
       Type of tribal organization         Applicable OMB cost circular 
------------------------------------------------------------------------
Tribal Government.......................  A-87, ``Cost Principles for   
                                           State, Local and Indian      
                                           Tribal Governments.''        
Tribal private non-profit other than:     A-122, ``Cost Principles for  
 (1) an institution of higher education,   Non-Profit Organizations.''  
 (2) a hospital, or (3) an organization                                 
 named in OMB Circular A-122 as not                                     
 subject to that circular.                                              
Tribal educational institution..........  A-21, ``Cost Principles for   
                                           Educational Institutions.''  
------------------------------------------------------------------------

    (f) Source documentation. The financial management system shall 
contain accounting records that are supported by source documentation, 
e.g., canceled checks, paid bills, payroll records, time and attendance 
records, contract award documents, purchase orders, and other primary 
records that support self-determination contract fund expenditures.
    (g) Cash management. The financial management system shall provide 
for accurate, current, and complete disclosure of cash revenues 
disbursements, cash-on-hand balances, and obligations by source and 
application for each Indian tribe or tribal organization, and 
subcontractor if applicable, so that complete and accurate cash 
transactions may be prepared as required by the self-determination 
contract.


Sec. 900.46   What requirements are imposed upon the Secretary for 
financial management by these standards?

    The Secretary shall establish procedures, consistent with Treasury 
regulations as modified by the Act, for the transfer of funds from the 
United States to the Indian tribe or tribal organization in strict 
compliance with the self-determination contract and the annual funding 
agreement.

Procurement Management System Standards


Sec. 900.47   When procuring property or services with self-
determination contract funds, can an Indian tribe or tribal 
organization follow the same procurement policies and procedures 
applicable to other Indian tribe or tribal organization funds?

    Indian tribes and tribal organizations shall have standards that 
conform to the standards in this Subpart. If the Indian tribe or tribal 
organization relies upon standards different than those described 
below, it shall identify the standards it will use as a proposed waiver 
in the initial contract proposal or as a waiver request to an existing 
contract.


Sec. 900.48   If the Indian tribe or tribal organization does not 
propose different standards, what basic standards shall the Indian 
tribe or tribal organization follow?

    (a) The Indian tribe or tribal organization shall ensure that its 
vendors and/or subcontractors perform in accordance with the terms, 
conditions, and specifications of their contracts or purchase orders.
    (b) The Indian tribe or tribal organization shall maintain written 
standards of conduct governing the performance of its employees who 
award and administer contracts.
    (1) No employee, officer, elected official, or agent of the Indian 
tribe or tribal organization shall participate in the selection, award, 
or administration of a procurement supported by Federal funds if a 
conflict of interest, real or apparent, would be involved.
    (2) An employee, officer, elected official, or agent of an Indian 
tribe or tribal organization, or of a subcontractor of the Indian tribe 
or tribal organization, is not allowed to solicit or accept gratuities, 
favors, or anything of monetary value from contractors, potential 
contractors, or parties to sub-agreements, with the following 
exemptions. The Indian tribe or tribal organization may exempt a 
financial interest that is not substantial or a gift that is an 
unsolicited item of nominal value.
    (3) These standards shall also provide for penalties, sanctions, or 
other disciplinary actions for violations of the standards.
    (c) The Indian tribe or tribal organization shall review proposed 
procurements to avoid buying unnecessary or duplicative items and 
ensure the reasonableness of the price. The Indian tribe or tribal 
organization should consider consolidating or breaking out procurement 
to obtain more economical purchases. Where appropriate, the Indian 
tribe or tribal organization shall compare leasing and purchasing 
alternatives to determine which is more economical.
    (d) The Indian tribe or tribal organization shall conduct all major 
procurement transactions by providing full and open competition, to the 
extent necessary to assure efficient expenditure of contract funds and 
to the extent feasible in the local area.
    (1) Indian tribes or tribal organizations shall develop their own 
definition for ``major procurement transactions.''
    (2) As provided in sections 7 (b) and (c) of the Act, Indian 
preference and tribal preferences shall be applied in any procurement 
award.
    (e) The Indian tribe or tribal organization shall make procurement 
awards only to responsible entities who have the ability to perform 
successfully under the terms and conditions of the proposed 
procurement. In making this judgment, the Indian tribe or tribal 
organization will consider such matters as the contractor's integrity, 
its compliance with public policy, its record of past performance, and 
its financial and technical resources.
    (f) The Indian tribe or tribal organization shall maintain records 
on the significant history of all major procurement transactions. These 
records may include, but are not limited to, the rationale for the 
method of procurement, the selection of contract type, the contract 
selection or rejection, and the basis for the contract price.
    (g) The Indian tribe or tribal organization is solely responsible, 
using good administrative practice and sound business judgment, for 
processing and settling all contractual and administrative issues 
arising out of a procurement. These issues include, but

[[Page 32512]]

are not limited to, source evaluation, protests, disputes, and claims.
    (1) The settlement of any protest, dispute, or claim shall not 
relieve the Indian tribe or tribal organization of any obligations 
under a self-determination contract.
    (2) Violations of law shall be referred to the tribal or Federal 
authority having proper jurisdiction.


Sec. 900.49   What procurement standards apply to subcontracts?

    Each subcontract entered into under the Act shall at a minimum:
    (a) Be in writing;
    (b) Identify the interested parties, their authorities, and the 
purposes of the contract;
    (c) State the work to be performed under the contract;
    (d) State the process for making any claim, the payments to be 
made, and the terms of the contract, which shall be fixed; and
    (e) Be subject to sections 7 (b) and (c) of the Act.


Sec. 900.50   What Federal laws, regulations, and Executive Orders 
apply to subcontractors?

    Certain provisions of the Act as well as other applicable Federal 
laws, regulations, and Executive Orders apply to subcontracts awarded 
under self-determination contracts. As a result, subcontracts should 
contain a provision informing the recipient that their award is funded 
with Indian Self-Determination Act funds and that the recipient is 
responsible for identifying and ensuring compliance with applicable 
Federal laws, regulations, and Executive Orders. The Secretary and the 
Indian tribe or tribal organization may, through negotiation, identify 
all or a portion of such requirements in the self-determination 
contract and, if so identified, these requirements should be identified 
in subcontracts.

Property Management System Standards


Sec. 900.51   What is an Indian tribe or tribal organization's property 
management system expected to do?

    An Indian tribe or tribal organization's property management system 
shall account for all property furnished or transferred by the 
Secretary for use under a self-determination contract or acquired with 
contract funds. The property management system shall contain 
requirements for the use, care, maintenance, and disposition of 
Federally-owned and other property as follows:
    (a) Where title vests in the Indian tribe, in accordance with 
tribal law and procedures; or
    (b) In the case of a tribal organization, according to the internal 
property procedures of the tribal organization.


Sec. 900.52   What type of property is the property management system 
required to track?

    The property management system of the Indian tribe or tribal 
organization shall track:
    (a) Personal property with an acquisition value in excess of $5,000 
per item;
    (b) Sensitive personal property, which is all personal property 
that is subject to theft and pilferage, as defined by the Indian tribe 
or tribal organization. All firearms shall be considered sensitive 
personal property; and
    (c) Real property provided by the Secretary for use under the 
contract.


Sec. 900.53   What kind of records shall the property management system 
maintain?

    The property management system shall maintain records that 
accurately describe the property, including any serial number or other 
identification number. These records should contain information such as 
the source, titleholder, acquisition date, cost, share of Federal 
participation in the cost, location, use and condition of the property, 
and the date of disposal and sale price, if any.


Sec. 900.54   Should the property management system prescribe internal 
controls?

    Yes. Effective internal controls should include procedures:
    (a) For the conduct of periodic inventories;
    (b) To prevent loss or damage to property; and
    (c) To ensure that property is used for an Indian tribe or tribal 
organization's self-determination contract(s) until the property is 
declared excess to the needs of the contract consistent with the Indian 
tribe or tribal organization's property management system.


Sec. 900.55   What are the standards for inventories?

    A physical inventory should be conducted at least once every 2 
years. The results of the inventory shall be reconciled with the Indian 
tribe or tribal organization's internal property and accounting 
records.


Sec. 900.56   What maintenance is required for property?

    Required maintenance includes the performance of actions necessary 
to keep the property in good working condition, the procedures 
recommended by equipment manufacturers, and steps necessary to protect 
the interests of the contractor and the Secretary in any express 
warranties or guarantees covering the property.


Sec. 900.57   What if the Indian tribe or tribal organization chooses 
not to take title to property furnished or acquired under the contract?

    If the Indian tribe or tribal organization chooses not to take 
title to property furnished by the government or acquired with contract 
funds, title to the property remains vested in the Secretary. A list of 
Federally-owned property to be used under the contract shall be 
included in the contract.


Sec. 900.58   Do the same accountability and control procedures 
described above apply to Federal property?

    Yes, except that requirements for the inventory and disposal of 
Federal property are different.


Sec. 900.59   How are the inventory requirements for Federal property 
different than for tribal property?

    There are three additional requirements:
    (a) The Indian tribe or tribal organization shall conduct a 
physical inventory of the Federally-owned property and reconcile the 
results with the Indian tribe or tribal organization's property records 
annually, rather than every 2 years;
    (b) Within 90 days following the end of an annual funding 
agreement, the Indian tribe or tribal organization shall certify and 
submit to the Secretary an annual inventory of all Federally-owned real 
and personal property used in the contracted program; and
    (c) The inventory shall report any increase or decrease of $5,000 
or more in the value of any item of real property.


Sec. 900.60   How does an Indian tribe or tribal organization dispose 
of Federal personal property?

    The Indian tribe or tribal organization shall report to the 
Secretary in writing any Federally-owned personal property that is worn 
out, lost, stolen, damaged beyond repair, or no longer needed for the 
performance of the contract.
    (a) The Indian tribe or tribal organization shall state whether the 
Indian tribe or tribal organization wants to dispose of or return the 
property.
    (b) If the Secretary does not respond within 60 days, the Indian 
tribe or tribal organization may return the property to the Secretary, 
who shall accept transfer, custody, control, and responsibility for the 
property (together with all associated costs).

[[Page 32513]]

Subpart G--Programmatic Reports and Data Requirements


Sec. 900.65   What programmatic reports and data shall the Indian tribe 
or tribal organization provide?

    Unless required by statute, there are no mandatory reporting 
requirements. Each Indian tribe or tribal organization shall negotiate 
with the Secretary the type and frequency of program narrative and 
program data report(s) which respond to the needs of the contracting 
parties and that are appropriate for the purposes of the contract. The 
extent of available resources will be a consideration in the 
negotiations.


Sec. 900.66   What happens if the Indian tribe or tribal organization 
and the Secretary cannot come to an agreement concerning the type and/
or frequency of program narrative and/or program data report(s)?

    Any disagreements over reporting requirements are subject to the 
declination criteria and procedures in section 102 of the Act and 
subpart E.


Sec. 900.67   Will there be a uniform data set for all IHS programs?

    IHS will work with Indian tribe or tribal organization 
representatives to develop a mutually defined uniform subset of data 
that is consistent with Congressional intent, imposes a minimal 
reporting burden, and which responds to the needs of the contracting 
parties.


Sec. 900.68   Will this uniform data set be required of all Indian 
tribe or tribal organizations contracting with the IHS under the Act?

    No. The uniform data set, applicable to the services to be 
performed, will serve as the target for the Secretary and the Indian 
tribes or tribal organizations during individual negotiations on 
program data reporting requirements.

Subpart H--Lease of Tribally-Owned Buildings by the Secretary


Sec. 900.69   What is the purpose of this subpart?

    Section 105(l) of the Act requires the Secretary, at the request of 
an Indian tribe or tribal organization, to enter into a lease with the 
Indian tribe or tribal organization for a building owned or leased by 
the tribe or tribal organization that is used for administration or 
delivery of services under the Act. The lease is to include 
compensation as provided in the statute as well as ``such other 
reasonable expenses that the Secretary determines, by regulation, to be 
allowable.'' This subpart contains requirements for these leases.


Sec. 900.70   What elements are included in the compensation for a 
lease entered into between the Secretary and an Indian tribe or tribal 
organization for a building owned or leased by the Indian tribe or 
tribal organization that is used for administration or delivery of 
services under the Act?

    To the extent that no element is duplicative, the following 
elements may be included in the lease compensation:
    (a) Rent (sublease);
    (b) Depreciation and use allowance based on the useful life of the 
facility based on acquisition costs not financed with Federal funds;
    (c) Contributions to a reserve for replacement of facilities;
    (d) Principal and interest paid or accrued;
    (e) Operation and maintenance expenses, to the extent not otherwise 
included in rent or use allowances, including, but not limited to, the 
following:
    (1) Water, sewage;
    (2) Utilities;
    (3) Fuel;
    (4) Insurance;
    (5) Building management supervision and custodial services;
    (6) Custodial and maintenance supplies;
    (7) Pest control;
    (8) Site maintenance (including snow and mud removal);
    (9) Trash and waste removal and disposal;
    (10) Fire protection/fire fighting services and equipment;
    (11) Monitoring and preventive maintenance of building structures 
and systems, including but not limited to:
    (i) Heating/ventilation/air conditioning;
    (ii) Plumbing;
    (iii) Electrical;
    (iv) Elevators;
    (v) Boilers;
    (vi) Fire safety system;
    (vii) Security system; and
    (viii) Roof, foundation, walls, floors.
    (12) Unscheduled maintenance;
    (13) Scheduled maintenance (including replacement of floor 
coverings, lighting fixtures, repainting);
    (14) Security services;
    (15) Management fees; and
    (16) Other reasonable and necessary operation or maintenance costs 
justified by the contractor;
    (f) Repairs to buildings and equipment;
    (g) Alterations needed to meet contract requirements;
    (h) Other reasonable expenses; and
    (i) The fair market rental for buildings or portions of buildings 
and land, exclusive of the Federal share of building construction or 
acquisition costs, or the fair market rental for buildings constructed 
with Federal funds exclusive of fee or profit, and for land.


Sec. 900.71   What type of reserve fund is anticipated for funds 
deposited into a reserve for replacement of facilities as specified in 
Sec. 900.70(c)?

    Reserve funds must be accounted for as a capital project fund or a 
special revenue fund.


Sec. 900.72   Who is the guardian of the fund and may the funds be 
invested?

    (a) The Indian tribe or tribal organization is the guardian of the 
fund.
    (b) Funds may be invested in accordance with the laws, regulations 
and policies of the Indian tribe or tribal organization subject to the 
terms of the lease or the self-determination contract.


Sec. 900.73   Is a lease with the Secretary the only method available 
to recover the types of cost described in Sec. 900.70?

    No. With the exception of paragraph (i) in Sec. 900.70, the same 
types of costs may be recovered in whole or in part under section 
106(a) of the Act as direct or indirect charges to a self-determination 
contract.


Sec. 900.74   How may an Indian tribe or tribal organization propose a 
lease to be compensated for the use of facilities?

    There are three options available:
    (a) The lease may be based on fair market rental.
    (b) The lease may be based on a combination of fair market rental 
and paragraphs (a) through (h) of Sec. 900.70, provided that no element 
of expense is duplicated in fair market rental.
    (c) The lease may be based on paragraphs (a) through (h) of 
Sec. 900.70 only.

Subpart I--Property Donation Procedures

General


Sec. 900.85   What is the purpose of this subpart?

    This subpart implements section 105(f) of the Act regarding 
donation of Federal excess and surplus property to Indian tribes or 
tribal organizations and acquisition of property with funds provided 
under a self-determination contract or grant.


Sec. 900.86   How will the Secretary exercise discretion to acquire and 
donate BIA or IHS excess property and excess and surplus Federal 
property to an Indian tribe or tribal organization?

    The Secretary will exercise discretion in a way that gives maximum 
effect to the requests of Indian tribes or tribal organizations for 
donation of BIA or IHS

[[Page 32514]]

excess property and excess or surplus Federal property, provided that 
the requesting Indian tribe or tribal organization shall state how the 
requested property is appropriate for use for any purpose for which a 
self-determination contract or grant is authorized.

Government-Furnished Property


Sec. 900.87   How does an Indian tribe or tribal organization obtain 
title to property furnished by the Federal government for use in the 
performance of a contract or grant agreement pursuant to section 
105(f)(2)(A) of the Act?

    (a) For government-furnished personal property made available to an 
Indian tribe or tribal organization before October 25, 1994:
    (1) The Secretary, in consultation with each Indian tribe or tribal 
organization, shall develop a list of the property used in a self-
determination contract.
    (2) The Indian tribe or tribal organization shall indicate any 
items on the list to which the Indian tribe or tribal organization 
wants the Secretary to retain title.
    (3) The Secretary shall provide the Indian tribe or tribal 
organization with any documentation needed to transfer title to the 
remaining listed property to the Indian tribe or tribal organization.
    (b) For government-furnished real property made available to an 
Indian tribe or tribal organization before October 25, 1994:
    (1) The Secretary, in consultation with the Indian tribe or tribal 
organization, shall develop a list of the property furnished for use in 
a self-determination contract.
    (2) The Secretary shall inspect any real property on the list to 
determine the presence of any hazardous substance activity, as defined 
in 41 CFR 101-47.202.2(b)(10). If the Indian tribe or tribal 
organization desires to take title to any real property on the list, 
the Indian tribe or tribal organization shall inform the Secretary, who 
shall take such steps as necessary to transfer title to the Indian 
tribe or tribal organization.
    (c) For government-furnished real and personal property made 
available to an Indian tribe or tribal organization on or after October 
25, 1994:
    (1) The Indian tribe or tribal organization shall take title to all 
property unless the Indian tribe or tribal organization requests that 
the United States retain the title.
    (2) The Secretary shall determine the presence of any hazardous 
substance activity, as defined in 41 CFR 101-47.202.2(b)(10).


Sec. 900.88   What should the Indian tribe or tribal organization do if 
it wants to obtain title to government-furnished real property that 
includes land not already held in trust?

    If the land is owned by the United States but not held in trust for 
an Indian tribe or individual Indian, the Indian tribe or tribal 
organization shall specify whether it wants to acquire fee title to the 
land or whether it wants the land to be held in trust for the benefit 
of a tribe.
    (a) If the Indian tribe or tribal organization requests fee title, 
the Secretary shall take the necessary action under Federal law and 
regulations to transfer fee title.
    (b) If the Indian tribe or tribal organization requests beneficial 
ownership with fee title to be held by the United States in trust for 
an Indian tribe:
    (1) The Indian tribe or tribal organization shall submit with its 
request a resolution of support from the governing body of the Indian 
tribe in which the beneficial ownership is to be registered.
    (2) If the request is submitted to the Secretary of Health and 
Human Services for land under the jurisdiction of that Secretary, the 
Secretary shall take all necessary steps to effect a transfer of the 
land to the Secretary of the Interior and shall also forward the Indian 
tribe or tribal organization's request and the tribe's resolution.
    (3) The Secretary of the Interior shall expeditiously process all 
requests in accordance with applicable Federal law and regulations.
    (4) The Secretary shall not require the Indian tribe or tribal 
organization to furnish any information in support of a request other 
than that required by law or regulation.


Sec. 900.89   When may the Secretary elect to reacquire government-
furnished property whose title has been transferred to an Indian tribe 
or tribal organization?

    (a) Except as provided in paragraph (b) of this section, when a 
self-determination contract or grant agreement, or portion thereof, is 
retroceded, reassumed, terminated, or expires, the Secretary shall have 
the option to take title to any item of government-furnished property:
    (1) That title has been transferred to an Indian tribe or tribal 
organization;
    (2) That is still in use in the program; and
    (3) That has a current fair market value, less the cost of 
improvements borne by the Indian tribe or tribal organization in excess 
of $5,000.
    (b) If property referred to in paragraph (a) of this section is 
shared between one or more ongoing contracts or grant agreements and a 
contract or grant agreement that is retroceded, reassumed, terminated 
or expires and the Secretary wishes to use such property in the 
retroceded or reassumed program, the Secretary and the contractor or 
grantee using such property shall negotiate an acceptable arrangement 
for continued sharing of such property and for the retention or 
transfer of title.


Sec. 900.90   Does government-furnished real property to which an 
Indian tribe or tribal organization has taken title continue to be 
eligible for facilities operation and maintenance funding from the 
Secretary?

    Yes.

Contractor-Purchased Property


Sec. 900.91   Who takes title to property purchased with funds under a 
self-determination contract or grant agreement pursuant to section 
105(f)(2)(A) of the Act?

    The contractor takes title to such property, unless the contractor 
chooses to have the United States take title. In that event, the 
contractor must inform the Secretary of the purchase and identify the 
property and its location in such manner as the contractor and the 
Secretary deem necessary. A request for the United States to take title 
to any item of contractor-purchased property may be made at any time. A 
request for the Secretary to take fee title to real property shall be 
expeditiously processed in accordance with applicable Federal law and 
regulation.


Sec. 900.92   What should the Indian tribe or tribal organization do if 
it wants contractor-purchased real property to be taken into trust?

    The contractor shall submit a resolution of support from the 
governing body of the Indian tribe in which the beneficial ownership is 
to be registered. If the request to take contractor-purchased real 
property into trust is submitted to the Secretary of Health and Human 
Services, that Secretary shall transfer the request to the Secretary of 
the Interior. The Secretary of the Interior shall expeditiously process 
all requests in accord with applicable Federal law and regulation.


Sec. 900.93   When may the Secretary elect to acquire title to 
contractor-purchased property?

    (a) Except as provided in paragraph (b) of this section when a 
self-determination contract or grant agreement, or portion thereof, is 
retroceded, reassumed, terminated, or expires, the Secretary shall have 
the option to take title to any item of government-furnished property:

[[Page 32515]]

    (1) Whose title has been transferred to an Indian tribe or tribal 
organization;
    (2) That is still in use in the program; and
    (3) That has a current fair market value, less the cost of 
improvements borne by the Indian tribe or tribal organization, in 
excess of $5,000.
    (b) If property referred to in paragraph (a) of this section is 
shared between one or more ongoing contracts or grant agreements and a 
contract or grant agreement that is retroceded, reassumed, terminated 
or expires and the Secretary wishes to use such property in the 
retroceded or reassumed program, the Secretary and the contractor or 
grantee using such property shall negotiate an acceptable arrangement 
for continued sharing of such property and for the retention or 
transfer of title.


Sec. 900.94   Is contractor-purchased real property to which an Indian 
tribe or tribal organization holds title eligible for facilities 
operation and maintenance funding from the Secretary?

    Yes.

BIA and IHS Excess Property


Sec. 900.95  What is BIA or IHS excess property?

    BIA or IHS excess property means property under the jurisdiction of 
the BIA or IHS that is excess to the agency's needs and the discharge 
of its responsibilities.


Sec. 900.96  How can Indian tribes or tribal organizations learn about 
BIA and IHS excess property?

    The Secretary shall not less than annually send to Indian tribes 
and tribal organizations a listing of all excess BIA or IHS personal 
property before reporting the property to GSA or to any other Federal 
agency as excess. The listing shall identify the agency official to 
whom a request for donation shall be submitted.


Sec. 900.97  How can an Indian tribe or tribal organization acquire 
excess BIA or IHS property?

    (a) The Indian tribe or tribal organization shall submit to the 
appropriate Secretary a request for specific property that includes a 
statement of how the property is intended for use in connection with a 
self-determination contract or grant. The Secretary shall expeditiously 
process the request and shall exercise discretion in a way that gives 
maximum effect to the request of Indian tribes or tribal organizations 
for the donation of excess BIA or IHS property.
    (b) If more than one request for the same item of personal property 
is submitted, the Secretary shall award the item to the requestor whose 
request is received on the earliest date. If two or more requests are 
received on the same date, the Secretary shall award the item to the 
requestor with the lowest transportation costs. The Secretary shall 
make the donation as expeditiously as possible.
    (c) If more than one request for the same parcel of real property 
is submitted, the Secretary shall award the property to the Indian 
tribe or tribal organization whose reservation or trust land is closest 
to the real property requested.


Sec. 900.98  Who takes title to excess BIA or IHS property donated to 
an Indian tribe or tribal organization?

    The Indian tribe or tribal organization takes title to donated 
excess BIA or IHS property. The Secretary shall provide the Indian 
tribe or tribal organization with all documentation needed to vest 
title in the Indian tribe or tribal organization.


Sec. 900.99  Who takes title to any land that is part of excess BIA or 
IHS real property donated to an Indian tribe or tribal organization?

    (a) If an Indian tribe or tribal organization requests donation of 
fee title to excess real property that includes land not held in trust 
for an Indian tribe, the Indian tribe or tribal organization shall so 
specify in its request for donation. The Secretary shall take the 
necessary action under Federal law and regulations to transfer the 
title to the Indian tribe or tribal organization.
    (b) If an Indian tribe or tribal organization asks the Secretary to 
donate excess real property that includes land and requests that fee 
title to the land be held by the United States in trust for an Indian 
tribe, the requestor shall submit a resolution of support from the 
governing body of the Indian tribe in which the beneficial ownership is 
to be registered.
    (1) If the donation request is submitted to the Secretary of Health 
and Human Services, that Secretary shall take all steps necessary to 
transfer the land to the Secretary of the Interior with the Indian 
tribe or tribal organization's request and the Indian tribe's 
resolution. The Secretary of the Interior shall expeditiously process 
all requests in accordance with applicable Federal law and regulations.
    (2) The Secretary shall not require the Indian tribe or tribal 
organization to furnish any information in support of a request other 
than that required by law or regulation.


Sec. 900.100  May the Secretary elect to reacquire excess BIA or IHS 
property whose title has been transferred to an Indian tribe or tribal 
organization?

    Yes. When a self-determination contract or grant agreement, or 
portion-- thereof, is retroceded, reassumed, terminated, or expires, 
the Secretary shall have the option to take title to any item of the 
property;
    (a) Except as provided in paragraph (b) of this section when a 
self-determination contract or grant agreement, or portion thereof, is 
retroceded, reassumed, terminated, or expires, the Secretary shall have 
the option to take title to any item of government-furnished property:
    (1) Whose title has been transferred to an Indian tribe or tribal 
organization;
    (2) That is still in use in the program; and
    (3) That has a current fair market value, less the cost of 
improvements borne by the Indian tribe or tribal organization, in 
excess of $5,000.
    (b) To the extent that any property referred to in paragraph (a) of 
this section is shared between one or more ongoing contracts or grant 
agreements and a contract or grant agreement that is retroceded, 
reassumed, terminated or expires and the Secretary wishes to use such 
property in the retroceded or reassumed program, the Secretary and the 
contractor or grantee using such property shall negotiate an acceptable 
arrangement for continued sharing of such property and for the 
retention or transfer of title.


Sec. 900.101  Is excess BIA or IHS real property to which an Indian 
tribe or tribal organization has taken title eligible for facilities 
operation and maintenance funding from the Secretary?

    Yes.

Excess or Surplus Government Property of Other Agencies


Sec. 900.102  What is excess or surplus government property of other 
agencies?

    (a) ``Excess government property'' is real or personal property 
under the control of a Federal agency, other than BIA and IHS, which is 
not required for the agency's needs and the discharge of its 
responsibilities.
    (b) ``Surplus government property'' means excess real or personal 
property that is not required for the needs of and the discharge of the 
responsibilities of all Federal agencies that has been declared surplus 
by the General Services Administration (GSA).

[[Page 32516]]

Sec. 900.103  How can Indian tribes or tribal organizations learn about 
property that has been designated as excess or surplus government 
property?

    The Secretary shall furnish, not less than annually, to Indian 
tribes or tribal organizations listings of such property as may be made 
available from time to time by GSA or other Federal agencies, and shall 
obtain listings upon the request of an Indian tribe or tribal 
organization.


Sec. 900.104  How may an Indian tribe or tribal organization receive 
excess or surplus government property of other agencies?

    (a) The Indian tribe or tribal organization shall file a request 
for specific property with the Secretary, and shall state how the 
property is appropriate for use for a purpose for which a self-
determination contract or grant is authorized under the Act.
    (b) The Secretary shall expeditiously process such request and 
shall exercise discretion to acquire the property in the manner 
described in Sec. 900.86 of this Subpart.
    (c) Upon approval of the Indian tribe or tribal organization's 
request, the Secretary shall immediately request acquisition of the 
property from the GSA or the holding agency, as appropriate, by 
submitting the necessary documentation in order to acquire the 
requested property prior to the expiration of any ``freeze'' placed on 
the property by the Indian tribe or tribal organization.
    (d) The Secretary shall specify that the property is requested for 
donation to an Indian tribe or tribal organization pursuant to 
authority provided in section 105(f)(3) of the Act.
    (e) The Secretary shall request a waiver of any fees for transfer 
of the property in accordance with applicable Federal regulations.


Sec. 900.105  Who takes title to excess or surplus Federal property 
donated to an Indian tribe or tribal organization?

    (a) Title to any donated excess or surplus Federal personal 
property shall vest in the Indian tribe or tribal organization upon 
taking possession.
    (b) Legal title to donated excess or surplus Federal real property 
shall vest in the Indian tribe or tribal organization upon acceptance 
by the Indian tribe or tribal organization of a proper deed of 
conveyance.
    (c) If the donation of excess or surplus Federal real property 
includes land owned by the United States but not held in trust for an 
Indian tribe, the Indian tribe or tribal organization shall specify 
whether it wants to acquire fee title to the land or whether it wants 
the land to be held in trust for the benefit of an Indian tribe.
    (1) If the Indian tribe or tribal organization requests fee title, 
the Secretary shall take the necessary action under Federal law and 
regulations to transfer fee title to the Indian tribe or tribal 
organization.
    (2) If the Indian tribe or tribal organization requests beneficial 
ownership with fee title to be held by the United States in trust for 
an Indian tribe:
    (i) The Indian tribe or tribal organization shall submit with its 
request a resolution of support from the governing body of the Indian 
tribe in which the beneficial ownership is to be registered.
    (ii) If the donation request of the Indian tribe or tribal 
organization is submitted to the Secretary of Health and Human 
Services, that Secretary shall take all necessary steps to acquire the 
land and transfer it to the Secretary of the Interior and shall also 
forward the Indian tribe or tribal organization's request and the 
Indian tribe's resolution.
    (iii) The Secretary of the Interior shall expeditiously process all 
requests in accord with applicable Federal law and regulations.
    (iv) The Secretary shall not require submission of any information 
other than that required by Federal law and regulation.


Sec. 900.106  If a contract or grant agreement or portion thereof is 
retroceded, reassumed, terminated, or expires, may the Secretary 
reacquire title to excess or surplus Federal property of other agencies 
that was donated to an Indian tribe or tribal organization?

    No. Section 105(f)(3) of the Act does not give the Secretary the 
authority to reacquire title to excess or surplus government property 
acquired from other agencies for donation to an Indian tribe or tribal 
organization.

Property Eligible for Replacement Funding


Sec. 900.107  What property to which an Indian tribe or tribal 
organization obtains title under this Subpart is eligible for 
replacement funding?

    Government-furnished property, contractor-purchased property and 
excess BIA and IHS property donated to an Indian tribe or tribal 
organization to which an Indian tribe or tribal organization holds 
title shall remain eligible for replacement funding to the same extent 
as if title to that property were held by the United States.

Subpart J--Construction


Sec. 900.110  What does this subpart cover?

    (a) This subpart establishes requirements for issuing fixed-price 
or cost-reimbursable contracts to provide: design, construction, 
repair, improvement, expansion, replacement, erection of new space, or 
demolition and other related work for one or more Federal facilities. 
It applies to tribal facilities where the Secretary is authorized by 
law to design, construct and/or renovate, or make improvements to such 
tribal facilities.
    (b) Activities covered by construction contracts under this subpart 
are: design and architectural/engineering services, construction 
project management, and the actual construction of the building or 
facility in accordance with the construction documents, including all 
labor, materials, equipment, and services necessary to complete the 
work defined in the construction documents.
    (1) Such contracts may include the provision of movable equipment, 
telecommunications and data processing equipment, furnishings 
(including works of art), and special purpose equipment, when part of a 
construction contract let under this subpart.
    (2) While planning services and construction management services as 
defined in Sec. 900.113 may be included in a construction contract 
under this subpart, they may also be contracted separately using the 
model agreement in section 108 of the Act.


Sec. 900.111  What activities of construction programs are 
contractible?

    The Secretary shall, upon the request of any Indian tribe or tribal 
organization authorized by tribal resolution, enter into a self-
determination contract to plan, conduct, and administer construction 
programs or portions thereof.


Sec. 900.112  What are construction phases?

    (a) Construction programs generally include the following 
activities in phases which can vary by funding source (an Indian tribe 
or tribal organization should contact its funding source for more 
information regarding the conduct of its program):
    (1) The preplanning phase. The phase during which an initial 
assessment and determination of project need is made and supporting 
information collected for presentation in a project application. This 
project application process is explained in more detail in 
Sec. 900.122;
    (2) The planning phase. The phase during which planning services 
are provided. This phase can include

[[Page 32517]]

conducting and preparing a detailed needs assessment, developing 
justification documents, completing and/or verifying master plans, 
conducting predesign site investigations and selection, developing 
budget cost estimates, conducting feasibility studies, and developing a 
project Program of Requirements (POR);
    (3) The design phase. The phase during which licensed design 
professional(s) using the POR as the basis for design of the project, 
prepare project plans, specifications, and other documents that are a 
part of the construction documents used to build the project. Site 
investigation and selection activities are completed in this phase if 
not conducted as part of the planning phase.
    (4) The construction phase. The phase during which the project is 
constructed. The construction phase includes providing the labor, 
materials, equipment, and services necessary to complete the work in 
accordance with the construction documents prepared as part of the 
design phase.
    (b) The following activities may be part of phases described in 
paragraphs (a)(2), (a)(3), and (a)(4) of this section:
    (1) Management; and
    (2) Environmental, archeological, cultural resource, historic 
preservation, and similar assessments and associated activities.


Sec. 900.113  Definitions.

    (a) Construction contract means a fixed-price or cost-reimbursement 
self-determination contract for a construction project, except that 
such term does not include any contract:
    (1) That is limited to providing planning services and construction 
management services (or a combination of such services);
    (2) For the Housing Improvement Program or roads maintenance 
program of the Bureau of Indian Affairs administered by the Secretary 
of the Interior; or
    (3) For the health facility maintenance and improvement program 
administered by the Secretary of Health and Human Services.
    (b) Construction management services (CMS) means activities limited 
to administrative support services; coordination; and monitoring 
oversight of the planning, design, and construction process. An Indian 
tribe or tribal organization's employee or construction management 
services consultant (typically an engineer or architect) performs such 
activities as:
    (1) Coordination and information exchange between the Indian tribe 
or tribal organization and the Federal government;
    (2) Preparation of Indian tribe or tribal organization's 
construction contract proposals;
    (3) Indian tribe or tribal organization subcontract scope of work 
identification and subcontract preparation, and competitive selection 
of Indian tribe or tribal organization construction contract 
subcontractors (see Sec. 900.110);
    (4) Review of work to ensure compliance with the POR and/or the 
construction contract. This does not involve construction project 
management as defined in paragraph (d) of this section.
    (c) Construction programs include programs for the planning, 
design, construction, repair, improvement, and expansion of buildings 
or facilities, including but not limited to, housing, law enforcement 
and detention facilities, sanitation and water systems, roads, schools, 
administration and health facilities, irrigation and agricultural work, 
water conservation, flood control, and port facilities, and 
environmental, archeological, cultural resource, historic preservation, 
and conduct of similar assessments.
    (d) Construction project management means direct responsibility for 
the construction project through day-to-day on-site management and 
administration of the project. Activities may include cost management, 
project budgeting, project scheduling, procurement services.
    (e) Design means services performed by licensed design 
professionals related to preparing drawings, specifications, and other 
design submissions specified in the contract, as well as services 
provided by or for licensed design professionals during the bidding/
negotiating, construction, and operational phases of the project.
    (f) Planning services means activities undertaken to support agency 
and/or Congressional funding of a construction project. Planning 
services may include performing a needs assessment, completing and/or 
verifying master plans, developing justification documents, conducting 
pre-design site investigations, developing budget cost estimates, 
conducting feasibility studies as needed and completion of approved 
justification documents and a program of requirements (POR) for the 
project.
    (g) Program of Requirements (POR) is a planning document developed 
during the planning phase for an individual project. It provides 
background about the project; site information; programmatic needs; 
and, for facilities projects, a detailed room-by-room listing of 
spaces, including net and gross sizes, finish materials to be used, 
furnishings and equipment, and other information and design criteria on 
which to base the construction project documents.
    (h) Scope of work means the description of the work to be provided 
through a contract issued under this subpart and the methods and 
processes to be used to accomplish that work. A scope of work is 
typically developed based on criteria provided in a POR during the 
design phase, and project construction documents (plans and 
specifications) during the construction phase.


Sec. 900.114  Why is there a separate subpart in these regulations for 
construction contracts and grants?

    There is a separate subpart because the Act differentiates between 
construction contracts and the model agreement in section 108 of the 
Act which is required for contracting other activities. Construction 
contracts are separately defined in the Act and are subject to a 
separate proposal and review process.


Sec. 900.115  How do self-determination construction contracts relate 
to ordinary Federal procurement contracts?

    (a) A self-determination construction contract is a government-to-
government agreement that transfers control of the construction 
project, including administrative functions, to the contracting Indian 
tribe or tribal organization to facilitate effective and meaningful 
participation by the Indian tribe or tribal organization in planning, 
conducting, and administering the construction project, and so that the 
construction project is responsive to the true needs of the Indian 
community. The Secretary's role in the conduct of a contracted 
construction project is limited to the Secretary's responsibilities set 
out in Sec. 900.131.
    (b) Self-determination construction contracts are not traditional 
``procurement'' contracts.
    (1) With respect to a construction contract (or a subcontract of 
such a construction contract), the provisions of the Office of Federal 
Procurement Policy Act (41 U.S.C. 401 et seq.) and the regulations 
promulgated under that Act, shall apply to a construction contract or 
subcontract only to the extent that application of the provision is:
    (i) Necessary to ensure that the contract may be carried out in a 
satisfactory manner;
    (ii) Directly related to the construction activity; and
    (iii) Not inconsistent with the Act.
    (2) A list of the Federal requirements that meet the requirements 
of this

[[Page 32518]]

paragraph shall be included in an attachment to the contract under 
negotiations between the Secretary and the Indian tribe or tribal 
organization.
    (3) Except as provided in paragraph (b)(2) of this section, no 
Federal law listed in section 105(3)(C)(ii) of the Act or any other 
provision of Federal law (including an Executive order) relating to 
acquisition by the Federal government shall apply to a construction 
contract that an Indian tribe or tribal organization enters into under 
this Act, unless expressly provided in the law.
    (c) Provisions of a construction contract under this subpart shall 
be liberally construed in favor of the contracting Indian tribe or 
tribal organization.


Sec. 900.116  Are negotiated fixed-price contracts treated the same as 
cost-reimbursable contracts?

    Yes, except that in negotiated fixed-price construction contracts, 
appropriate clauses shall be negotiated to allocate properly the 
contract risks between the government and the contractor.


Sec. 900.117  Do these ``construction contract'' regulations apply to 
planning services?

    (a) These regulations apply to planning services contracts only as 
provided in this section.
    (1) The Indian tribe or tribal organization shall submit to the 
Secretary for review and approval the POR documents produced as a part 
of a model contract under section 108 of the Act or under a 
construction contract under this subpart.
    (i) Within 60 days after receipt of the POR from the Indian tribe 
or tribal organization for a project that has achieved priority ranking 
or that is funded, the Secretary shall:
    (A) Approve the POR;
    (B) Notify the Indian tribe or tribal organization of and make 
available any objections to the POR that the Secretary may have; or
    (C) Notify the Indian tribe or tribal organization of the reasons 
why the Secretary will be unable either to approve the POR or to notify 
the Indian tribe or tribal organization of any objections within 60 
days, and state the time within which the notification will be made, 
provided that the extended time shall not exceed 60 additional days.
    (ii) Within a maximum of 180 days after receipt of a POR from an 
Indian tribe or tribal organization for a project that is not funded 
and is not described in paragraph (a)(1)(i) of this section, the 
Secretary shall:
    (A) Approve the POR; or
    (B) Notify the Indian tribe or tribal organization of and make 
available any objections to the POR; or
    (C) Notify the Indian tribe or tribal organization of the reasons 
why the Secretary will be unable either to approve the POR or to notify 
the Indian tribe or tribal organization of any objections within 180 
days, and state the time within which the notification will be made, 
provided that the extended time shall not exceed 60 additional days.
    (2) Any failure of the Secretary to act on a POR within the 
applicable period required in paragraph (a)(1) of this section will be 
deemed a rejection of the POR and will authorize the commencement of 
any appeal as provided in section 110 of the Act, or, if a model 
agreement under section 108 of the Act is used, the disputes provision 
of that agreement.
    (3) If an Indian tribe or tribal organization elects to provide 
planning services as part of a construction contract rather than under 
a model agreement as set out in section 108 of the Act, the regulations 
in this subpart shall apply.
    (b) The parties to the contract are encouraged to consult during 
the development of the POR and following submission of the POR to the 
Secretary.


Sec. 900.118  Do these ``construction contract'' regulations apply to 
construction management services?

     No. Construction management services may be contracted separately 
under section 108 of the Act. Construction management services 
consultants and/or Indian tribe or tribal organization employees assist 
and advise the Indian tribe or tribal organization to implement 
construction contracts, but have no contractual relationship with or 
authority to direct construction contract subcontractors.
    (a) If the Indian tribe or tribal organization chooses to contract 
solely for construction management services, these services shall be 
limited to:
    (1) Coordination and exchange of information between the Indian 
tribe or tribal organization and the Secretary;
    (2) Review of work produced by the Secretary to determine 
compliance with:
    (i) The POR and design contract during the design stage; or
    (ii) The project construction documents during the construction 
stage;
    (3) Disputes shall be resolved in accordance with the disputes 
clause of the CMS contract.
    (b) If the Indian tribe or tribal organization conducts CMS under 
section 108 of the Act and the Indian tribe or tribal organization 
contracts separately under this subpart for all or some of the 
activities in Sec. 900.110, the contracted activities shall be limited 
to:
    (1) Coordination and exchange of information between the Indian 
tribe or tribal organization and Secretary;
    (2) Preparation of tribal or tribal organization construction 
subcontract scope of work identification and subcontract preparation, 
and competitive selection of tribal or tribal organization construction 
contract subcontractors;
    (3) Review of work produced by tribal or tribal organization 
construction subcontractors to determine compliance with:
    (i) The POR and the design contract during the design stage; or
    (ii) The project construction documents during the construction 
stage.


Sec. 900.119  To what extent shall the Secretary consult with affected 
Indian tribes before spending funds for any construction project?

    Before spending any funds for a planning, design, construction, or 
renovation project, whether subject to a competitive application and 
ranking process or not, the Secretary shall consult with any Indian 
tribe or tribal organization(s) that would be significantly affected by 
the expenditure to determine and to follow tribal preferences to the 
greatest extent feasible concerning: size, location, type, and other 
characteristics of the project.


Sec. 900.120  How does an Indian tribe or tribal organization find out 
about a construction project?

    Within 30 days after the Secretary's allocation of funds for 
planning phase, design phase, or construction phase activities for a 
specific project, the Secretary shall notify, by registered mail with 
return receipt in order to document mailing, the Indian tribe or tribal 
organization(s) to be benefitted by the availability of the funds for 
each phase of a project. The Secretarial notice of fund allocation 
shall offer technical assistance in the preparation of a contract 
proposal.
    (a) The Secretary shall, within 30 days after receiving a request 
from an Indian tribe or tribal organization, furnish the Indian tribe 
or tribal organization with all information available to the Secretary 
about the project including, but not limited to: construction drawings, 
maps, engineering reports, design reports, plans of requirements, cost 
estimates, environmental assessments, or environmental impact reports 
and archeological reports.

[[Page 32519]]

    (b) An Indian tribe or tribal organization is not required to 
request this information prior to submitting a notification of intent 
to contract or a contract proposal.
    (c) The Secretary shall have a continuing responsibility to furnish 
information.


Sec. 900.121  What happens during the preplanning phase and can an 
Indian tribe or tribal organization perform any of the activities 
involved in this process?

    (a) The application and ranking process for developing a priority 
listing of projects varies between agencies. There are, however, steps 
in the selection process that are common to most selection processes. 
An Indian tribe or tribal organization that wishes to secure a 
construction project should contact the appropriate agency to determine 
the specific steps involved in the application and selection process 
used to fund specific types of projects. When a priority process is 
used in the selection of construction projects, the steps involved in 
the application and ranking process are as follows:
    (1) Application. The agency solicits applications from Indian 
tribes or tribal organizations. In the request for applications, the 
Secretary provides specific information regarding the type of project 
to be funded, the objective criteria that will be used to evaluate 
applications, the points or weight that each criterion will be 
assigned, and the time when applications are due. An Indian tribe or 
tribal organization may prepare the application (technical assistance 
from the agency, within resources available, shall be provided upon 
request from an Indian tribe or tribal organization) or may rely upon 
the agency to prepare the application.
    (2) Ranking/Prioritization. The Secretary evaluates the 
applications based on the criteria provided as part of the application 
preparation process. The Secretary applies only criteria and weights 
assigned to each criteria that were disclosed to the Indian tribe or 
tribal organization during the application stage. The applications are 
then ranked in order from the application that best meets application 
criteria to the application that least meet the application criteria.
    (3) Validation. Before final acceptance of a ranked application, 
the information, such as demographic information, deficiency levels 
reported in application, the condition of existing facilities, and 
program housing needs, is validated. During this process, additional 
information may be developed by the Indian tribe or tribal organization 
in support of the original information or the Secretary may designate a 
representative of the Department to conduct an on-site review of the 
information contained in the application.
    (b) [Reserved]


Sec. 900.122  What does an Indian tribe or tribal organization do if it 
wants to secure a construction contract?

    (a) The Act establishes a special process for review and 
negotiation of proposals for construction contracts which is different 
than that for other self-determination contract proposals. The Indian 
tribe or tribal organization should notify the Secretary of its intent 
to contract. After notification, the Indian tribe or tribal 
organization should prepare its contract proposal in accordance with 
the sections of this subpart. While developing its construction 
contract proposal, the Indian tribe or tribal organization can request 
technical assistance from the Secretary. Not later than 30 days after 
receiving a request from an Indian tribe or tribal organization, the 
Secretary shall provide to the Indian tribe or tribal organization all 
information available about the construction project, including 
construction drawings, maps, engineering reports, design reports, plans 
of requirements, cost estimates, environmental assessments, or 
environmental impact reports, and archaeological reports. The 
responsibility of the Secretary to furnish this information shall be a 
continuing one.
    (b) At the request of the Indian tribe or tribal organization and 
before finalizing its construction contract proposal, the Secretary 
shall provide for a precontract negotiation phase during the 
development of a contract proposal. Within 30 days the Secretary shall 
acknowledge receipt of the proposal and, if requested by the Indian 
tribe or tribal organization, shall confer with the Indian tribe or 
tribal organization to develop a negotiation schedule. The negotiation 
phase shall include, at a minimum:
    (1) The provision of technical assistance under section 103 of the 
Act and paragraph (a) of this section;
    (2) A joint scoping session between the Secretary and the Indian 
tribe or tribal organization to review all plans, specifications, 
engineering reports, cost estimates, and other information available to 
the parties, for the purpose of identifying all areas of agreement and 
disagreement;
    (3) An opportunity for the Secretary to revise plans, designs, or 
cost estimates of the Secretary in response to concerns raised, or 
information provided by, the Indian tribe or tribal organization;
    (4) A negotiation session during which the Secretary and the Indian 
tribe or tribal organization shall seek to develop a mutually agreeable 
contract proposal; and
    (5) Upon the request of the Indian tribe or tribal organization, 
the use of alternative dispute resolution to resolve remaining areas of 
disagreement under the dispute resolution provisions under subchapter 
IV of chapter 5 of the United States Code.


Sec. 900.123  What happens if the Indian tribe or tribal organization 
and the Secretary cannot develop a mutually agreeable contract 
proposal?

    (a) If the Secretary and the Indian tribe or tribal organization 
are unable to develop a mutually agreeable construction contract 
proposal under the procedures in Sec. 900.122, the Indian tribe or 
tribal organization may submit a final contract proposal to the 
Secretary. Not later than 30 days after receiving the final contract 
proposal, the Secretary shall approve the contract proposal and award 
the contract, unless, during the period the Secretary declines the 
proposal under sections 102(a)(2) and 102(b) of the Act (including 
providing opportunity for an appeal under section 102(b)).
    (b) Whenever the Secretary declines to enter into a self-
determination contract or contracts under section 102(a)(2) of the Act, 
the Secretary shall:
    (1) State any objections to the contract proposal (as submitted by 
the Indian tribe or tribal organization) in writing and provide all 
documents relied on in making the declination decision within 20 days 
of such decision to the Indian tribe or tribal organization;
    (2) Provide assistance to the Indian tribe or tribal organization 
to overcome the stated objections;
    (3) Provide the Indian tribe or tribal organization with a hearing 
on the record with the right to engage in full discovery relevant to 
any issue raised in the matter and the opportunity for appeal on the 
objections raised, under the regulations set forth in subpart L, except 
that the Indian tribe or tribal organization may, in lieu of filing the 
appeal, initiate an action in a Federal district court and proceed 
directly under section 110(a) of the Act.


Sec. 900.124  May the Indian tribe or tribal organization to use a 
grant in lieu of a contract?

    Yes. A grant agreement or a cooperative agreement may be used in 
lieu of a contract under sections 102 and 103 of the Act when agreed to 
by the Secretary and the Indian tribe or tribal

[[Page 32520]]

organization. Under the grant concept, the grantee will assume full 
responsibility and accountability for design and construction 
performance within the funding limitations. The grantee will manage and 
administer the work with minimal involvement by the government. The 
grantee will be expected to have acceptable management systems for 
finance, procurement, and property. The Secretary may issue Federal 
construction guidelines and manuals applicable to its construction 
programs, and the government shall accept tribal proposals for 
alternatives which are consistent with or exceed Federal guidelines or 
manuals applicable to construction programs.


Sec. 900.125  What shall a construction contract proposal contain?

    (a) In addition to the full name, address, and telephone number of 
the Indian tribe or tribal organization submitting the construction 
proposal, a construction contract proposal shall contain descriptions 
of the following standards under which they propose to operate the 
contract:
    (1) The use of licensed and qualified architects;
    (2) Applicable health and safety standards;
    (3) Adherence to applicable Federal, State, local, or tribal 
building codes and engineering standards;
    (4) Structural integrity;
    (5) Accountability of funds;
    (6) Adequate competition for subcontracting under tribal or other 
applicable law;
    (7) The commencement, performance, and completion of the contract;
    (8) Adherence to project plans and specifications (including any 
applicable Federal construction guidelines and manuals and the 
Secretary shall accept tribal proposals for alternatives which are 
consistent with or exceed Federal guidelines or manuals applicable to 
construction programs);
    (9) The use of proper materials and workmanship;
    (10) Necessary inspection and testing;
    (11) With respect to the self-determination contract between the 
Indian tribe or tribal organization and Federal government, a process 
for changes, modifications, stop work, and termination of the work when 
warranted;
    (b) In addition to provisions regarding the program standards 
listed in paragraph (a) of this section or the assurances listed in 
paragraph (c) of this section, the Indian tribe or tribal organization 
shall also include in its construction contract proposal the following:
    (1) In the case of a contract for design activities, this 
statement, ``Construction documents produced as part of this contract 
will be produced in accordance with the Program of Requirements and/or 
Scope of Work,'' and the POR and/or Scope of Work shall be attached to 
the contract proposal. If tribal construction procedures, standards and 
methods (including national, regional, state, or tribal building codes 
or construction industry standards) are consistent with or exceed 
applicable Federal standards then the Secretary shall accept the 
tribally proposed standards; and
    (2) In the case of a contract for construction activities, this 
statement, ``The facility will be built in accordance with the 
construction documents produced as a part of design activities. The 
project documents, including plans and specifications, are hereby 
incorporated into this contract through this reference.'' If tribal 
construction procedures, standards and methods (including national, 
regional, state, or tribal building codes or construction industry 
standards) are consistent with or exceed applicable Federal standards 
then the Secretary shall accept the tribally proposed standards; and
    (3) Proposed methods to accommodate the responsibilities of the 
Secretary provided in Sec. 900.131; and
    (4) Proposed methods to accommodate the responsibilities of the 
Indian tribe or tribal organization provided in Sec. 900.130 unless 
otherwise addressed in paragraph (a) of this section and minimum staff 
qualifications proposed by the Indian tribe or tribal organization, if 
any;
    (5) A contract budget as described in Sec. 900.127; and
    (6) A period of performance for the conduct of all activities to be 
contracted;
    (7) A payment schedule as described in Sec. 900.132;
    (8) A statement indicating whether or not the Indian tribe or 
tribal organization has a CMS contract related to this project;
    (9) Current (unrevoked) authorizing resolutions in accordance with 
Sec. 900.5(d) from all Indian tribes benefitting from the contract 
proposal; and
    (10) Any responsibilities, in addition to the Federal 
responsibilities listed in Sec. 900.131, which the Indian tribe or 
tribal organization proposes the Federal government perform to assist 
with the completion of the scope of work;
    (c) The Indian tribe or tribal organization will provide the 
following assurances in its contract proposal:
    (1) If the Indian tribe or tribal organization elects not to take 
title (pursuant to subpart I) to Federal property used in carrying out 
the contract, ``The Indian tribe or tribal organization will not 
dispose of, modify the use of, or change the terms of the real property 
title, or other interest in the site and facilities without permission 
and instructions from the awarding agency. The Indian tribe or tribal 
organization will record the Federal interest in the title of real 
property in accordance with awarding agency directives and will include 
a covenant in the title of real property acquired in whole or in part 
with Federal assistance funds to assure nondiscrimination during the 
useful life of the project''; and
    (2) ``The Indian tribe or tribal organization will comply with the 
Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4801 et seq.)'' 
which prohibits the use of lead based paint in construction or 
rehabilitation of residential structures;
    (3) ``The Indian tribe or tribal organization will comply, or has 
already complied, with the requirements of Titles II and III of the 
Uniform Relocation Assistance and Real Property Acquisition Policies 
Act of 1970 (Pub. L. 91-646),'' which provides for fair and equitable 
treatment of persons displaced or whose property is acquired as a 
result of Federal participation in purchases; and
    (4) ``Except for work performed by tribal or tribal organization 
employees, the Indian tribe or tribal organization will comply, as 
applicable, with the provisions of the Davis-Bacon Act (40 U.S.C. 276c 
and 18 U.S.C. 874),'' for Federally assisted construction 
subagreements;
    (5) ``The Indian tribe or tribal organization will comply with the 
flood insurance purchase requirements of section 102(a) of the Flood 
Disaster Protection Act of 1973 (Pub. L. 93-234),'' which requires 
recipients in a special flood hazard area to participate in the program 
and to purchase flood insurance if the total cost of insurable 
construction and acquisition is $10,000 or more;
    (6) ``The Indian tribe or tribal organization will comply with all 
applicable Federal environmental laws, regulations, and Executive 
Orders;''
    (7) ``The Indian tribe or tribal organization will comply with the 
Wild and Scenic Rivers Act of 1968 (16 U.S.C. 1271 et seq.) related to 
protecting the components or potential components of the national wild 
and scenic rivers system;''
    (8) ``The Indian tribe or tribal organization will assist the 
awarding agency in assuring compliance with

[[Page 32521]]

section 106 of the National Historic Preservation Act of 1966, as 
amended (16 U.S.C. 470), EO 11593 (identification and preservation of 
historic properties), and the Archaeological and Historic Preservation 
Act of 1974 (16 U.S.C. 469a-1 et seq.).''
    (d) The Indian tribe or tribal organization and the Secretary will 
both make a good faith effort to identify any other applicable Federal 
laws, Executive Orders, or regulations applicable to the contract, 
share them with the other party, and refer to them in the construction 
contract. The parties will make a good faith effort to identify tribal 
laws, ordinances, and resolutions which may affect either party in the 
performance of the contract.


Sec. 900.126   Shall a construction contract proposal incorporate 
provisions of Federal construction guidelines and manuals?

    Each agency may provide or the Indian tribe or tribal organization 
may request Federal construction guidelines and manuals for 
consideration by the Indian tribe or tribal organization in the 
preparation of its contract proposal. If tribal construction 
procedures, standards and methods (including national, regional, State, 
or tribal building codes or construction industry standards) are 
consistent with or exceed applicable Federal standards, the Secretary 
shall accept the tribally proposed standards.


Sec. 900.127   What can be included in the Indian tribe or tribal 
organization's contract budget?

    (a) The costs incurred will vary depending on which phase (see 
Sec. 900.112) of the construction process the Indian tribe or tribal 
organization is conducting and the type of contract that will be used. 
The total amount awarded under a construction contract shall reflect an 
overall fair and reasonable price to the parties (see Sec. 900.129).
    (b) Costs for activities under this subpart that have not been 
billed, allocated, or recovered under a contract issued under section 
108 of the Act should be included.
    (c) The Indian tribe or tribal organization's budget should include 
the cost elements that reflect an overall fair and reasonable price. 
These costs include:
    (1) The reasonable costs to the Indian tribe or tribal organization 
of performing the contract, taking into consideration the terms of the 
contract and the requirements of the Act and any other applicable law;
    (2) The costs of preparing the contract proposal and supporting 
cost data;
    (3) The costs associated with auditing the general and 
administrative costs of the Indian tribe or tribal organization 
associated with the management of the construction contract; and
    (4) In cases where the Indian tribe or tribal organization is 
submitting a fixed-price construction contract:
    (i) The reasonable costs to the Indian tribe or tribal organization 
for general administration incurred in connection with the project that 
is the subject of the contract;
    (ii) The ability of the contractor that carries out the 
construction contract to make a reasonable profit, taking into 
consideration the risks associated with carrying out the contract, 
local market conditions, and other relevant considerations.
    (d) In establishing a contract budget for a construction project, 
the Secretary shall not be required to identify separately the 
components described in paragraphs (c)(4)(i) and (c)(4)(ii) of this 
section.
    (e) The Indian tribe or tribal organization's budget proposal 
includes a detailed budget breakdown for performing the scope of work 
including a total ``not to exceed'' dollar amount with which to perform 
the scope of work. Specific budget line items, if requested by the 
Indian tribe or tribal organization, can include the following:
    (1) The administrative costs the Indian tribe or tribal 
organization may incur including:
    (i) Personnel needed to provide administrative oversight of the 
contract;
    (ii) Travel costs incurred, both local travel incurred as a direct 
result of conducting the contract and remote travel necessary to review 
project status with the Secretary;
    (iii) Meeting costs incurred while meeting with community residents 
to develop project documents;
    (iv) Fees to be paid to consultants, such as demographic 
consultants, planning consultants, attorneys, accountants, and 
personnel who will provide construction management services;
    (2) The fees to be paid to architects and engineers to assist in 
preparing project documents and to assist in oversight of the 
construction process;
    (3) The fees to be paid to develop project surveys including 
topographical surveys, site boundary descriptions, geotechnical 
surveys, archeological surveys, and NEPA compliance, and;
    (4) In the case of a contract to conduct project construction 
activities, the fees to provide a part-time or full-time on-site 
inspector, depending on the terms of the contract, to monitor 
construction activities;
    (5) In the case of a contract to conduct project construction 
activities, project site development costs;
    (6) In the case of a contract to conduct project construction 
activities, project construction costs including those costs described 
in paragraph (c)(4), of this section;
    (7) The cost of securing and installing moveable equipment, 
telecommunications and data processing equipment, furnishings, 
including works of art, and special purpose equipment when part of a 
construction contract;
    (8) A contingency amount for unanticipated conditions of the 
construction phase of cost-reimbursable contracts. The amount of the 
contingency provided shall be 3 percent of activities being contracted 
or 50 percent of the available contingency funds, whichever is greater. 
In the event provision of required contingency funds will cause the 
project to exceed available project funds, the discrepancy shall be 
reconciled in accordance with Sec. 900.129(e). Any additional 
contingency funds for the construction phase will be negotiated on an 
as-needed basis subject to the availability of funds and the nature, 
scope, and complexity of the project. Any contingency for other phases 
will be negotiated on a contract-by-contract basis. Unused contingency 
funds obligated to the contract and remaining at the end of the 
contract will be considered savings.
    (9) Other costs incurred that are directly related to the conduct 
of contract activities.


Sec. 900.128   What funding shall the Secretary provide in a 
construction contract?

    The Secretary shall provide an amount under a construction contract 
that reflects an overall fair and reasonable price to the parties. 
These costs include:
    (a) The reasonable costs to the Indian tribe or tribal organization 
of performing the contract, taking into consideration the terms of the 
contract and the requirements of the Act and any other applicable law;
    (b) The costs of preparing the contract proposal and supporting 
cost data; and
    (c) The costs associated with auditing the general and 
administrative costs of the tribal organization associated with the 
management of the construction contract; and
    (d) If the Indian tribe or tribal organization is submitting a 
fixed-price construction contract:
    (1) The reasonable costs to the Indian tribe or tribal organization 
for general administration incurred in connection

[[Page 32522]]

with the project that is the subject of the contract;
    (2) The ability of the contractor that carries out the construction 
contract to make a reasonable profit, taking into consideration the 
risks associated with carrying out the contract, local market 
conditions, and other relevant considerations including but not limited 
to contingency.
    (3) In establishing a contract budget for a construction project, 
the Secretary is not required to identify separately the components 
described in paragraph (d) (1) and (d) (2) of this sections.


Sec. 900.129   How do the Secretary and Indian tribe or tribal 
organization arrive at an overall fair and reasonable price for the 
performance of a construction contract?

    (a) Throughout the contract award process, the Secretary and Indian 
tribe or tribal organization shall share all construction project cost 
information available to them in order to facilitate reaching agreement 
on an overall fair and reasonable price for the project or part 
thereof. In order to enhance this communication, the government's 
estimate of an overall fair and reasonable price shall:
    (1) Contain a level of detail appropriate to the nature and phase 
of the work and sufficient to allow comparisons to the Indian tribe or 
tribal organization's estimate;
    (2) Be prepared in a format coordinated with the Indian tribe or 
tribal organization; and
    (3) Include the cost elements contained in section 105(m)(4) of the 
Act.
    (b) The government's cost estimate shall be an independent cost 
estimate based on such information as the following:
    (1) Prior costs to the government for similar projects adjusted for 
comparison to the target location, typically in unit costs, such as 
dollars per pound, square meter cost of building, or other unit cost 
that can be used to make a comparison;
    (2) Actual costs previously incurred by the Indian tribe or tribal 
organization for similar projects;
    (3) Published price lists, to include regional adjustment factors, 
for materials, equipment, and labor; and
    (4) Projections of inflation and cost trends, including projected 
changes such as labor, material, and transportation costs.
    (c) The Secretary shall provide the initial government cost 
estimate to the Indian tribe or tribal organization and make 
appropriate revisions based on concerns raised or information provided 
by the Indian tribe or tribal organization. The Secretary and the 
Indian tribe or tribal organization shall continue to revise, as 
appropriate, their respective cost estimates based on changed or 
additional information such as the following:
    (1) Actual subcontract bids;
    (2) Changes in inflation rates and market conditions, including 
local market conditions;
    (3) Cost and price analyses conducted by the Secretary and the 
Indian tribe or tribal organization during negotiations;
    (4) Agreed-upon changes in the size, scope and schedule of the 
construction project; and
    (5) Agreed-upon changes in project plans and specifications.
    (d) Considering all of the information available, the Secretary and 
the Indian tribe or tribal organization shall negotiate the amount of 
the construction contract. The objective of the negotiations is to 
arrive at an amount that is fair under current market conditions and 
reasonable to both the government and the Indian tribe or tribal 
organization. As a result, the agreement does not necessarily have to 
be in strict conformance with either party's cost estimate nor does 
agreement have to be reached on every element of cost, but only on the 
overall fair and reasonable price of each phase of the work included in 
the contract.
    (e) If the fair and reasonable price arrived at under paragraph (d) 
of this section would exceed the amount available to the Secretary, 
then:
    (1) If the Indian tribe or tribal organization elects to submit a 
final proposal, the Secretary may decline the proposal under section 
105(m)(4)(C)(v) of the Act or if the contract has been awarded, dispute 
the matter under the Contract Disputes Act; or
    (2) If requested by the Indian tribe or tribal organization:
    (i) The Indian tribe or tribal organization and the Secretary may 
jointly explore methods of expanding the available funds through the 
use of contingency funds, advance payments in accordance with 
Sec. 900.132, rebudgeting, or seeking additional appropriations; or
    (ii) The Indian tribe or tribal organization may elect to propose a 
reduction in project scope to bring the project price within available 
funds; or
    (iii) The Secretary and Indian tribe or tribal organization may 
agree that the project be executed in phases.


Sec. 900.130  What role does the Indian tribe or tribal organization 
play during the performance of a self-determination construction 
contract?

    (a) The Indian tribe or tribal organization is responsible for the 
successful completion of the project in accordance with the approved 
contract documents.
    (b) If the Indian tribe or tribal organization is contracting to 
perform design phase activities, the Indian tribe or tribal 
organization shall have the following responsibilities:
    (1) The Indian tribe or tribal organization shall subcontract with 
or provide the services of licensed and qualified architects and other 
consultants needed to accomplish the self-determination construction 
contract.
    (2) The Indian tribe or tribal organization shall administer and 
disburse funds provided through the contract in accordance with subpart 
F, Sec. 900.42 through Sec. 900.45 and implement a property management 
system in accordance with subpart F, Sec. 900.51 through Sec. 900.60.
    (3) The Indian tribe or tribal organization shall direct the 
activities of project architects, engineers, and other project 
consultants, facilitate the flow of information between the Indian 
tribe or tribal organization and its subcontractors, resolve disputes 
between the Indian tribe or tribal organization and its subcontractors 
or between its subcontractors, and monitor the work produced by its 
subcontractors to ensure compliance with the POR.
    (4) The Indian tribe or tribal organization shall direct the work 
of its subcontractors so that work produced is provided in accordance 
with the contract budget and contract performance period as negotiated 
between and agreed to by the parties.
    (5) The Indian tribe or tribal organization shall provide the 
Secretary with an opportunity to review and provide written comments on 
the project plans and specifications only at the concept phase, the 
schematic phase (or the preliminary design), the design development 
phase, and the final construction documents phase and approve the 
project plans and specifications for general compliance with contract 
requirements only at the schematic phase (or the preliminary design) 
and the final construction documents phase or as otherwise negotiated.
    (6) The Indian tribe or tribal organization shall provide the 
Secretary with the plans and specifications after their final review 
so, if needed, the Secretary may obtain an independent government cost 
estimate in accordance with Sec. 900.131(b)(4) for the construction of 
the project.
    (7) The Indian tribe or tribal organization shall retain project 
records and design documents for a minimum of

[[Page 32523]]

3 years following completion of the contract.
    (8) The Indian tribe or tribal organization shall provide progress 
reports and financial status reports quarterly, or as negotiated, that 
contain a narrative of the work accomplished, including but not limited 
to descriptions of contracts, major subcontracts, and modifications 
implemented during the report period and A/E service deliverables, the 
percentage of the work completed, a report of funds expended during the 
reporting period, and total funds expended for the project. The Indian 
tribe or tribal organization shall also provide copies, for the 
information of the Secretary, of an initial work and payment schedule 
and updates as they may occur.
    (c) If the Indian tribe or tribal organization is contracting to 
perform project construction phase activities, the Indian tribe or 
tribal organization shall have the following responsibilities:
    (1) The Indian tribe or tribal organization shall subcontract with 
or provide the services of licensed and qualified architects and other 
consultants as needed to accomplish the self-determination construction 
contract.
    (2) The Indian tribe or tribal organization shall administer and 
dispense funds provided through the contract in accordance with subpart 
F, Sec. 900.42 through Sec. 900.45 and implement a property management 
system in accordance with subpart F, Sec. 900.51 through Sec. 900.60.
    (3) The Indian tribe or tribal organization shall subcontract with 
or provide the services of construction contractors or provide its own 
forces to conduct construction activities in accordance with the 
project construction documents or as otherwise negotiated between and 
agreed to by the parties.
    (4) The Indian tribe or tribal organization shall direct the 
activities of project architects, engineers, construction contractors, 
and other project consultants, facilitate the flow of information 
between the Indian tribe or tribal organization and its subcontractors, 
resolve disputes between itself and its subcontractors or between its 
subcontractors, and monitor the work produced by its subcontractors to 
assure compliance with the project plans and specifications.
    (5) The Indian tribe or tribal organization shall manage or provide 
for the management of day-to-day activities of the contract including 
the issuance of construction change orders to subcontractors except 
that, unless the Secretary agrees:
    (i) The Indian tribe or tribal organization may not issue a change 
order to a construction subcontractor that will cause the Indian tribe 
or tribal organization to exceed its self-determination contract 
budget;
    (ii) The Indian tribe or tribal organization may not issue a change 
order to a construction subcontractor that will cause the Indian tribe 
or tribal organization to exceed the performance period in its self-
determination contract budget; or
    (iii) The Indian tribe or tribal organization may not issue to a 
construction subcontractor a change order that is a significant 
departure from the scope or objective of the project.
    (6) The Indian tribe or tribal organization shall direct the work 
of its subcontractors so that work produced is provided in accordance 
with the contract budget and performance period as negotiated between 
and agreed to by the parties.
    (7) The Indian tribe or tribal organization shall provide to the 
Secretary progress and financial status reports.
    (i) The reports shall be provided quarterly, or as negotiated, and 
shall contain a narrative of the work accomplished, the percentage of 
the work completed, a report of funds expended during the reporting 
period, and total funds expended for the project.
    (ii) The Indian tribe or tribal organization shall also provide 
copies, for the information of the Secretary, of an initial schedule of 
values and updates as they may occur, and an initial construction 
schedule and updates as they occur.
    (8) The Indian tribe or tribal organization shall maintain on the 
job-site or project office, and make available to the Secretary during 
monitoring visits: contracts, major subcontracts, modifications, 
construction documents, change orders, shop drawings, equipment cut 
sheets, inspection reports, testing reports, and current redline 
drawings.
    (d) Upon completion of the project, the Indian tribe or tribal 
organization shall provide to the Secretary a reproducible copy of the 
record plans and a contract closeout report.
    (e) For cost-reimbursable projects, the Indian tribe or tribal 
organization shall not be obligated to continue performance that 
requires an expenditure of more funds than were awarded under the 
contract. If the Indian tribe or tribal organization has a reason to 
believe that the total amount required for performance of the contract 
will be greater than the amount of funds awarded, it shall provide 
reasonable notice to the Secretary. If the Secretary does not increase 
the amount of funds awarded under the contract, the Indian tribe or 
tribal organization may suspend performance of the contract until 
sufficient additional funds are awarded.


Sec. 900.131  What role does the Secretary play during the performance 
of a self-determination construction contract?

    (a) If the Indian tribe or tribal organization is contracting 
solely to perform construction management services either under this 
subpart or section 108 of the Act, the Secretary has the following 
responsibilities:
    (1) The Secretary is responsible for the successful completion of 
the project in accordance with the approved contract documents. In 
fulfilling those responsibilities, the Secretary shall consult with the 
Indian tribe or tribal organization on a regular basis as agreed to by 
the parties to facilitate the exchange of information between the 
Indian tribe or tribal organization and Secretary;
    (2) The Secretary shall provide the Indian tribe or tribal 
organization with regular opportunities to review work produced to 
determine compliance with the following documents:
    (i) The POR, during the conduct of design phase activities. The 
Secretary shall provide the Indian tribe or tribal organization with an 
opportunity to review the project construction documents at the concept 
phase, the schematic phase, the design development phase, and the final 
construction documents phase, or as otherwise negotiated. Upon receipt 
of project construction documents for review, the Indian tribe or 
tribal organization shall not take more than 21 days to make available 
to the Secretary any comments or objections to the construction 
documents as submitted by the Secretary. Resolution of any comments or 
objections shall be in accordance with dispute resolution procedures as 
agreed to by the parties and contained in the contract; or
    (ii) The project construction documents, during conduct of the 
construction phase activities. The Indian tribe or tribal organization 
shall have the right to conduct monthly or critical milestone on-site 
monitoring visits or as negotiated with the Secretary;
    (b) If the Indian tribe or tribal organization is contracting to 
perform design and/or construction phase activities, the Secretary 
shall have the following responsibilities:

[[Page 32524]]

    (1) In carrying out the responsibilities of this section, and 
specifically in carrying out review, comment, and approval functions 
under this section, the Secretary shall provide for full tribal 
participation in the decision making process and shall honor tribal 
preferences and recommendations to the greatest extent feasible. This 
includes promptly notifying the Indian tribe or tribal organization of 
any concerns or issues in writing that may lead to disapproval, meeting 
with the Indian tribe or tribal organization to discuss these concerns 
and issues and to share relevant information and documents, and making 
a good faith effort to resolve all issues and concerns of the Indian 
tribe or tribal organization. The time allowed for Secretarial review, 
comment, and approval shall be no more than 21 days per review unless a 
different time period is negotiated and specified in individual 
contracts. The 21-day time period may be extended if the Indian tribe 
or tribal organization agrees to the extension in writing. 
Disagreements over the Secretary's decisions in carrying out these 
responsibilities shall be handled under subpart N governing contract 
disputes under the Contract Disputes Act.
    (2) To the extent the construction project is subject to NEPA or 
other environmental laws, the appropriate Secretary shall make the 
final determination under such laws. All other environmentally related 
functions are contractible.
    (3) If the Indian tribe or tribal organization conducts planning 
activities under this subpart, the Secretary shall review and approve 
final planning documents for the project to ensure compliance with 
applicable planning standards.
    (4) When a contract or portion of a contract is for project 
construction activities, the Secretary may rely on the Indian tribe or 
tribal organization's cost estimate or the Secretary may obtain an 
independent government cost estimate that is derived from the final 
project plans and specifications. The Secretary shall obtain the cost 
estimate, if any, within 90 days or less of receiving the final plans 
and specifications from the Indian tribe or tribal organization and 
shall provide all supporting documentation of the independent cost 
estimate to the Indian tribe or tribal organization within the 90 day 
time limit.
    (5) If the contracted project involves design activities, the 
Secretary shall have the authority to review for general compliance 
with the contract requirements and provide written comments on the 
project plans and specifications only at the concept phase, the 
schematic phase, the design development phase and the final 
construction documents phase, and approve for general compliance with 
contract requirements the project plans and specifications only at the 
schematic phase and the final construction documents phase or as 
otherwise negotiated.
    (6) If the contracted project involves design activities, the 
Secretary reserves a royalty-free, nonexclusive, and irrevocable 
license to reproduce, publish or otherwise use, for Federal government 
purposes:
    (i) The copyright in any work developed under a contract or 
subcontract of this subpart; and
    (ii) Any rights of copyright to which an Indian tribe or tribal 
organization or a tribal subcontractor purchases ownership through this 
contract.
    (7) Changes that require an increase to the negotiated contract 
budget or an increase in the negotiated performance period or are a 
significant departure from the scope or objective of the project shall 
require approval of the Secretary.
    (8) Review and comment on specific shop drawings as negotiated and 
specified in individual contracts.
    (9) The Secretary may conduct monthly on-site monitoring visits, or 
alternatively if negotiated with the Indian tribe or tribal 
organization, critical milestone on-site monitoring visits.
    (10) The Secretary retains the right to conduct final project 
inspections jointly with the Indian tribe or tribal organization and to 
accept the building or facility. If the Secretary identifies problems 
during final project inspections the information shall be provide to 
the Indian tribe or tribal organization and shall be limited to items 
that are materially noncompliant.
    (11) The Secretary can require an Indian tribe or tribal 
organization to suspend work under a contract in accordance with this 
paragraph. The Secretary may suspend a contract for no more than 30 
days unless the Indian tribe or tribal organization has failed to 
correct the reason(s) for the suspension or unless the cause of the 
suspension cannot be resolved through either the efforts of the 
Secretary or the Indian tribe or tribal organization.
    (i) The following are reasons the Secretary may suspend work under 
a self-determination contract for construction:
    (A) Differing site conditions encountered upon commencement of 
construction activities that impact health or safety concerns or shall 
require an increase in the negotiated project budget;
    (B) The Secretary discovers materially non-compliant work;
    (C) Funds allocated for the project that is the subject of this 
contract are rescinded by Congressional action; or
    (D) Other Congressional actions occur that materially affect the 
subject matter of the contract.
    (ii) If the Secretary wishes to suspend the work, the Secretary 
shall first provide written notice and an opportunity for the Indian 
tribe or tribal organization to correct the problem. The Secretary may 
direct the Indian tribe or tribal organization to suspend temporarily 
work under a contract only after providing a minimum of 5 working days' 
advance written notice to the Indian tribe or tribal organization 
describing the nature of the performance deficiencies or imminent 
safety, health or environmental issues which are the cause for 
suspending the work.
    (iii) The Indian tribe or tribal organization shall be compensated 
for reasonable costs, including but not limited to overhead costs, 
incurred due to any suspension of work that occurred through no fault 
of the Indian tribe or tribal organization.
    (iv) Disputes arising as a result of a suspension of the work by 
the Secretary shall be subject to the Contract Disputes Act or any 
other alternative dispute resolution mechanism as negotiated between 
and agreed to by the parties and contained in the contract.
    (12) The Secretary can terminate the project for cause in the event 
non-compliant work is not corrected through the suspension process 
specified in paragraph (11) of this section.
    (13) The Secretary retains authority to terminate the project for 
convenience for the following reasons:
    (i) Termination for convenience is requested by the Indian tribe or 
tribal organization;
    (ii) Termination for convenience is requested by the Secretary and 
agreed to by the Indian tribe or tribal organization;
    (iii) Funds allocated for the project that is the subject of the 
contract are rescinded by Congressional action;
    (iv) Other Congressional actions take place that affect the subject 
matter of the contract;
    (v) If the Secretary terminates a self-determination construction 
contract for convenience, the Secretary shall provide the Indian tribe 
or tribal organization 21 days advance written notice of intent to 
terminate a contract for convenience; or
    (vi) The Indian tribe or tribal organization shall be compensated 
for

[[Page 32525]]

reasonable costs incurred due to termination of the contract.


Sec. 900.132  Once a contract and/or grant is awarded, how will the 
Indian tribe or tribal organization receive payments?

    (a) A schedule for advance payments shall be developed based on 
progress, need, and other considerations in accordance with applicable 
law. The payment schedule shall be negotiated by the parties and 
included in the contract. The payment schedule may be adjusted as 
negotiated by the parties during the course of the project based on 
progress and need.
    (b) Payments shall be made to the Indian tribe or tribal 
organization according to the payment schedule contained in the 
contract. If the contract does not provide for the length of each 
allocation period, the Secretary shall make payments to the Indian 
tribe or tribal organization at least quarterly. Each allocation shall 
be adequate to provide funds for the contract activities anticipated to 
be conducted during the allocation period, except that:
    (1) The first allocation may be greater than subsequent allocations 
and include mobilization costs, and contingency funds described in 
Sec. 900.128(e)(8); and
    (2) Any allocation may include funds for payment for materials that 
will be used during subsequent allocation periods.
    (c) The Indian tribe or tribal organization may propose a schedule 
of payment amounts measured by time or measured by phase of the project 
(e.g., planning, design, construction).
    (d) The amount of each payment allocation shall be stated in the 
Indian tribe or tribal organization's contract proposal. Upon award of 
the contract, the Secretary shall transfer the amount of the first 
allocation to the Indian tribe or tribal organization within 21 days 
after the date of contract award. The second allocation shall be made 
not later than 7 days before the end of the first allocation period.
    (e) Not later than 7 days before the end of each subsequent 
allocation period after the second allocation, the Secretary shall 
transfer to the Indian tribe or tribal organization the amount for the 
next allocation period, unless the Indian tribe or tribal organization 
is delinquent in submission of allocation period progress reports and 
financial reports or the Secretary takes action to suspend or terminate 
the contract in accordance with Sec. 900.131(b)(11), 
Sec. 900.131(b)(12), or Sec. 900.131(b)(13).


Sec. 900.133  Does the declination process or the Contract Dispute Act 
apply to construction contract amendments proposed either by an Indian 
tribe or tribal organization or the Secretary?

    The Contract Disputes Act generally applies to such amendments. 
However, the declination process and the procedures in Sec. 900.122 and 
Sec. 900.123 apply to the proposal by an Indian tribe or tribal 
organization when the proposal is for a new project, a new phase or 
discreet stage of a phase of a project, or an expansion of a project 
resulting from an additional allocation of funds by the Secretary under 
Sec. 900.120.


Sec. 900.134  At the end of a self-determination construction contract, 
what happens to savings on a cost-reimbursement contract?

    The savings shall be used by the Indian tribe or tribal 
organization to provide additional services or benefits under the 
contract. Unexpended contingency funds obligated to the contract, and 
remaining at the end of the contract, are savings. No further approval 
or justifying documentation by the Indian tribe or tribal organization 
shall be required before expenditure of funds.


Sec. 900.135  May the time frames for action set out in this subpart be 
reduced?

    Yes. The time frames in this subpart are intended to be maximum 
times and may be reduced based on urgency and need, by agreement of the 
parties. If the Indian tribe or tribal organization requests reduced 
time frames for action due to unusual or special conditions (such as 
limited construction periods), the Secretary shall make a good faith 
effort to accommodate the requested time frames.


Sec. 900.136  Do tribal employment rights ordinances apply to 
construction contracts and subcontracts?

    Yes. Tribal employment rights ordinances do apply to construction 
contracts and subcontracts pursuant to Sec. 7(b) and Sec. 7(c) of the 
Act.


Sec. 900.137  Do all provisions of the other subparts apply to 
contracts awarded under this subpart?

    Yes, except as otherwise provided in this subpart and unless 
excluded as follows: programmatic reports and data requirements, 
reassumption, contract review and approval process, contract proposal 
contents, and Sec. 900.150 (d) and (e) of these regulations.

Subpart K--Waiver Procedures


Sec. 900.140  Can any provision of the regulations under this Part be 
waived?

    Yes. Upon the request of an Indian tribe or tribal organization, 
the Secretary shall waive any provision of these regulations, including 
any cost principles adopted by the regulations under this part, if the 
Secretary finds that granting the waiver is either in the best interest 
of the Indians served by the contract, or is consistent with the 
policies of the Act and is not contrary to statutory law.


Sec. 900.141  How does an Indian tribe or tribal organization get a 
waiver?

    To obtain a waiver, an Indian tribe or tribal organization shall 
submit a written request to the Secretary identifying the regulation to 
be waived and the basis for the request. The Indian tribe or tribal 
organization shall explain the intended effect of the waiver, the 
impact upon the Indian tribe or tribal organization if the waiver is 
not granted, and the specific contract(s) to which the waiver will 
apply.


Sec. 900.142  Does an Indian tribe or tribal organization's waiver 
request have to be included in an initial contract proposal?

    No. Although a waiver request may be included in a contract 
proposal, it can also be submitted separately.


Sec. 900.143  How is a waiver request processed?

    The Secretary shall approve or deny a waiver within 90 days after 
the Secretary receives a written waiver request. The Secretary's 
decision shall be in writing. If the requested waiver is denied, the 
Secretary shall include in the decision a full explanation of the basis 
for the decision.


Sec. 900.144  What happens if the Secretary makes no decision within 
the 90-day period?

    The waiver request is deemed approved.


Sec. 900.145  On what basis may the Secretary deny a waiver request?

    Consistent with section 107(e) of the Act, the Secretary may only 
deny a waiver request based on a specific written finding. The finding 
must clearly demonstrate (or be supported by controlling legal 
authority) that if the waiver is granted:
    (a) The service to be rendered to the Indian beneficiaries of the 
particular program or function to be contracted will not be 
satisfactory;
    (b) Adequate protection of trust resources is not assured;
    (c) The proposed project or function to be contracted for cannot be 
properly

[[Page 32526]]

completed or maintained by the proposed contract;
    (d) The amount of funds proposed under the contract is in excess of 
the applicable funding level for the contract, as determined under 
section 106(a) of the Act; or
    (e) The program, function, service, or activity (or portion of it) 
that is the subject of the proposal is beyond the scope of programs, 
functions, services, or activities that are contractible under the Act 
because the proposal includes activities that cannot lawfully be 
carried out by the contractor.


Sec. 900.146  Is technical assistance available for waiver requests?

    Yes. Technical assistance is available as provided in section 900.7 
to prepare a waiver request or to overcome any stated objection which 
the Secretary might have to the request.


Sec. 900.147  What appeal rights are available?

    If the Secretary denies a waiver request, the Indian tribe or 
tribal organization has the right to appeal the decision and request a 
hearing on the record under the procedures for hearings and appeals 
contained in subpart L of these regulations. Alternatively, the Indian 
tribe or tribal organization may sue in Federal district court to 
challenge the Secretary's action.


Sec. 900.148  How can an Indian tribe or tribal organization secure a 
determination that a law or regulation has been superseded by the 
Indian Self-Determination Act, as specified in section 107(b) of the 
Act?

    Any Indian tribe or tribal organization may at any time submit a 
request to the Secretary for a determination that any law or regulation 
has been superseded by the Act and that the law has no applicability to 
any contract or proposed contract under the Act. The Secretary is 
required to provide an initial decision on such a request within 90 
days after receipt. If such a request is denied, the Indian tribe or 
tribal organization may appeal under Subpart L of these regulations. 
The Secretary shall provide notice of each determination made under 
this Subpart to all Indian tribes and tribal organizations.

Subpart L--Appeals

Appeals Other Than Emergency Reassumption and Suspension, Withholding 
or Delay in Payment


Sec. 900.150  What decisions can an Indian tribe or tribal organization 
appeal under this Subpart?

    (a) A decision to decline to award a self-determination contract, 
or a portion thereof, under section 102 of the Act;
    (b) A decision to decline to award a construction contract, or a 
portion thereof, under sections 105(m) and 102 of the Act;
    (c) A decision to decline a proposed amendment to a self-
determination contract, or a portion thereof, under section 102 of the 
Act;
    (d) A decision not to approve a proposal, in whole or in part, to 
redesign a program;
    (e) A decision to rescind and reassume a self-determination 
contract, in whole or in part, under section 109 of the Act except for 
emergency reassumptions;
    (f) A decision to refuse to waive a regulation under section 107(e) 
of the Act;
    (g) A disagreement between an Indian tribe or tribal organization 
and the Federal government over proposed reporting requirements;
    (h) A decision to refuse to allow an Indian tribe or tribal 
organization to convert a contract to mature status, under section 4(h) 
of the Act;
    (i) All other appealable pre-award decisions by a Federal official 
as specified in these regulations, whether an official of the 
Department of the Interior or the Department of Health and Human 
Services; or
    (j) A decision relating to a request for a determination that a law 
or regulation has been superseded by the Act.


Sec. 900.151  Are there any appeals this subpart does not cover?

    This subpart does not cover:
    (a) Disputes which arise after a self-determination contract has 
been awarded, or emergency reassumption of self-determination contracts 
or suspension of payments under self-determination contracts, which are 
covered under Sec. 900.170 through Sec. 900.176 of these regulations.
    (b) Other post-award contract disputes, which are covered under 
Subpart N.
    (c) Denials under the Freedom of Information Act, 5 U.S.C. 552, 
which may be appealed under 43 CFR 2 for the Department of the Interior 
and 45 CFR 5 for the Department of Health and Human Services; and
    (d) Decisions relating to the award of discretionary grants under 
section 103 of the Act, which may be appealed under 25 CFR 2 for the 
Department of the Interior, and under 45 CFR 5 for the Department of 
Health and Human Services.


Sec. 900.152  How does an Indian tribe or tribal organization know 
where and when to file its appeal from decisions made by agencies of 
DOI or DHHS?

    Every decision in any of the ten areas listed above shall contain 
information which shall tell the Indian tribe or tribal organization 
where and when to file the Indian tribe or tribal organization's 
appeal. Each decision shall include the following statement:

    Within 30 days of the receipt of this decision, you may request 
an informal conference under 25 CFR 900.154, or appeal this decision 
under 25 CFR 900.158 to the Interior Board of Indian Appeals (IBIA). 
Should you decide to appeal this decision, you may request a hearing 
on the record. An appeal to the IBIA under 25 CFR 900.158 shall be 
filed with the IBIA by certified mail or by hand delivery at the 
following address: Board of Indian Appeals, U.S. Department of the 
Interior, 4015 Wilson Boulevard, Arlington, VA 22203. You shall 
serve copies of your Notice of Appeal on the Secretary and on the 
official whose decision is being appealed. You shall certify to the 
IBIA that you have served these copies.


Sec. 900.153  Does an Indian tribe or tribal organization have any 
options besides an appeal?

    Yes. The Indian tribe or tribal organization may request an 
informal conference. An informal conference is a way to resolve issues 
as quickly as possible, without the need for a formal hearing. The 
Indian tribe or tribal organization may also choose to sue in U.S. 
District Court under section 102(b)(3) and section 110(a) of the Act.


Sec. 900.154  How does an Indian tribe or tribal organization request 
an informal conference?

    The Indian tribe or tribal organization shall file its request for 
an informal conference with the office of the person whose decision it 
is appealing, within 30 days of the day it receives the decision. The 
Indian tribe or tribal organization may either hand-deliver the request 
for an informal conference to that person's office, or mail it by 
certified mail, return receipt requested. If the Indian tribe or tribal 
organization mails the request, it will be considered filed on the date 
the Indian tribe or tribal organization mailed it by certified mail.

[[Page 32527]]

Sec. 900.155  How is an informal conference held?

    (a) The informal conference shall be held within 30 days of the 
date the request was received, unless the Indian tribe or tribal 
organization and the authorized representative of the Secretary agree 
on another date.
    (b) If possible, the informal conference will be held at the Indian 
tribe or tribal organization's office. If the meeting cannot be held at 
the Indian tribe or tribal organization's office and is held more than 
fifty miles from its office, the Secretary shall arrange to pay 
transportation costs and per diem for incidental expenses to allow for 
adequate representation of the Indian tribe or tribal organization.
    (c) The informal conference shall be conducted by a designated 
representative of the Secretary.
    (d) Only people who are the designated representatives of the 
Indian tribe or tribal organization, or authorized by the Secretary of 
Health and Human Services or by the appropriate agency of the 
Department of the Interior, are allowed to make presentations at the 
informal conference.


Sec. 900.156  What happens after the informal conference?

    (a) Within 10 days of the informal conference, the person who 
conducted the informal conference shall prepare and mail to the Indian 
tribe or tribal organization a written report which summarizes what 
happened at the informal conference and a recommended decision.
    (b) Every report of an informal conference shall contain the 
following language:

    Within 30 days of the receipt of this recommended decision, you 
may file an appeal of the initial decision of the DOI or DHHS agency 
with the Interior Board of Indian Appeals (IBIA) under 25 CFR 
900.157. You may request a hearing on the record. An appeal to the 
IBIA under 25 CFR 900.157 shall be filed with the IBIA by certified 
mail or hand delivery at the following address: Board of Indian 
Appeals, U.S. Department of the Interior, 4015 Wilson Boulevard, 
Arlington, VA 22203. You shall serve copies of your Notice of Appeal 
on the Secretary and on the official whose decision is being 
appealed. You shall certify to the IBIA that you have served these 
copies.


Sec. 900.157  Is the recommended decision always final?

    No. If the Indian tribe or tribal organization is dissatisfied with 
the recommended decision, it may still appeal the initial decision 
within 30 days of receiving the recommended decision and the report of 
the informal conference. If the Indian tribe or tribal organization 
does not file a notice of appeal within 30 days, or before the 
expiration of the extension it has received under Sec. 900.159, the 
recommended decision becomes final.


Sec. 900.158  How does an Indian tribe or tribal organization appeal 
the initial decision, if it does not request an informal conference or 
if it does not agree with the recommended decision resulting from the 
informal conference?

    (a) If the Indian tribe or tribal organization decides to appeal, 
it shall file a notice of appeal with the IBIA within 30 days of 
receiving either the initial decision or the recommended decision.
    (b) The Indian tribe or tribal organization may either hand-deliver 
the notice of appeal to the IBIA, or mail it by certified mail, return 
receipt requested. If the Indian tribe or tribal organization mails the 
Notice of Appeal, it will be considered filed on the date the Indian 
tribe or tribal organization mailed it by certified mail. The Indian 
tribe or tribal organization should mail the notice of appeal to: Board 
of Indian Appeals, U.S. Department of the Interior, 4015 Wilson 
Boulevard, Arlington, VA 22203.
    (c) The Notice of Appeal shall:
    (1) Briefly state why the Indian tribe or tribal organization 
thinks the initial decision is wrong;
    (2) Briefly identify the issues involved in the appeal; and
    (3) State whether the Indian tribe or tribal organization wants a 
hearing on the record, or whether the Indian tribe or tribal 
organization wants to waive its right to a hearing.
    (d) The Indian tribe or tribal organization shall serve a copy of 
the notice of appeal upon the official whose decision it is appealing. 
The Indian tribe or tribal organization shall certify to the IBIA that 
it has done so.
    (e) The authorized representative of the Secretary of Health and 
Human Services or the authorized representative of the Secretary of the 
Interior will be considered a party to all appeals filed with the IBIA 
under the Act.


Sec. 900.159   May an Indian tribe or tribal organization get an 
extension of time to file a notice of appeal?

    Yes. If the Indian tribe or tribal organization needs more time, it 
can request an extension of time to file its Notice of Appeal within 60 
days of receiving either the initial decision or the recommended 
decision resulting from the informal conference. The request of the 
Indian tribe or tribal organization shall be in writing, and shall give 
a reason for not filing its notice of appeal within the 30-day time 
period. If the Indian tribe or tribal organization has a valid reason 
for not filing its notice of appeal on time, it may receive an 
extension from the IBIA.


Sec. 900.160   What happens after an Indian tribe or tribal 
organization files an appeal?

    (a) Within 5 days of receiving the Indian tribe or tribal 
organization's notice of appeal, the IBIA will decide whether the 
appeal falls under Sec. 900.150(a) through Sec. 900.150(g). If so, the 
Indian tribe or tribal organization is entitled to a hearing.
    (1) If the IBIA determines that the appeal of the Indian tribe or 
tribal organization falls under Sec. 900.150(h), Sec. 900.150(i), or 
Sec. 900.150(j), and the Indian tribe or tribal organization has 
requested a hearing, the IBIA will grant the request for a hearing 
unless the IBIA determines that there are no genuine issues of material 
fact to be resolved.
    (2) If the IBIA cannot make that decision based on the information 
included in the notice of appeal, the IBIA may ask for additional 
statements from the Indian tribe or tribal organization, or from the 
appropriate Federal agency. If the IBIA asks for more statements, it 
will make its decision within 5 days of receiving those statements.
    (b) If the IBIA decides that the Indian tribe or tribal 
organization is not entitled to a hearing or if the Indian tribe or 
tribal organization has waived its right to a hearing on the record, 
the IBIA will ask for the administrative record under 43 CFR 4.335. The 
IBIA shall tell the parties that the appeal will be considered under 
the regulations at 43 CFR 4, Subpart D, except the case shall be 
docketed immediately, without waiting for the 20-day period described 
in 43 CFR 4.336.


Sec. 900.161   How is a hearing arranged?

    (a) If a hearing is to be held, the IBIA will refer the Indian 
tribe or tribal organization's case to the Hearings Division of the 
Office of Hearings and Appeals of the U.S. Department of the Interior. 
The case will then be assigned to an Administrative Law Judge (ALJ), 
appointed under 5 U.S.C. 3105.
    (b) Within 15 days of the date of the referral, the ALJ will hold a 
pre-hearing conference, by telephone or in person, to decide whether an 
evidentiary hearing is necessary, or whether it is possible to decide 
the appeal based on the written record. At the pre-hearing conference 
the ALJ will provide for:
    (1) A briefing and discovery schedule;
    (2) A schedule for the exchange of information, including, but not 
limited

[[Page 32528]]

to witness and exhibit lists, if an evidentiary hearing is to be held;
    (3) The simplification or clarification of issues;
    (4) The limitation of the number of expert witnesses, or avoidance 
of similar cumulative evidence, if an evidentiary hearing is to be 
held;
    (5) The possibility of agreement disposing of all or any of the 
issues in dispute; and
    (6) Such other matters as may aid in the disposition of the appeal.
    (c) The ALJ shall order a written record to be made of any 
conference results that are not reflected in a transcript.


Sec. 900.162   What happens when a hearing is necessary?

    (a) The ALJ shall hold a hearing within 60 days of the date of the 
order referring the appeal to the ALJ, unless the parties agree to have 
the hearing on a later date.
    (b) At least 30 days before the hearing, the government agency 
shall file and serve the Indian tribe or tribal organization with a 
response to the notice of appeal.
    (c) If the hearing is held more than 50 miles from the Indian tribe 
or tribal organization's office, the Secretary shall arrange to pay 
transportation costs and per diem for incidental expenses to allow for 
adequate representation of the Indian tribe or tribal organization.
    (d) The hearing shall be conducted in accordance with the 
Administrative Procedure Act, 5 U.S.C. 556.


Sec. 900.163   What is the Secretary's burden of proof for appeals from 
decisions under Sec. 900.150(a) through Sec. 900.150(g)?

    For those appeals, the Secretary has the burden of proof (as 
required by section 102(e)(1) of the Act) to establish by clearly 
demonstrating the validity of the grounds for declining the contract 
proposal.


Sec. 900.164   What rights do Indian tribes, tribal organizations, and 
the government have during the appeal process?

    Both the Indian tribe or tribal organization and the government 
agency have the same rights during the appeal process. These rights 
include the right to:
    (a) Be represented by legal counsel;
    (b) Have the parties provide witnesses who have knowledge of the 
relevant issues, including specific witnesses with that knowledge, who 
are requested by either party;
    (c) Cross-examine witnesses;
    (d) Introduce oral or documentary evidence, or both;
    (e) Require that oral testimony be under oath;
    (f) Receive a copy of the transcript of the hearing, and copies of 
all documentary evidence which is introduced at the hearing;
    (g) Compel the presence of witnesses, or the production of 
documents, or both, by subpoena at hearings or at depositions;
    (h) Take depositions, to request the production of documents, to 
serve interrogatories on other parties, and to request admissions; and
    (i) Any other procedural rights under the Administrative Procedure 
Act, 5 U.S.C. 556.


Sec. 900.165   What happens after the hearing?

    (a) Within 30 days of the end of the formal hearing or any post-
hearing briefing schedule established by the ALJ, the ALJ shall send 
all the parties a recommended decision, by certified mail, return 
receipt requested. The recommended decision shall contain the ALJ's 
findings of fact and conclusions of law on all the issues. The 
recommended decision shall also state that the Indian tribe or tribal 
organization has the right to object to the recommended decision.
    (b) If the appeal involves the Department of Health and Human 
Services, the recommended decision shall contain the following 
statement:

    Within 30 days of the receipt of this recommended decision, you 
may file an objection to the recommended decision with the Secretary 
of Health and Human Services under 25 CFR 900.165(b). An appeal to 
the Secretary under 25 CFR 900.165(b) shall be filed at the 
following address: Department of Health and Human Services, 200 
Independence Ave. S.W., Washington, DC, 20201. You shall serve 
copies of your notice of appeal on the official whose decision is 
being appealed. You shall certify to the Secretary that you have 
served this copy. If neither party files an objection to the 
recommended decision within 30 days, the recommended decision will 
become final.

    (c) If the appeal involves the Department of the Interior, the 
recommended decision shall contain the following statement:

    Within 30 days of the receipt of this recommended decision, you 
may file an objection to the recommended decision with the Interior 
Board of Indian Appeals (IBIA) under 25 CFR 900.165(c). An appeal to 
the IBIA under 25 CFR 900.165(c) shall be filed at the following 
address: Board of Indian Appeals, 4015 Wilson Boulevard, Arlington, 
VA 22203. You shall serve copies of your notice of appeal on the 
Secretary of the Interior, and on the official whose decision is 
being appealed. You shall certify to the IBIA that you have served 
these copies. If neither party files an objection to the recommended 
decision within 30 days, the recommended decision will become final.


Sec. 900.166   Is the recommended decision always final?

    No. Any party to the appeal may file precise and specific written 
objections to the recommended decision, or any other comments, within 
30 days of receiving the recommended decision. Objections shall be 
served on all other parties. The recommended decision shall become 
final 30 days after the Indian tribe or tribal organization receives 
the ALJ's recommended decision, unless a written statement of 
objections is filed with the Secretary of Health and Human Services or 
the IBIA during the 30-day period. If no party files a written 
statement of objections within 30 days, the recommended decision shall 
become final.


Sec. 900.167   If an Indian tribe or tribal organization objects to the 
recommended decision, what will the Secretary of Health and Human 
Services or the IBIA do?

    (a) The Secretary of Health and Human Services or the IBIA has 20 
days from the date it receives any timely written objections to modify, 
adopt, or reverse the recommended decision. If the Secretary of Health 
and Human Services or the IBIA does not modify or reverse the 
recommended decision during that time, the recommended decision 
automatically becomes final.
    (b) When reviewing the recommended decision, the IBIA or the 
Secretary may consider and decide all issues properly raised by any 
party to the appeal, based on the record.
    (c) The decision of the Secretary or the IBIA shall:
    (1) Be in writing;
    (2) Specify the findings of fact or conclusions of law which are 
modified or reversed;
    (3) Give reasons for the decision, based on the record; and
    (4) State that the decision is final for the Department.


Sec. 900.168   Will an appeal hurt the Indian tribe or tribal 
organization's position in other contract negotiations?

    No. A pending appeal will not affect or prevent the negotiation or 
award of another contract.


Sec. 900.169   Will the decisions on appeals be available for the 
public to review?

    Yes. The Secretary shall publish all final decisions from the ALJs, 
the IBIA, and the Secretary of Health and Human Services.

[[Page 32529]]

Appeals of Emergency Reassumption of Self-Determination Contracts or 
Suspensions, Withholding or Delay of Payments Under a Self-
Determination Contract


Sec. 900.170   What happens in the case of emergency reassumption or 
suspension or withholding or delay of payments?

    (a) This subpart applies when the Secretary gives notice to an 
Indian tribe or tribal organization that the Secretary intends to:
    (1) Immediately rescind a contract or grant and reassume a program; 
or
    (2) Suspend, withhold, or delay payment under a contract.
    (b) When the Secretary advises an Indian tribe or tribal 
organization that the Secretary intends to take an action referred to 
in paragraph (a)(1) of this section, the Secretary shall also notify 
the Deputy Director of the Office of Hearings and Appeals, Department 
of the Interior, 4015 Wilson Boulevard, Arlington, VA 22203.


Sec. 900.171   Will there be a hearing?

    Yes. The Deputy Director of the Office of Hearings and Appeals 
shall appoint an Administrative Law Judge (ALJ) to hold a hearing.
    (a) The hearing shall be held within 10 days of the date of the 
notice referred to in Sec. 900.170 unless the Indian tribe or tribal 
organization agrees to a later date.
    (b) If possible, the hearing will be held at the office of the 
Indian tribe or tribal organization. If the hearing is held more than 
50 miles from the office of the Indian tribe or tribal organization, 
the Secretary shall arrange to pay transportation costs and per diem 
for incidental expenses. This will allow for adequate representation of 
the Indian tribe or tribal organization.


Sec. 900.172   What happens after the hearing?

    (a) Within 30 days after the end of the hearing or any post-hearing 
briefing schedule established by the ALJ, the ALJ shall send all 
parties a recommended decision by certified mail, return receipt 
requested. The recommended decision shall contain the ALJ's findings of 
fact and conclusions of law on all the issues. The recommended decision 
shall also state that the Indian tribe or tribal organization has the 
right to object to the recommended decision.
    (b) If the appeal involves the Department of Health and Human 
Services, the recommended decision shall contain the following 
statement:

    Within 15 days of the receipt of this recommended decision, you 
may file an objection to the recommended decision with the Secretary 
of Health and Human Services under 25 CFR 900.165(b). An appeal to 
the Secretary under 25 CFR 900.165(b) shall be filed at the 
following address: Department of Health and Human Services, 200 
Independence Ave. S.W., Washington, DC 20201. You shall serve copies 
of your notice of appeal on the official whose decision is being 
appealed. You shall certify to the Secretary that you have served 
this copy. If neither party files an objection to the recommended 
decision within 15 days, the recommended decision will become final.

    (c) If the appeal involves the Department of the Interior, the 
recommended decision shall contain the following statement:

    Within 15 days of the receipt of this recommended decision, you 
may file an objection to the recommended decision with the Interior 
Board of Indian Appeals (IBIA) under 25 CFR 900.165(c). An appeal to 
the IBIA under 25 CFR 900.165(c) shall be filed at the following 
address: Board of Indian Appeals, 4015 Wilson Boulevard, Arlington, 
VA 22203. You shall serve copies of your notice of appeal on the 
Secretary of the Interior, and on the official whose decision is 
being appealed.

You shall certify to the IBIA that you have served these copies. If 
neither party files an objection to the recommended decision within 15 
days, the recommended decision will become final.


Sec. 900.173   Is the recommended decision always final?

    No. Any party to the appeal may file precise and specific written 
objections to the recommended decision, or any other comments, within 
15 days of receiving the recommended decision. You shall serve a copy 
of your objections on the other party. The recommended decision will 
become final 15 days after the Indian tribe or tribal organization 
receives the ALJ's recommended decision, unless a written statement of 
objections is filed with the Secretary of Health and Human Services or 
the IBIA during the 15-day period. If no party files a written 
statement of objections within 15 days, the recommended decision will 
become final.


Sec. 900.174   If an Indian tribe or tribal organization objects to the 
recommended decision, what will the Secretary of Health and Human 
Services or the IBIA do?

    (a) The Secretary or the IBIA has 15 days from the date he/she 
receives timely written objections to modify, adopt, or reverse the 
recommended decision. If the Secretary or the IBIA does not modify or 
reverse the recommended decision during that time, the recommended 
decision automatically becomes final.
    (b) When reviewing the recommended decision, the IBIA or the 
Secretary may consider and decide all issues properly raised by any 
party to the appeal, based on the record.
    (c) The decision of the Secretary or of the IBIA shall:
    (1) Be in writing;
    (2) Specify the findings of fact or conclusions of law which are 
modified or reversed;
    (3) Give reasons for the decision, based on the record; and
    (4) State that the decision is final for the Department.


Sec. 900.175   Will an appeal hurt an Indian tribe or tribal 
organization's position in other contract negotiations?

    No. A pending appeal will not affect or prevent the negotiation or 
award of another contract.


Sec. 900.176   Will the decisions on appeals be available for the 
public to review?

    Yes. The Secretary shall publish all final decisions from the ALJs, 
the IBIA, and the Secretary of Health and Human Services.

Applicability of the Equal Access to Justice Act


Sec. 900.177   Does the Equal Access to Justice Act (EAJA) apply to 
appeals under this subpart?

    Yes. EAJA claims against the DOI or the DHHS will be heard by the 
IBIA under 43 CFR 4.601-4.619. For DHHS, appeals from the EAJA award 
will be according to 25 CFR 900.165(b).

Subpart M--Federal Tort Claims Act Coverage General Provisions


Sec. 900.180  What does this subpart cover?

    This subpart explains the applicability of the Federal Tort Claims 
Act (FTCA). This section covers:
    (a) Coverage of claims arising out of the performance of medical-
related functions under self-determination contracts;
    (b) Coverage of claims arising out of the performance of non-
medical-related functions under self-determination contracts; and
    (c) Procedures for filing claims under FTCA.


Sec. 900.181  What definitions apply to this subpart?

    Indian contractor means:
    (1) In California, subcontractors of the California Rural Indian 
Health Board, Inc. or, subject to approval of the IHS Director after 
consultation with the DHHS Office of General Counsel, subcontractors of 
an Indian tribe or tribal organization which are:
    (i) Governed by Indians eligible to receive services from the 
Indian Health Service;
    (ii) Which carry out comprehensive IHS service programs within

[[Page 32530]]

geographically defined service areas; and
    (iii) Which are selected and identified through tribal resolution 
as the local provider of Indian health care services.
    (2) Subject to the approval of the IHS Director after consultation 
with the DHHS Office of General Counsel, Indian tribes and tribal 
organizations which meet in all respects the requirements of the Indian 
Self-Determination Act to contract directly with the Federal Government 
but which choose through tribal resolution to subcontract to carry out 
IHS service programs within geographically defined service areas with 
another Indian tribe or tribal organization which contracts directly 
with IHS.
    (3) Any other contractor that qualifies as an ``Indian contractor'' 
under the Indian Self-Determination Act.


Sec. 900.182  What other statutes and regulations apply to FTCA 
coverage?

    A number of other statutes and regulations apply to FTCA coverage, 
including the Federal Tort Claims Act (28 U.S.C. 1346(b), 2401, 2671-
2680) and related Department of Justice regulations in 28 CFR part 14.


Sec. 900.183  Do Indian tribes and tribal organizations need to be 
aware of areas which FTCA does not cover?

    Yes. There are claims against self-determination contractors which 
are not covered by FTCA, claims which may not be pursued under FTCA, 
and remedies that are excluded by FTCA. General guidance is provided 
below as to these matters but is not intended as a definitive 
description of coverage, which is subject to review by the Department 
of Justice and the courts on a case-by-case basis.
    (a) What claims are expressly barred by FTCA and therefore may not 
be made against the United States, an Indian tribe or tribal 
organization? Any claim under 28 U.S.C. 2680, including claims arising 
out of assault, battery, false imprisonment, false arrest, malicious 
prosecution, abuse of process, libel, slander, misrepresentation, 
deceit, or interference with contract rights, unless otherwise 
authorized by 28 U.S.C. 2680(h).
    (b) What claims may not be pursued under FTCA?
    (1) Except as provided in Sec. 900.181(a)(1) and Sec. 900.189, 
claims against subcontractors arising out of the performance of 
subcontracts with a self-determination contractor;
    (2) claims for on-the-job injuries which are covered by workmen's 
compensation;
    (3) claims for breach of contract rather than tort claims; or
    (4) claims resulting from activities performed by an employee which 
are outside the scope of employment.
    (c) What remedies are expressly excluded by FTCA and therefore are 
barred?
    (1) Punitive damages, unless otherwise authorized by 28 U.S.C. 
2674; and
    (2) other remedies not permitted under applicable state law.


Sec. 900.184  Is there a deadline for filing FTCA claims?

    Yes. Claims shall be filed within 2 years of the date of accrual. 
(28 U.S.C. 2401).


Sec. 900.185  How long does the Federal government have to process an 
FTCA claim after the claim is received by the Federal agency, before a 
lawsuit may be filed?

    Six months.


Sec. 900.186  Is it necessary for a self-determination contract to 
include any clauses about Federal Tort Claims Act coverage?

    No, it is optional. At the request of Indian tribes and tribal 
organizations, self-determination contracts shall include the following 
clauses to clarify the scope of FTCA coverage:
    (a) The following clause may be used for all contracts:

    For purposes of Federal Tort Claims Act coverage, the contractor 
and its employees (including individuals performing personal 
services contracts with the contractor to provide health care 
services) are deemed to be employees of the Federal government while 
performing work under this contract. This status is not changed by 
the source of the funds used by the contractor to pay the employee's 
salary and benefits unless the employee receives additional 
compensation for performing covered services from anyone other than 
the contractor.

    (b) The following clause is for IHS contracts only:

    Under this contract, the contractor's employee may be required 
as a condition of employment to provide health services to non-IHS 
beneficiaries in order to meet contractual obligations. These 
services may be provided in either contractor or non-contractor 
facilities. The employee's status for Federal Tort Claims Act 
purposes is not affected.


Sec. 900.187  Does FTCA apply to a self-determination contract if FTCA 
is not referenced in the contract?

    Yes.


Sec. 900.188  To what extent shall the contractor cooperate with the 
Federal government in connection with tort claims arising out of the 
contractor's performance?

    (a) The contractor shall designate an individual to serve as tort 
claims liaison with the Federal government.
    (b) As part of the notification required by 28 U.S.C. 2679(c), the 
contractor shall notify the Secretary immediately in writing of any 
tort claim (including any proceeding before an administrative agency or 
court) filed against the contractor or any of its employees that 
relates to performance of a self-determination contract or subcontract.
    (c) The contractor, through its designated tort claims liaison, 
shall assist the appropriate Federal agency in preparing a 
comprehensive, accurate, and unbiased report of the incident so that 
the claim may be properly evaluated. This report should be completed 
within 60 days of notification of the filing of the tort claim. The 
report should be complete in every significant detail and include as 
appropriate:
    (1) The date, time and exact place of the accident or incident;
    (2) A concise and complete statement of the circumstances of the 
accident or incident;
    (3) The names and addresses of tribal and/or Federal employees 
involved as participants or witnesses;
    (4) The names and addresses of all other eyewitnesses;
    (5) An accurate description of all government and other privately-
owned property involved and the nature and amount of damage, if any;
    (6) A statement as to whether any person involved was cited for 
violating a Federal, State or tribal law, ordinance, or regulation;
    (7) The contractor's determination as to whether any of its 
employees (including Federal employees assigned to the contractor) 
involved in the incident giving rise to the tort claim were acting 
within the scope of their employment in carrying out the contract at 
the time the incident occurred;
    (8) Copies of all relevant documentation, including available 
police reports, statements of witnesses, newspaper accounts, weather 
reports, plats and photographs of the site or damaged property, such as 
may be necessary or useful for purposes of claim determination by the 
Federal agency; and
    (9) Insurance coverage information, copies of medical bills, and 
relevant employment records.
    (d) The contractor shall cooperate with and provide assistance to 
the U.S. Department of Justice attorneys assigned to defend the tort 
claim, including, but not limited to, case preparation, discovery, and 
trial.
    (e) If requested by the Secretary, the contractor shall make an 
assignment and subrogation of all the contractor's rights and claims 
(except those against

[[Page 32531]]

the Federal government) arising out of a tort claim against the 
contractor.
    (f) If requested by the Secretary, the contractor shall authorize 
representatives of the Secretary to settle or defend any claim and to 
represent the contractor in or take charge of any action. If the 
Federal government undertakes the settlement or defense of any claim or 
action the contractor shall provide all reasonable additional 
assistance in reaching a settlement or asserting a defense.


Sec. 900.189  Does this coverage extend to subcontractors of self-
determination contracts?

    No. Subcontractors or subgrantees providing services to a Public 
Law 93-638 contractor or grantee are generally not covered. The only 
exceptions are Indian contractors such as those under subcontract with 
the California Rural Indian Health Board to carry out IHS programs in 
geographically defined service areas in California and personal 
services contracts under Sec. 900.193 (for Sec. 900.183(b)(1)) or 
Sec. 900.183(b) (for Sec. 900.190).

Medical-Related Claims


Sec. 900.190  Is FTCA the exclusive remedy for a tort claim for 
personal injury or death resulting from the performance of a self-
determination contract?

    Yes, except as explained in Sec. 900.183(b). No claim may be filed 
against a self-determination contractor or employee for personal injury 
or death arising from the performance of medical, surgical, dental, or 
related functions by the contractor in carrying out self-determination 
contracts under the Act. Related functions include services such as 
those provided by nurses, laboratory and x-ray technicians, emergency 
medical technicians and other health care providers including 
psychologists and social workers. All such claims shall be filed 
against the United States and are subject to the limitations and 
restrictions of the FTCA.


Sec. 900.191  Are employees of self-determination contractors providing 
health services under the self-determination contract protected by 
FTCA?

    Yes. For the purpose of Federal Tort Claims Act coverage, an Indian 
tribe or tribal organization and its employees performing medical-
related functions under a self-determination contract are deemed a part 
of the Public Health Service if the employees are acting within the 
scope of their employment in carrying out the contract.


Sec. 900.192  What employees are covered by FTCA for medical-related 
claims?

    (a) Permanent employees;
    (b) Temporary employees;
    (c) Persons providing services without compensation in carrying out 
a contract;
    (d) Persons required because of their employment by a self-
determination contractor to serve non-IHS beneficiaries (even if the 
services are provided in facilities not owned by the contractor); and
    (e) Federal employees assigned to the contract.


Sec. 900.193  Does FTCA coverage extend to individuals who provide 
health care services under a personal services contract providing 
services in a facility that is owned, operated, or constructed under 
the jurisdiction of the IHS?

    Yes. The coverage extends to individual personal services 
contractors providing health services in such a facility, including a 
facility owned by an Indian tribe or tribal organization but operated 
under a self-determination contract with IHS.


Sec. 900.194  Does FTCA coverage extend to services provided under a 
staff privileges agreement with a non-IHS facility where the agreement 
requires a health care practitioner to provide reciprocal services to 
the general population?

    Yes. Those services are covered, as long as the contractor's health 
care practitioners do not receive additional compensation from a third 
party for the performance of these services and they are acting within 
the scope of their employment under a self-determination contract. 
Reciprocal services include:
    (a) Cross-covering other medical personnel who temporarily cannot 
attend their patients;
    (b) Assisting other personnel with surgeries or other medical 
procedures;
    (c) Assisting with unstable patients or at deliveries; or
    (d) Assisting in any patient care situation where additional 
assistance by health care personnel is needed.


Sec. 900.195  Does FTCA coverage extend to the contractor's health care 
practitioners providing services to private patients on a fee-for-
services basis when such personnel (not the self-determination 
contractor) receive the fee?

    No.


Sec. 900.196  Do covered services include the conduct of clinical 
studies and investigations and the provision of emergency services, 
including the operation of emergency motor vehicles?

    Yes, if the services are provided in carrying out a self-
determination contract. (An emergency motor vehicle is a vehicle, 
whether government, contractor, or employee-owned, used to transport 
passengers for medical services.)


Sec. 900.197  Does FTCA cover employees of the contractor who are paid 
by the contractor from funds other than those provided through the 
self-determination contract?

    Yes, as long as the services out of which the claim arose were 
performed in carrying out the self-determination contract.


Sec. 900.198  Are Federal employees assigned to a self-determination 
contractor under the Intergovernmental Personnel Act or detailed under 
section 214 of the Public Health Service Act covered to the same extent 
that they would be if working directly for a Federal agency?

    Yes.


Sec. 900.199  Does FTCA coverage extend to health care practitioners to 
whom staff privileges have been extended in contractor health care 
facilities operated under a self-determination contract on the 
condition that such practitioner provide health services to IHS 
beneficiaries covered by FTCA?

    Yes, health care practitioners with staff privileges in a facility 
operated by a contractor are covered when they perform services to IHS 
beneficiaries. Such personnel are not covered when providing services 
to non-IHS beneficiaries.


Sec. 900.200  May persons who are not Indians or Alaska Natives assert 
claims under FTCA?

    Yes. Non-Indian individuals served under the contract whether or 
not on a fee-for-service basis, may assert claims under this Subpart.

Procedure for Filing Medical-Related Claims


Sec. 900.201  How should claims arising out of the performance of 
medical-related functions be filed?

    Claims should be filed on Standard Form 95 (Claim for Damage, 
Injury or Death) or by submitting comparable written information 
(including a definite amount of monetary damage claimed) with the 
Chief, PHS Claims Branch, Room 18-20, Parklawn Building, 5600 Fishers 
Lane, Rockville, MD 20857, or at such other address as shall have been 
provided to the contractor in writing.


Sec. 900.202  What should a self-determination contractor or a 
contractor's employee do on receiving such a claim?

    They should immediately forward the claim to the PHS Claims Branch 
at the address indicated in Sec. 900.201 and notify the contractor's 
tort claims liaison.

[[Page 32532]]

Sec. 900.203  If the contractor or contractor's employee receives a 
summons and/or a complaint alleging a tort covered by FTCA, what should 
the contractor do?

    As part of the notification required by 28 U.S.C. 2679(c), the 
contractor should immediately inform the Chief, Litigation Branch, 
Business and Administrative Law Division, Office of General Counsel, 
Department of Health and Human Services, 330 Independence Avenue SW., 
Room 5362, Washington, DC 20201, and the contractor's tort claims 
liaison, and forward the following materials:
    (a) Four copies of the claimant's medical records of treatment, 
inpatient and outpatient, and any related correspondence, as well as 
reports of consultants;
    (b) A narrative summary of the care and treatment involved;
    (c) The names and addresses of all personnel who were involved in 
the care and treatment of the claimant;
    (d) Any comments or opinions that the employees who treated the 
claimant believe to be pertinent to the allegations contained in the 
claim; and
    (e) Other materials identified in Sec. 900.188(c).

Non-Medical Related Claims


Sec. 900.204  Is FTCA the exclusive remedy for a non-medical related 
tort claim arising out of the performance of a self-determination 
contract?

    Yes. Except as explained in Sec. 900.183(b), no claim may be filed 
against a self-determination contractor or employee based upon 
performance of non-medical-related functions under a self-determination 
contract. Claims of this type must be filed against the United States 
under FTCA.


Sec. 900.205   To what non-medical-related claims against self-
determination contractors does FTCA apply?

    It applies to:
    (a) All tort claims arising from the performance of self-
determination contracts under the authority of the Act on or after 
October 1, 1989; and
    (b) Any tort claims first filed on or after October 24, 1989, 
regardless of when the incident which is the basis of the claim 
occurred.


Sec. 900.206   What employees are covered by FTCA for non-medical-
related claims?

    (a) Permanent employees;
    (b) Temporary employees;
    (c) Persons providing services without compensation in carrying out 
a contract;
    (d) Persons required because of their employment by a self-
determination contractor to serve non-IHS beneficiaries (even if the 
services are provided in facilities not owned by the contractor); and
    (e) Federal employees assigned to the contract.


Sec. 900.207   How are non-medical related tort claims and lawsuits 
filed for IHS?

    Non-medical-related tort claims and lawsuits arising out of the 
performance of self-determination contracts with the Indian Health 
Service should be filed in the manner described in Sec. 900.201 (for 
both Sec. 900.207 and Sec. 900.208).


Sec. 900.208   How are non-medical related tort claims and lawsuits 
filed for DOI?

    Non-medical-related claims arising out of the performance of self-
determination contracts with the Secretary of the Interior should be 
filed in the manner described in Sec. 900.201 with the Assistant 
Solicitor, Procurement and Patents, Office of the Solicitor, Department 
of the Interior, Room 6511, 1849 C Street NW., Washington, DC 20240.


Sec. 900.209   What should a self-determination contractor or 
contractor's employee do on receiving a non-medical related tort claim?

    (a) If the contract is with DHHS, they should immediately forward 
the claim to the PHS Claims Branch at the address indicated in 
Sec. 900.201 and notify the contractor's tort claims liaison.
    (b) If the contract is with DOI, they should immediately notify the 
Assistant Solicitor, Procurement and Patents, Office of the Solicitor, 
Department of the Interior, Room 6511, 1849 C Street N.W., Washington, 
DC 20240.


Sec. 900.210   If the contractor or contractor's employee receives a 
summons and/or complaint alleging a non-medical related tort covered by 
FTCA, what should an Indian tribe or tribal organization do?

    (a) If the contract is with the DHHS, they should immediately 
inform the Chief, Litigation Branch, Business and Administrative Law 
Division, Office of General Counsel, Department of Health and Human 
Services, 330 Independence Avenue S.W., Room 5362, Washington, DC 20201 
and the contractor's tort claims liaison.
    (b) If the contract is with the Department of the Interior, they 
should immediately notify the Assistant Solicitor, Procurement and 
Patents, Office of the Solicitor, Department of the Interior, Room 
6511, 1849 C Street N.W., Washington, DC 20240, and the contractor's 
tort claims liaison.

Subpart N--Post-Award Contract Disputes


Sec. 900.215   What does this subpart cover?

    (a) This subpart covers:
    (1) All HHS and DOI self-determination contracts, including 
construction contracts; and
    (2) All disputes regarding an awarding official's decision relating 
to a self-determination contract.
    (b) This subpart does not cover the decisions of an awarding 
official that are covered under subpart L.


Sec. 900.216   What other statutes and regulations apply to contract 
disputes?

    (a) The Contract Disputes Act of 1978 (CDA), Public Law 95-563 (41 
U.S.C. 601 as amended);
    (b) If the matter is submitted to the Interior Board of Contract 
Appeals, 43 CFR 4.110-126; and
    (c) The Equal Access to Justice Act, 5 U.S.C. 504 and 28 U.S.C. 
2412 and regulations at 43 CFR 4.601 through 4.619 (DOI) and 45 CFR 13 
(DHHS).


Sec. 900.217   Is filing a claim under the CDA our only option for 
resolving post-award contract disputes?

    No. The Federal government attempts to resolve all contract 
disputes by agreement at the awarding official's level. These are 
alternatives to filing a claim under the CDA:
    (a) Before issuing a decision on a claim, the awarding official 
should consider using informal discussions between the parties, 
assisted by individuals who have not substantially participated in the 
matter, to aid in resolving differences.
    (b) In addition to filing a CDA claim, or instead of filing a CDA 
claim, the parties may choose to use an alternative dispute resolution 
mechanism, pursuant to the provisions of the Administrative Dispute 
Resolution Act, Public Law 101-552, as amended, 5 U.S.C. 581 et seq., 
or the options listed in section 108(1)(b)(12) of the Indian Self-
Determination Act, as applicable.


Sec. 900.218   What is a claim under the CDA?

    (a) A claim is a written demand by one of the contracting parties, 
asking for one or more of the following:
    (1) Payment of a specific sum of money under the contract;
    (2) Adjustment or interpretation of contract terms; or
    (3) Any other claim relating to the contract.
    (b) However, an undisputed voucher, invoice, or other routing 
request for payment is not a claim under the CDA. A voucher, invoice, 
or routing request for payment may be converted into a CDA claim if:
    (1) It is disputed as to liability or amount; or
    (2) It is not acted upon in a reasonable time and written notice of 
the claim is given to the awarding official by the

[[Page 32533]]

senior official designated in the contract.


Sec. 900.219   How does an Indian tribe, tribal organization, or 
Federal agency submit a claim?

    (a) An Indian tribe or tribal organization shall submit its claim 
in writing to the awarding official. The awarding official shall 
document the contract file with evidence of the date the claim was 
received.
    (b) A Federal agency shall submit its claim in writing to the 
contractor's senior official, as designated in the contract.


Sec. 900.220   Does it make a difference whether the claim is large or 
small?

    Yes. The Contract Disputes Act requires that an Indian tribe or 
tribal organization making a claim for more than $100,000 shall certify 
that:
    (a) The claim is made in good faith,
    (b) Supporting documents or data are accurate and complete to the 
best of the Indian tribe or tribal organization's knowledge and belief;
    (c) The amount claimed accurately reflects the amount believed to 
be owed by the Federal government; and
    (d) The person making the certification is authorized to do so on 
behalf of the Indian tribe or tribal organization.


Sec. 900.221   What happens next?

    (a) If the parties do not agree on a settlement, the awarding 
official will issue a written decision on the claim.
    (b) The awarding official shall always give a copy of the decision 
to the Indian tribe or tribal organization by certified mail, return 
receipt requested, or by any other method which provides a receipt.


Sec. 900.222   What goes into a decision?

    A decision shall:
    (a) Describe the claim or dispute;
    (b) Refer to the relevant terms of the contract;
    (c) Set out the factual areas of agreement and disagreement;
    (d) Set out the actual decision, based on the facts, and outline 
the reasoning which supports the decision; and
    (e) Contain the following language:

    This is a final decision. You may appeal this decision to the 
Interior Board of Contract Appeals (IBCA), U.S. Department of the 
Interior, 4015 Wilson Boulevard, Arlington, VA 22203. If you decide 
to appeal, you shall, within 90 days from the date you receive this 
decision, mail or otherwise furnish written notice to the IBCA and 
provide a copy to the individual from whose decision the appeal is 
taken. The notice shall indicate that an appeal is intended, and 
refer to the decision and contract number. Instead of appealing to 
the IBCA, you may bring an action in the U.S. Court of Federal 
Claims or in the United States District Court within 12 months of 
the date you receive this notice.


Sec. 900.223   When does an Indian tribe or tribal organization get the 
decision?

    (a) If the claim is for more than $100,000, the awarding official 
shall issue the decision within 60 days of the day he or she receives 
the claim. If the awarding official cannot issue a decision that 
quickly, he or she shall tell you when the decision will be issued.
    (b) If the claim is for $100,000 or less, and you want a decision 
within 60 days, you shall advise the awarding official in writing that 
you want a decision within that period. If you advise the awarding 
official in writing that you do want a decision within 60 days, the 
awarding official shall issue the decision within 60 days of the day he 
or she receives your written notice.
    (c) If your claim is for $100,000 or less and you do not advise the 
awarding official that you want a decision within 60 days, or if your 
claim exceeds $100,000 and the awarding official has notified you of 
the time within which a decision will be issued, the awarding official 
shall issue a decision within a reasonable time. What is ``reasonable'' 
depends upon the size and complexity of your claim, and upon the 
adequacy of the information you have given to the awarding official in 
support of your claim.


Sec. 900.224   What happens if the decision does not come within that 
time?

    If the awarding official does not issue a decision within the time 
required under Sec. 900.223, the Indian tribe or tribal organization 
may treat the delay as though the awarding official has denied the 
claim, and proceed according to Sec. 900.222(e),


Sec. 900.225   Does an Indian tribe or tribal organization get paid 
immediately if the awarding official decides in its favor?

    Yes. Once the awarding official decides that money should be paid 
under the contract, the amount due, minus any portion already paid, 
should be paid as promptly as possible, without waiting for either 
party to file an appeal. Any payment which is made under this 
subsection will not affect any other rights either party might have. In 
addition, it will not create a binding legal precedent as to any future 
payments.


Sec. 900.226   What rules govern appeals of cost disallowances?

    In any appeal involving a disallowance of costs, the Board of 
Contract Appeals will give due consideration to the factual 
circumstances giving rise to the disallowed costs, and shall seek to 
determine a fair result without rigid adherence to strict accounting 
principles. The determination of allowability shall assure fair 
compensation for the work or service performed, using cost and 
accounting data as guides, but not rigid measures, for ascertaining 
fair compensation.


Sec. 900.227   Can the awarding official change the decision after it 
has been made?

    (a) The decision of the awarding official is final and conclusive, 
and not subject to review by any forum, tribunal or government agency, 
unless an appeal or suit is timely commenced as authorized by the 
Contract Disputes Act. Once the decision has been made, the awarding 
official may not change it, except by agreement of the parties, or 
under the following limited circumstances:
    (1) If evidence is discovered which could not have been discovered 
through due diligence before the awarding official issued the decision;
    (2) If the awarding official learns that there has been fraud, 
misrepresentation, or other misconduct by a party;
    (3) If the decision is beyond the scope of the awarding official's 
authority;
    (4) If the claim has been satisfied, released or discharged; or
    (5) For any other reason justifying relief from the decision.
    (b) Nothing in this subpart shall be interpreted to discourage 
settlement discussions or prevent settlement of the dispute at any 
time.
    (c) If a decision is withdrawn and a new decision is issued that is 
not acceptable to the contractor, the contractor may proceed with the 
appeal based on the new decision. If no new decision is issued, the 
contractor may proceed under Sec. 900.224.
    (d) If an appeal or suit is filed, the awarding official may modify 
or withdraw his or her final decision.


Sec. 900.228   Is an Indian tribe or tribal organization entitled to 
interest if it wins its claim?

    Yes. If an Indian tribe or tribal organization wins the claim, it 
will be entitled to interest on the amount of the award. The interest 
will be calculated from the date the awarding official receives the 
claim until the day it is paid. The interest rate will be the rate 
which the Secretary of the Treasury sets for the Renegotiation Board 
under the Renegotiation Act of 1951, Public Law 92-41, 26 U.S.C. 1212 
and 26 U.S.C. 7447.

[[Page 32534]]

Sec. 900.229   What role will the awarding official play during an 
appeal?

    (a) The awarding official shall provide any data, documentation, 
information or support required by the IBCA for use in deciding a 
pending appeal.
    (b) Within 30 days of receiving an appeal or learning that an 
appeal has been filed, the awarding official shall assemble a file 
which contains all the documents which are pertinent to the appeal, 
including:
    (1) The decision and findings of fact from which the appeal is 
taken;
    (2) The contract, including specifications and pertinent 
modifications, plans and drawings;
    (3) All correspondence between the parties which relates to the 
appeal, including the letter or letters of claims in response to which 
the decision was issued;
    (4) Transcripts of any testimony taken during the course of the 
proceedings, and affidavits or statements of any witnesses on the 
matter in dispute, which were made before the filing of the notice of 
appeal with the IBCA; and
    (5) Any additional information which may be relevant.


Sec. 900.230  What is the effect of a pending appeal?

    (a) Indian tribes and tribal organizations shall continue 
performance of a contract during the appeal of any claims to the same 
extent they would had there been no dispute.
    (b) A pending dispute will not affect or bar the negotiation or 
award of any subsequent contract or negotiation between the parties.

Subpart O--Conflicts of Interest


Sec. 900.231  What is an organizational conflict of interest?

    An organizational conflict of interest arises when there is a 
direct conflict between the financial interests of the contracting 
Indian tribe or tribal organization and:
    (a) The financial interests of beneficial owners of Indian trust 
resources;
    (b) The financial interests of the United States relating to trust 
resources, trust acquisitions, or lands conveyed or to be conveyed 
pursuant to the Alaska Native Claims Settlement Act 43 U.S.C. 1601 et 
seq.; or
    (c) An express statutory obligation of the United States to third 
parties. This section only applies if the conflict was not addressed 
when the contract was first negotiated. This section only applies where 
the financial interests of the Indian tribe or tribal organization are 
significant enough to impair the Indian tribe or tribal organization's 
objectivity in carrying out the contract, or a portion of the contract.


Sec. 900.232  What must an Indian tribe or tribal organization do if an 
organizational conflict of interest arises under a contract?

    This section only applies if the conflict was not addressed when 
the contract was first negotiated. When an Indian tribe or tribal 
organization becomes aware of an organizational conflict of interest, 
the Indian tribe or tribal organization must immediately disclose the 
conflict to the Secretary.


Sec. 900.233  When must an Indian tribe or tribal organization regulate 
its employees or subcontractors to avoid a personal conflict of 
interest?

    An Indian tribe or tribal organization must maintain written 
standards of conduct to govern officers, employees, and agents 
(including subcontractors) engaged in functions related to the 
management of trust assets.


Sec. 900.234  What types of personal conflicts of interest involving 
tribal officers, employees or subcontractors would have to be regulated 
by an Indian tribe?

    The Indian tribe or tribal organization would need a tribally-
approved mechanism to ensure that no officer, employee, or agent 
(including a subcontractor) of the Indian tribe or tribal organization 
reviews a trust transaction in which that person has a financial or 
employment interest that conflicts with that of the trust beneficiary, 
whether the tribe or an allottee. Interests arising from membership in, 
or employment by, an Indian tribe or rights to share in a tribal claim 
need not be regulated.


Sec. 900.235  What personal conflicts of interest must the standards of 
conduct regulate?

    The standards must prohibit an officer, employee, or agent 
(including a subcontractor) from participating in the review, analysis, 
or inspection of trust transactions involving an entity in which such 
persons have a direct financial interest or an employment relationship. 
It must also prohibit such officers, employees, or agents from 
accepting any gratuity, favor, or anything of more than nominal value, 
from a party (other than the Indian tribe) with an interest in the 
trust transactions under review. Such standards must also provide for 
sanctions or remedies for violation of the standards.


Sec. 900.236  May an Indian tribe elect to negotiate contract 
provisions on conflict of interest to take the place of this 
regulation?

    Yes. An Indian tribe and the Secretary may agree to contract 
provisions, concerning either personal or organizational conflicts, 
that address the issues specific to the program and activities 
contracted in a manner that provides equivalent protection against 
conflicts of interest to these regulations. Agreed-upon contract 
provisions shall be followed, rather than the related provisions of 
this regulation. For example, the Indian tribe and the Secretary may 
agree that using the Indian tribe's own written code of ethics 
satisfies the objectives of the personal conflicts provisions of this 
regulation, in whole or in part.

Subpart P--Retrocession and Reassumption Procedures


Sec. 900.240  What does retrocession mean?

    A retrocession means the return to the Secretary of a contracted 
program, in whole or in part, for any reason, before the expiration of 
the term of the contract.


Sec. 900.241  Who may retrocede a contract, in whole or in part?

    An Indian tribe or tribal organization authorized by an Indian 
tribe may retrocede a contract.


Sec. 900.242  What is the effective date of retrocession?

    The retrocession is effective on the date which is the earliest 
date among:
    (a) One year from the date of the Indian tribe or tribal 
organization's request;
    (b) The date the contract expires; or
    (c) A mutually agreed-upon date.


Sec. 900.243  What effect will an Indian tribe or tribal organization's 
retrocession have on its rights to contract?

    An Indian tribe or tribal organization's retrocession shall not 
negatively affect:
    (a) Any other contract to which it is a party;
    (b) Any other contracts it may request; and
    (c) Any future request by the Indian tribe or tribal organization 
to contract for the same program.


Sec. 900.244  Will an Indian tribe or tribal organization's 
retrocession adversely affect funding available for the retroceded 
program?

    No. The Secretary shall provide not less than the same level of 
funding that would have been available if there had been no 
retrocession.


Sec. 900.245  What obligation does the Indian tribe or tribal 
organization have with respect to returning property that was used in 
the operation of the retroceded program?

    On the effective date of any retrocession, the Indian tribe or 
tribal organization shall, at the request of the

[[Page 32535]]

Secretary, deliver to the Secretary all requested property and 
equipment provided under the contract which have a per item current 
fair market value, less the cost of improvements borne by the Indian 
tribe or tribal organization, in excess of $5,000 at the time of the 
retrocession.


Sec. 900.246  What does reassumption mean?

    Reassumption means rescission, in whole or in part, of a contract 
and assuming or resuming control or operation of the contracted program 
by the Secretary without consent of the Indian tribe or tribal 
organization. There are two types of reassumption: emergency and non-
emergency.


Sec. 900.247  Under what circumstances is a reassumption considered an 
emergency instead of non-emergency reassumption?

    (a) A reassumption is considered an emergency reassumption if an 
Indian tribe or tribal organization fails to fulfill the requirements 
of the contract and this failure poses:
    (1) An immediate threat of imminent harm to the safety of any 
person; or
    (2) Imminent substantial and irreparable harm to trust funds, trust 
lands, or interest in such lands.
    (b) A reassumption is considered a non-emergency reassumption if 
there has been:
    (1) A violation of the rights or endangerment of the health, 
safety, or welfare of any person; or
    (2) Gross negligence or mismanagement in the handling or use of:
    (i) Contract funds;
    (ii) Trust funds;
    (iii) Trust lands; or
    (iv) Interests in trust lands under the contract.


Sec. 900.248  In a non-emergency reassumption, what is the Secretary 
required to do?

    The Secretary must:
    (a) Notify the Indian tribes or tribal organizations served by the 
contract and the contractor in writing by certified mail of the details 
of the deficiencies in contract performance;
    (b) Request specified corrective action to be taken within a 
reasonable period of time, which in no case may be less than 45 days; 
and
    (c) Offer and provide, if requested, the necessary technical 
assistance and advice to assist the contractor to overcome the 
deficiencies in contract performance. The Secretary may also make a 
grant for the purpose of obtaining such technical assistance as 
provided in section 103 of the Act.


Sec. 900.249  What happens if the contractor fails to take corrective 
action to remedy the contract deficiencies identified in the notice?

    The Secretary shall provide a second written notice by certified 
mail to the Indian tribes or tribal organizations served by the 
contract and the contractor that the contract will be rescinded, in 
whole or in part.


Sec. 900.250  What shall the second written notice include?

    The second written notice shall include:
    (a) The intended effective date of the reassumption;
    (b) The details and facts supporting the intended reassumption; and
    (c) Instructions that explain the Indian tribe or tribal 
organization's right to a formal hearing within 30 days of receipt of 
the notice.


Sec. 900.251  What is the earliest date on which the contract will be 
rescinded in a non-emergency reassumption?

    The contract will not be rescinded by the Secretary before the 
issuance of a final decision in any administrative hearing or appeal.


Sec. 900.252  In an emergency reassumption, what is the Secretary 
required to do?

    (a) Immediately rescind, in whole or in part, the contract;
    (b) Assume control or operation of all or part of the program; and
    (c) Give written notice to the contractor and the Indian tribes or 
tribal organizations served.


Sec. 900.253  What shall the written notice include?

    The written notice shall include the following:
    (a) A detailed statement of the findings which support the 
Secretary's determination;
    (b) A statement explaining the contractor's right to a hearing on 
the record under Sec. 900.160 and Sec. 900.161 within 10 days of the 
emergency reassumption or such later date as the contractor may 
approve;
    (c) An explanation that the contractor may be reimbursed for actual 
and reasonable ``wind up costs'' incurred after the effective date of 
the rescission; and
    (d) A request for the return of property, if any.


Sec. 900.254  May the contractor be reimbursed for actual and 
reasonable ``wind up costs'' incurred after the effective date of 
rescission?

    Yes.


Sec. 900.255  What obligation does the Indian tribe or tribal 
organization have with respect to returning property that was used in 
the operation of the rescinded contract?

    On the effective date of any rescission, the Indian tribe or tribal 
organization shall, at the request of the Secretary, deliver to the 
Secretary all property and equipment provided under the contract which 
has a per item current fair market value, less the cost of improvements 
borne by the Indian tribe or tribal organization, in excess of $5,000 
at the time of the retrocession.


Sec. 900.256  Will a reassumption adversely affect funding available 
for the reassumed program?

    No. The Secretary shall provide at least the same level of funding 
that would have been provided if there had been no reassumption.

[FR Doc. 96-15793 Filed 6-21-96; 8:45 am]
BILLING CODE 4310-02-P