[Federal Register Volume 87, Number 9 (Thursday, January 13, 2022)]
[Rules and Regulations]
[Pages 2067-2078]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-28156]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

48 CFR Parts 326 and 352

[Docket No. O1-2012-0005]
RIN 0917-AA18


Acquisition Regulations: Buy Indian Act; Procedures for 
Contracting

AGENCY: Indian Health Service (IHS), Department of Health and Human 
Services HHS.

ACTION: Final rule.

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SUMMARY: The Secretary of the Department of Health and Human Services 
(HHS) is finalizing regulations guiding implementation of the Buy 
Indian Act, which provides the Indian Health Service (IHS) with 
authority to set-aside procurement contracts for Indian-owned and 
controlled businesses. This rule supplements the Federal Acquisition 
Regulations (FAR) and the Department of Health and Human Services 
Acquisition Regulations (HHSAR).

DATES: This rule is effective March 14, 2022.

FOR FURTHER INFORMATION CONTACT: For technical questions concerning 
this rule contact: Carl Mitchell, Director, Division of Regulatory 
Policy Coordination (DRPC), Office of Management Services (OMS), IHS, 
301-443-6384, [email protected]; or Santiago Almaraz, Acting 
Director, OMS, IHS 301-443-4872, [email protected].

SUPPLEMENTARY INFORMATION: In the Federal Register of November 10, 2020 
(85 FR 71596), IHS published a proposed rule entitled ``Acquisition 
Regulations; Buy Indian Act; Procedures for Contracting'' with a 60-day 
comment period.
    IHS received comments from Tribes and Tribal entities requesting an 
extension of the comment period due to the encompassing of the holiday 
season during the original comment period, as well as the 
disproportionately high impact of the pandemic on Indian Country. The 
commenters felt both of these events delayed stakeholders from being 
able to perform a complete and full review of the proposed rule and 
provide comments within the initial 60-day comment period.
    IHS concluded that it was reasonable to reopen and extend the 
comment period for an additional 60 days to allow any interested 
persons to submit comments on the proposed rule. On April 21, 2021, the 
IHS reopened and extended the comment period for 60

[[Page 2068]]

days with written or electronic comments on the proposed rule due by 
June 21, 2021.

I. Background
II. Statutory Authority
III. Overview of Final Rule
    A. Numbering System
    B. How This Rule Fits With the Indian Health Service and 
Department Acquisition Regulations
IV. Tribal Consultation
V. Development of Rule
    A. Publication and Comment Solicitation
    B. Summary of Comments
VI. Required Determinations

I. Background

    IHS is an agency of HHS whose principal mission is to provide 
health care to American Indians and Alaska Natives, 25 U.S.C. 1661. 
IHS' authority to provide health care services to the American Indian 
and Alaska Native people derives from the Snyder Act of 1921, 25 U.S.C. 
13, a broad, general authority to ``expend such moneys as Congress may 
from time to time appropriate, for the benefit, care, and assistance of 
the Indians,'' for, among other things, the ``relief of distress and 
conservation of health'', 25 U.S.C. 13. In 1954, Congress transferred 
this responsibility and other health care ``functions, 
responsibilities, authorities, and duties of the Department of the 
Interior'' (including the Snyder Act) to the Department of Health, 
Education, and Welfare, the predecessor of HHS. See Public Law 83-568, 
68 Stat. 674 (1954) (codified at 42 U.S.C. 2001 et seq.). The Transfer 
Act authorizes IHS to use the Buy Indian Act (25 U.S.C. 47) to carry 
out its health care responsibilities. IHS authority to use the Buy 
Indian Act is further governed by 25 U.S.C. 1633. This rule describes 
uniform administration procedures that the IHS will use in all of its 
locations to encourage procurement relationships with Indian labor and 
industry in the execution of the Buy Indian Act. IHS's current rules 
are codified at HHSAR, 48 CFR part 326, subpart 326.6.

II. Statutory Authority

    The Transfer Act authorizes the Secretary of HHS to ``make such 
other regulations as he deems desirable to carry out the provisions of 
the [Transfer Act]'', 42 U.S.C. 2003. The Secretary's authority to 
carry out functions under the Transfer Act has been vested in the 
Director of the IHS under 25 U.S.C. 1661. Because of these authorities, 
use of the Buy Indian Act is reserved to IHS and is not available for 
use by any other HHS component. IHS authority to use the Buy Indian Act 
is further governed by 25 U.S.C. 1633, which directs the Secretary to 
issue regulations governing the application of the Buy Indian Act to 
construction activities.

III. Overview of Final Rule

    This rule supplements the FAR and the HHSAR. This rule formalizes 
an administrative procedure for all IHS acquisition activities and 
locations to ensure uniformity for offers submitted by Indian labor and 
industry under solicitations set-aside under the Buy Indian Act and 
this part.

A. Numbering System

    This rule replaces the HHSAR, Subpart 326.6--Acquisitions Under the 
Buy Indian Act.

B. How This Rule Fits With the Indian Health Service and Department 
Acquisition Regulations

    This rule amends the HHSAR, which is maintained by the Assistant 
Secretary for Financial Resources (ASFR) pursuant to 48 CFR 301.103. 
ASFR is responsible for developing and preparing for issuance all 
acquisition regulatory material to be included in the HHSAR. 
Accordingly, the rule is being issued through coordination between IHS 
and ASFR. The rule is intended to establish Buy Indian Act acquisition 
policies and procedures for IHS that are consistent with rules proposed 
and/or adopted by the Department of the Interior (DOI).

IV. Tribal Consultation

    In accordance with 25 U.S.C. 1672 and Executive Order 13175, IHS 
held consultation sessions with the Tribes on the proposed version of 
this rule. The rule will more directly affect Indian economic 
enterprises and any contractors who use the Buy Indian Act for 
subcontracting.

V. Development of Rule

A. Publication and Comment Solicitation

    This rule has been in development at IHS since 2016, in 
collaboration with HHS/ASFR. Public comments received by IHS were 
reviewed, addressed, and incorporated in this final rule. Notification 
regarding a series of four public consultation sessions was published 
in the Federal Register on November 10, 2020 (85 FR 71596). The 
consultation sessions were conducted virtually on November 9, 2020; 
November 16, 2020; January 6, 2021; and June 9, 2021. IHS also 
published a proposed rule on November 10, 2020 (85 FR 71596). A summary 
of the comments received during these consultations and throughout the 
public comment period is provided below.

B. Summary of Comments

Indian Economic Enterprise (IEE) and Indian Small Business Economic 
Enterprise (ISBEE) Preference
    Comment: A Tribal organization supported allowing the Contracting 
Officer (CO) to engage in direct negotiations when only one offer is 
received. The commenter stated this is a welcome improvement that will 
minimize the CO's obligation to go through the deviation process and 
will likely increase the amount of contract awards to ISBEE/IEEs.
    Response: The CO may negotiate with the IEE if otherwise permitted 
under the applicable procurement strategy.
    Comment: A Tribal organization suggested eliminating GSA from the 
IHS required sources due to the awards to off-reservation entities. The 
Tribal organization recommended that offers from on-reservation 
entities have preference to those off-reservation.
    Response: IHS will prioritize Buy Indian set-asides ahead of small 
businesses that are not ISBEEs/IEEs and satisfy acquisitions priorities 
for the use of mandatory government sources, as required under FAR Part 
8.002.
    Comment: A Tribal organization supported the inclusion of priority 
use of the Buy Indian Act, as proposed, to ISBEEs and then to IEEs. The 
commenter felt it will be critical for the IHS CO to have the necessary 
time and resources to formulate a ``reasonable expectation'' that no 
competitive ISBEE offers will be received. The commenter also asked 
what identified benchmarks and/or types of engagement with Tribes and 
Tribal economic organizations, if any, will be deployed to inform this 
expectation.
    Response: IHS agrees with the comment and confirms that if the CO 
determines after market research that there is no reasonable 
expectation of obtaining offers from two or more ISBEEs, the CO may 
consider a set-aside for IEEs. To maintain consistency and fairness to 
all ISBEEs and IEEs, the CO will post all Buy Indian Act set-asides to 
the government point of entry, beta.sam.gov (formerly Federal Business 
Opportunities), unless other government advertising requirements apply.
    Comment: A Tribal organization commented that documenting the 
reasons why an ISBEE/IEE was chosen for a contract award is just as 
important as documenting why an ISBEE/IEE was not chosen. The commenter 
supported the language in Section 326.603-1(g) that requires a CO to 
document the reasons for an approved deviation determination when IEE 
offeror(s) were not reasonable or otherwise

[[Page 2069]]

unacceptable. The commenter also suggested that the CO's documentation 
include, at a minimum, an accurate list of all IEE offeror(s), a 
description of the communications issued during the solicitation 
process and a detailed explanation why each IEE offeror was not 
selected. The commenter felt such records are key to transparency and 
accountability in the implementation of the Buy Indian Act.
    Response: When awarding Buy Indian contracts, the CO will fulfill 
their usual responsibilities under the FAR. IHS will ensure strict 
guidelines COs will follow, to include sufficient documentation, when 
preparing the Buy Indian Act Deviation determination. Deviation 
approval thresholds are in place to ensure appropriate oversight review 
is conducted to support determinations. IHS will also require all 
approved deviations be reported and provided to IHS Headquarters to be 
posted for public access. IHS understands it is important for Indian 
Country and the public to have transparency on the categories in which 
deviations have been issued. This will assist ISBEEs and IEEs to 
categorically focus on these specific IHS procurement opportunities.
    Comment: Two Tribal organizations requested an explanation why 
preference would not be given under the Buy Indian Act to an IEE when 
an interested IEE is identified after a non-restricted solicitation has 
been issued. The commenters were concerned that non-restricted 
solicitations may be issued where use of an IEE restricted solicitation 
would have been appropriate and would have likely identified one or 
more qualified Indian-owned offerors. The commenters recommended 
requiring the IHS Head of Contracting Activity and the CO to prioritize 
IEE preference in accordance with the Buy Indian Act to the greatest 
extent possible. However, the commenters noted that there are certain 
circumstances where set-asides under the Buy Indian Act are infeasible. 
Where it is feasible, the commenters requested that IHS ensure, to the 
best of its ability, that appropriate solicitations are issued and 
market research conducted. The commenters suggested an express 
regulatory requirement that Buy Indian Act contracts be prioritized in 
the IHS procurement process, making the Buy Indian Act the starting 
point in all procurements.
    Response: When awarding Buy Indian contracts, the CO will fulfill 
their usual responsibilities under the FAR. Subpart 326.603 maintains 
that IHS give preference to IEEs through set-asides when acquiring 
supplies, general services, Architect-Engineer (A&E) services or 
construction. Additionally, Subpart 326.604 maintains that acquisitions 
of supplies, services and construction subject to commercial items or 
simplified acquisitions procedures, in accordance with FAR Part 12 and 
13 be set-aside exclusively for ISBEEs. Subpart 326.604 also maintains 
procedures the CO will follow if an IEE identifies interest to a 
solicitation that has not been set-aside under the Buy Indian Act. The 
COs are responsible for conducting sufficient market research and 
obtaining approval to deviate from the Buy Indian Act prior to issuing 
a solicitation not set-aside under the Buy Indian Act.
IEE and ISBEE Definition and Clarification
    Comment: A Tribal organization recommended that the definition of 
Indian Economic Enterprise (IEE) in the proposed new regulations at 48 
CFR 326.601 acknowledge the requirements of 43 U.S.C. 1626(e)(1) and 
(e)(2). The commenter recommended adding language to the definition of 
IEE to specify the inclusion of Alaska Native Corporations that meet 
the requirements of 43 U.S.C. 1626(e)(1) or (e)(2).
    Response: Following publication of the proposed rule, Congress 
amended the Buy Indian Act through Public Law 116-261 (December 30, 
2020) to incorporate the definition of ``Indian economic enterprise'' 
(IEE) set forth in 48 CFR 1480.201 (or successor regulations). To 
maintain consistency with the statute, IHS is utilizing the definition 
of an Indian economic enterprise in 48 CFR 1480.201. IHS will also 
utilize the definitions of ``Indian'' and ``Indian Tribe'' from 48 CFR 
1480.201 in the final rule, since these terms are included in the 
definition of IEE. As defined in 48 CFR 1480.201, the term ``Indian 
Tribe'' encompasses a Tribe, band, nation or other recognized group or 
community that is recognized as eligible for the special programs and 
services by the United States to Indians because of their status as 
Indians. This definition also includes Alaska Native village or 
regional or village corporation under the Alaska Native Claims 
Settlement Act (ANCSA).
    Comment: A Tribe commented in support of the proposed definition of 
an Indian Economic Enterprise. The commenter felt that the minimum 
threshold of at least 51 percent combined Native ownership and 
management control by at least one or more qualified individual AI/ANs 
both aligns with the Act and is appropriately tailored to ensure that 
it benefits only majority Indian-owned businesses. Further, the 
commenter supported the separate definition of federally recognized 
Tribe and Alaska Native Corporation.
    Response: As noted in response to the comment above, Congress 
amended the Buy Indian Act following publication of the proposed rule 
and incorporated the definition of ``Indian Economic Enterprise'' set 
forth in 48 CFR 1480.201 (or successor regulations). To maintain 
consistency with the statute, IHS is utilizing the definition of 
``Indian Economic Enterprise'' (IEE) set forth in 48 CFR 1480.201. IHS 
is also utilizing the definitions of other terms in 48 CFR 1480.201, 
such as ``Indian Tribe,'' since they are included in the IEE 
definition.
    Comment: A Tribe commented in support of the multiple pathways for 
responding to a change in a contractor's ownership status during the 
term of a contract award. The commenter felt that changes in ownership 
status may be caused by a variety of factors and allowing more than one 
response mechanism recognizes that. The commenter recommended the 
inclusion of a new subsection clarifying the process when a contractor 
is sanctioned under Section 326.606-1. If a contract were to be 
terminated for default before an initiated construction is completed, 
the commenter suggested that the CO consult the solicitation records 
and offer the second choice ISBEE/IEE offerors. The commenter also 
recommended allowing the existing contractor facing termination to 
continue work on the project until a new rapid solicitation process can 
be completed. The commenter felt that project completion is important 
and should be facilitated in the new regulations by minimizing the 
potential for disruption of the underlying contract.
    Response: When awarding Buy Indian contracts, the contracting 
officer will fulfill their usual responsibilities under the FAR and 
adhere to those processes as outlined in FAR Part 49.
    Comment: A Tribal organization commented it was pleased to see the 
ISBEE/IEE verification process, which instructs the CO to make every 
effort to allow an offeror to correct the information submitted to 
verify its status as an eligible ISBEE or IEE. The commenter felt this 
language aligns with the spirit of the Buy Indian Act and will enable 
the IHS to avoid unnecessarily disqualifying an offeror in situations 
where a supplemental response would address an issue.
    Response: These provisions are included in the final regulation. 
The CO will maintain fairness in all acquisitions and fulfill their 
usual responsibilities under the FAR.

[[Page 2070]]

    Comment: A Tribe recommended identifying the specific timeframes, 
types of outreach and follow-up actions that would qualify an offeror 
as ``not responsive'' for the purposes of verifying submitted 
information and IEE representation status. As written, the commenter 
thought the determination would be in the CO's discretion. For 
consistent application and expectations, the commenter strongly 
recommended that a uniform standard be stated.
    Response: The CO will maintain fairness in all acquisitions and 
fulfill their usual responsibilities under the FAR. The cognizant CO 
will determine a reasonable response time for the purposes of verifying 
IEE representation. As such, specified timeframes are identified in 
Subpart 326.607, Challenges to Representation, where a CO may question 
the representation of an IEE at any time.
    Comment: A Tribe felt that it is important to highlight the need 
for support of investment in ISBEE and IEE development, beyond the 
scope of the proposed rule. The commenter noted that implementation of 
the Buy Indian Act depends on the availability of qualified IEEs. The 
commenter also noted that Tribes and individual American Indians and 
Alaska Natives face substantial barriers in developing the capital, 
personnel, infrastructure, business networks, supply chains, etc. to 
compete for federal contracts. The commenter pointed to the Government 
Accountability Office's July 2015 report (Buy Indian Act: Bureau of 
Indian Affairs and Indian Health Service Need Greater Insight into 
Implementation at Regional Offices, GAO-15-588) and the data in Figure 
4, regarding IHS total contract obligations and Indian-owned 
obligations. The commenter felt that meaningful federal commitment is 
needed to improve the Buy Indian Act and take into consideration how it 
can better develop qualified ISBEEs and IEEs in Indian Country. The 
commenter thought this would likely require interagency coordination 
and leveraging of available resources, as well as outreach in Indian 
Country to educate Indian-owned business on contracting opportunities. 
The commenter recommended that the issue be taken to the respective 
Tribal advisory committees of agencies such as HHS, Department of the 
Treasury, and Department of Labor for the deliberation of Tribal 
leaders.
    Response: IHS is interested in collaborating with Tribes and other 
Federal agencies to provide more data and insight on how IHS is meeting 
the requirements of the Buy Indian Act. IHS, in collaboration with DOI 
BIA, is actively exploring how to publicly share information related to 
Buy Indian Act performance to provide visibility to Tribes. 
Additionally, once the HHSAR Buy Indian Act rule is finalized, IHS will 
coordinate, plan and conduct training, and disseminate other helpful 
information routinely to internal and external stakeholders and all IHS 
acquisition workforce.
Covered Construction
    Comment: A Tribal organization commented that it welcomes the 
proposed elimination of ``covered'' construction contracts. It 
expressed discontent with the decision in Andrus v. Glover Construction 
Co. and noted the ability to utilize the Buy Indian Act will be a great 
benefit to ISBEEs/IEEs.
    Response: The decision in Andrus v. Glover Construction Co. did not 
directly impact IHS. However, to avoid any potential confusion, we are 
eliminating the word ``covered'' in reference to construction 
contracts.
Buy Indian Deviation/Challenges
    Comment: A Tribal organization suggested that the proposed 
deviation thresholds be revised to reflect the business acumen of the 
warranted CO, noting that $250,000 is the Simplified Acquisition 
Threshold (SAT) and suggesting that warranted COs should have the 
authority to approve a Buy Indian Act deviation up to the SAT. The 
commenter also suggested specifying the Chief Contracting Officer (CCO) 
(or IHS DAP Director, absent a CCO) for deviations exceeding $250,000 
but not exceeding $700,000.
    Response: To maintain required oversight of all deviation 
determinations, IHS will ensure specific authorized approvals for 
larger dollar proposed contract actions. To ensure compliance and 
consistency, IHS will require all approved deviations be reported to 
IHS Headquarters on a quarterly basis.
    Comment: Two Tribal organizations expressed concern with how IHS 
will determine fair market price and reasonableness. The commenters 
recommended a sliding scale be utilized to determine fair and 
reasonable pricing based on the government estimate of each procurement 
action. The commenters were concerned about potential protests on the 
basis of fair and reasonable pricing. The commenters also recommended a 
tiered approach in determining the competitive range, such as allowing 
the IEE to propose a new scope and fee when they are within 10 percent 
of the winning proposal/bid.
    Response: When awarding Buy Indian contracts, the contracting 
officer will fulfill their usual responsibilities under the FAR. IHS' 
ability to allow for an IEE to propose a new scope and fee would not be 
allowable unless such discussions are made with and available to all 
offerors.
    Comment: A Tribal organization requests clarification in the final 
rule of applicable procedures when a deviation determination is 
disapproved. The commenter felt this situation was not addressed in the 
draft regulations. The commenter recommended that the CO first be 
required to reassess the viability of the ISBEE/IEE offers received and 
make a selection from the existing solicitation pool, but if no such 
offers were acceptable, the CO could cancel the solicitation and issue 
a new IEE set-aside. The commenter felt this would be an efficient 
approach that would avoid the imposition of duplicative administrative 
burdens on both offerors and the federal government.
    Response: The CO will fulfill their usual responsibilities under 
the FAR. IHS believes the current language and additional process 
details set forth in the final rule are sufficient and address this 
concern.
Buy Indian Act Compliance
    Comment: A Tribe and Tribal organization recommended that IHS 
include a new section on internal accountability and communications. 
The commenters felt that establishing efficient monitoring and 
compliance protocols, as well as communications standards, would 
enhance the success of the Buy Indian Act in promoting economic growth 
for Tribal Nations. The commenters recommend requiring COs at each IHS 
Area Office to collect, aggregate, and maintain accurate data to 
measure progress in the implementation of the Buy Indian Act. The 
commenters suggested that the data collected should reflect outreach 
and coordination efforts with Tribal Nations, and status reports on 
anticipated, pending, and completed ISBEE and IEE solicitations. The 
commenters noted that this should not include any additional data 
collection or reporting requirements for Tribal Nations. The commenters 
suggested requiring COs at each IHS Area Office to submit quarterly and 
annual reports to IHS Headquarters on the status of completed 
solicitations, any deviation determinations, updates on current Buy 
Indian Act contracts, and information on any pending or planned 
solicitations. The commenters felt that the systematic monitoring, 
compliance protocols and communications standards are critically needed 
to make meaningful, sustainable gains in the long-term success of the 
Buy Indian Act and its underlying

[[Page 2071]]

policy of advancing economic self-sufficiency and growth in Indian 
Country. The commenters further suggested that the HHS include review 
of Buy Indian Act contracts as part of its regular procurement review 
process and provide an annual report to Congress on compliance with Buy 
Indian Act requirements, aggregate data on ISBEE and IEE contracts, 
developments, and ongoing challenges in implementation.
    Response: When the HHS Buy Indian Act rule is finalized, IHS plans 
to update its internal Indian Health Manual (IHM) in support of the Buy 
Indian Act to provide for specific processes and details on training, 
reporting and compliance. Each IHS Area Office will be required to 
report quarterly on all Deviations and Challenges. IHS, Tribes and the 
public can access public data in beta.sam.gov to generate reporting of 
all IHS obligations set-aside under the Buy Indian Act.
    Comment: Two Tribal organizations commented that, in order to 
ensure and improve the success of the Buy Indian Act, IHS needed to 
develop ongoing evaluation mechanisms in policies and procedures to 
gather input from Tribal Nations on barriers to the Act's 
implementation. The commenters felt that one such barrier would be the 
``rule of two'' in procurement decisions. The commenters noted that 
this has been a barrier to the Buy Indian Act program and the 
commenters felt it could be resolved if IHS and other federal agencies 
considered the input of Tribal Nation businesses. The commenters 
recommended that IHS hold annual Tribal Listening Sessions with each 
IHS Area to receive input on successes and challenges to the Buy Indian 
Act implementation, which could inform IHS of the need to update 
policies/procedures/guidance and the need for Tribal consultation on 
the development of further updates to its Buy Indian Act regulations. 
The commenters recommended the development of a mechanism to evaluate 
the Buy Indian Act implementation process, to make the best use of the 
Buy Indian Act in serving Indian Country and filling covered 
procurement contracts.
    Response: COs are required by Subpart 326.603-1(e) and (f) to 
perform market research. COs may seek a deviation from the requirement 
to set-aside for ISBEEs or IEEs only if there is no reasonable 
expectation of obtaining offers that will be competitive. When a 
deviation is determined to be necessary, COs are required to document 
and defend the rationale. If a CO must deviate from the Buy Indian Act 
preferences they must use the procedures of Subpart 326.603-3. 
Additionally, IHS is interested in collaborating with Tribes to provide 
more data and insight on how IHS is meeting the requirements of the Buy 
Indian Act and plans to collaborate with BIA on how to publicly share 
information related to Buy Indian Act performance to provide visibility 
to Tribes.
    Comment: A Tribe commented that DOI recently held Tribal 
consultations on the proposed updates to its Buy Indian Act 
regulations, which are intended to eliminate barriers to IEEs from 
competing on certain construction contracts; expand the ability for 
IEEs to subcontract work; clarify preferences for IEEs; and ensure 
greater preference to IEEs when a deviation from the Buy Indian Act is 
necessary. The commenter recommended that IHS issue an update to its 
NPRM to reflect DOI's current draft, which DOI shared with IHS. 
Although DOI is still considering its proposed changes, the commenter 
felt that IHS has the opportunity to ensure consistency with 
implementing the Buy Indian Act regulations. Furthermore, the commenter 
recommended that IHS and DOI work collaboratively to update the Buy 
Indian Act regulations to ensure that there is no further confusion 
regarding participation in the program.
    Response: IHS is committed to implementing the Indian Community 
Economic Enhancement Act requirement to harmonize the regulations 
implementing the Buy Indian Act and will continue to coordinate and 
collaborate with DOI/BIA.
    Comment: A Tribal organization recommended language requiring the 
COs to insert the clause at HHSAR 352.226-2, Indian Preference Program, 
and the clause at HHSAR 326.504, Tribal Preference Requirements, in all 
solicitations and contracts when the contract award is to be made under 
the authority of the Buy Indian Act. The commenter felt that the 
inclusion of this requirement would bring the proposed HHSAR Section 
326.6 into greater alignment with the DOI's regulations and reaffirm 
the preference to Indians in employment, training, and subcontracting.
    Response: Pursuant to HHSAR Subpart 326.5, Indian Preference in 
Employment, Training and Subcontracting Opportunities, IHS already 
includes clauses 352.226-1, Indian Preference and 352.226-2, Indian 
Preference Program in all service, A&E and constructions contracts. 
HHSAR Subpart 326.5 is not part of the rule to update Subpart 326.6, 
Acquisitions Under the Buy Indian Act.
General Comments
    Comment: A Tribal organization recommended that the HHSAR 
regulations parallel the DOI's rules that extend the Buy Indian Act's 
procurement authority more broadly than the purview of the Assistant 
Secretary of Indian Affairs (ASIA). The commenter noted that the DOI 
regulations permit the Secretary to delegate authority under the Buy 
Indian Act to a bureau or office within the Department other than BIA, 
48 CFR 1480.402(b). The commenter felt that the current draft 
amendments to the HHSAR should be revised to allow use of the Buy 
Indian Act authority by other parts of HHS, in addition to the IHS, in 
order to be parallel.
    Response: As further explained under the ``Statutory Authority'' 
section of this notice, use of the Buy Indian Act is not available to 
any HHS component other than IHS.
    Comment: A Tribal organization commented that all current 
procurement officers need to receive training on the Buy Indian Act and 
its importance from the Native American/Tribe's perspective. The 
commenter also recommended that all new procurement officers spend at 
least a day learning the history of Native Americans, the more recent 
acts of Congress, and the information needed to perform due diligence 
or sources sought under the Buy Indian Act.
    Response: Once the HHS Buy Indian Act rule is updated and 
finalized, IHS will begin the process of updating its IHM, Chapter 5, 
Section 6, Buy Indian Policy, to define and implement training, 
compliance and reporting measures to be taken to ensure the agency 
fully adheres to the Buy Indian Act. The estimated costs to IHS in 
conducting these actions and measures in-house will be very minimal.
Other Comments
    Comment: A commenter recommended including a few items not directly 
related to the HHS Buy Indian Act proposed rule. These items include 
cross agency coordination on law enforcement acquisitions and through a 
consolidated database system. The commenter also suggested auditing and 
addressing the new organizational structures for completeness, and 
modernization to a coordinated system that manages and tracks 
procurements.
    Response: While these comments are beyond the scope of this 
regulation, because this regulation addresses only HHS's implementation 
of the Buy Indian Act, HHS/IHS appreciates this input.

[[Page 2072]]

VI. Required Determinations

    1. Regulatory Planning and Review (Executive Orders 12866 and 
13563). Executive Order 12866 provides that the Office of Information 
and Regulatory Affairs (OIRA) will review all significant rules. OIRA 
has determined that this rule is not a ``significant regulatory 
action'' under section 3(f) of Executive Order 12866. Executive Order 
13563 reaffirms the principles of Executive Order 12866 while calling 
for improvements in the nation's regulatory system to promote 
predictability, to reduce uncertainty, and to use the best, most 
innovative, and least burdensome tools for achieving regulatory ends. 
The Executive Order directs agencies to consider regulatory approaches 
that reduce burdens and maintain flexibility and freedom of choice for 
the public, where these approaches are relevant, feasible, and 
consistent with regulatory objectives. Executive Order 13563 emphasizes 
further that regulations must be based on the best available science 
and that the rulemaking process must allow for public participation and 
an open exchange of ideas. IHS has developed this rule in a manner 
consistent with these requirements.
    2. Regulatory Flexibility Act. HHS certifies that the adoption of 
this final rule will not have a significant economic impact on a 
substantial number of small entities as they are defined in the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Therefore, under 5 
U.S.C. 605(b), this rulemaking is exempt from the initial and final 
regulatory flexibility analysis requirements of sections 603 and 604.
    3. Small Business Regulatory Enforcement Fairness Act. This final 
rule is not a major rule under the Small Business Regulatory 
Enforcement Fairness Act (5 U.S.C. 804(2)). This rule does not have an 
annual effect on the economy of $100 million or more nor does it cause 
a major increase in costs or prices for consumers, individual 
industries, Federal, State, or local government agencies, or geographic 
regions. This final rule does not have significant adverse effects on 
competition, employment, investment, productivity, innovation, or the 
ability of U.S.-based enterprises to compete with foreign-based 
enterprises.
    4. Unfunded Mandates Reform Act. This final rule does not impose an 
unfunded mandate on State, Local, or Tribal Governments (SLTG) or the 
private sector of more than $100 million per year. The rule does not 
have a significant or unique effect on SLTGs, or the private sector nor 
does the rule impose requirements on SLTGs. This final rule does not 
result in the expenditures of funds by SLTGs, in aggregate, or by the 
private sector of $100 million or more in any one year. As such, a 
prepared written statement containing the information required by the 
Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.) is not required.
    5. Takings (Executive Order 12630). This final rule does not affect 
a taking of private property or otherwise have taking implications 
under Executive Order 12630. A takings implication assessment is not 
required.
    6. Federalism (Executive Order 13132). Under the criteria in 
section 1 of Executive Order 13132, this final rule does not have 
sufficient federalism implications to warrant the preparation of a 
federalism summary impact statement. This rule would not substantially 
and directly affect the relationship between the Federal and State 
Governments. A Federalism summary impact statement is not required.
    7. Civil Justice Reform (Executive Order 12988). This final rule 
complies with the requirements of Executive Order 12988. Specifically, 
this rule (1) meets the criteria of section 3(a) of this requiring 
Executive Order that all regulations be reviewed to eliminate errors 
and ambiguity and be written to minimize litigation; and (2) meets the 
criteria of section 3(b)(2) of this Executive Order requiring that all 
regulations be written in clear language and contain clear legal 
standards.
    8. Consultation with Indian Tribes (Executive Order 13175). IHS 
strives to strengthen its government-to-government relationship with 
Indian Tribes through a commitment to consultation with Indian Tribes 
and recognition of their right to self-governance and Tribal 
sovereignty. We have evaluated this rule under the Department and 
Agency consultation policies and under the criteria in Executive Order 
13175 and have determined there may be substantial direct effects on 
federally recognized Indian Tribes that will result from this 
rulemaking. In addition, we note that 25 U.S.C. 1672 expressly directs 
consultation prior to amendment of the rule. The IHS held consultation 
sessions with the Tribes as stated in the Background section of this 
preamble.
    9. Paperwork Reduction Act, 44 U.S.C. 3501, et seq. This final rule 
requires offerors to certify whether they met the definition of an 
``Indian Economic Enterprise'' and to provide the name of the federally 
recognized Indian Tribe or Alaska Native Corporation with which they 
are affiliated. These statements are considered simple representations 
that an offeror submitted to support its claim for eligibility to 
participate in contract awards under the authority of the Buy Indian 
Act (25 U.S.C. 47, as amended). Because these statements are a simple 
certification or acknowledgment related to a transaction, they do not 
qualify as a collection of information under the Paperwork Reduction 
Act. See 5 CFR 1320.3(h).
    10. National Environmental Policy Act. This rule does not 
constitute a major Federal action significantly affecting the quality 
of the human environment. A detailed statement under the National 
Environmental Policy Act of 1969 (NEPA) is not required because the 
rule is covered by the categorical exclusion listed in 43 CFR 
46.210(c). We have also determined that the rule does not involve any 
of the extraordinary circumstances listed in 43 CFR 46.215 that would 
require further analysis under NEPA.
    11. Clarity of this Regulation. We are required by Executive Orders 
12866 (section 1(b)(12)), and 12988 (section 3(b)(1)(B)), and 13563 
(section 1(a)), and by the Presidential Memorandum of June 1, 1998, to 
write all rules in plain language. This means that each rule we publish 
must (1) be logically organized; (2) use the active voice to address 
readers directly; (3) use common, everyday words and clear language 
rather than jargon; (4) be divided into short sections and sentences; 
and (5) use lists and tables wherever possible.

List of Subjects

48 CFR Part 326

    Government procurement, Indians, Indians--business and finance, 
Reporting and recordkeeping requirements.

48 CFR Part 352

    Government procurement.

    For the reasons set out in the preamble, HHS amend parts 326 and 
352 as follows:

CHAPTER 3--HEALTH AND HUMAN SERVICES

Subchapter D--Socioeconomic Programs

PART 326--OTHER SOCIOECONOMIC PROGRAMS

0
1. The authority citation for part 326 is revised to read as follows:

    Authority:  5 U.S.C. 301, 25 U.S.C. 47, 25 U.S.C. 1633, 41 
U.S.C. 253(c)(5), and 42 U.S.C. 2003.


0
2. Revise subpart 326.6 to read as follows:

[[Page 2073]]

Subpart 326.6--Acquisitions Under the Buy Indian Act

326.600--General
326.600-1 Scope of part.
326.600-2 Buy Indian Act acquisition regulations.
326.601--Definitions
326.601 Definitions.
326.602--Applicability
326.602-1 Scope of part.
326.602-2 Restrictions on the use of the Buy Indian Act.
326.603--Policy
326-603-1 Requirement to give preference to Indian Economic 
Enterprises.
326-603-2 Delegations and responsibility.
326-603-3 Deviations.
326.604--Procedures
326.604-1 General.
326.604-2 Procedures for Acquisitions under the Buy Indian Act.
326.604-3 Debarment and suspension.
326.605--Contract Requirements
326.605-1 Subcontracting limitations.
326.605-2 Performance and payment bonds.
326.606--Representation by an Indian Economic Enterprise Offeror
326.606-1 General.
326.606-2 Representation provision.
326.606-3 Representation process.
326.607--Challenges to Representation
326.607-1 Procedure.
326.607-2 Receipt of Challenge.
326.607-3 Award in the face of Challenge.
326.607-4 Challenge not timely.

Subpart 326.6--Acquisitions Under the Buy Indian Act


326.600  General.


326.600-1   Scope of part.

    This subpart implements policies and procedures for the procurement 
of supplies, general services, architect and engineer (A&E) services, 
or construction while giving preference to Indian Economic Enterprises 
under authority of the Buy Indian Act (25 U.S.C. 47).


326.600-2   Buy Indian Act acquisition regulations.

    (a) This subpart supplements Federal Acquisition Regulation (FAR) 
and Health and Human Services Acquisition Regulation (HHSAR) 
requirements to meet the needs of the Department of Health and Human 
Services (HHS), Indian Health Service (IHS) in implementing the Buy 
Indian Act.
    (b) This subpart is under the direct oversight and control of the 
Head of Contracting Activity (HCA), within the Office of Management 
Services (OMS)--IHS, HHS. The HCA, in consultation with the Assistant 
Secretary for Financial Resources (ASFR) and the Senior Procurement 
Executive (SPE), is responsible for promulgating this subpart, and 
following its enactment, will be primarily responsible for implementing 
its terms.
    (c) Acquisitions conducted under this subpart are subject to all 
applicable requirements of the FAR and HHSAR, as well as internal 
policies, procedures, or instructions issued by IHS. After the FAR, 
this HHSAR subpart would take precedence over any inconsistent IHS 
policies, procedures, or instructions.


326.601   Definitions.

    Alaska Native Claims Settlement Act (ANCSA) means Public Law 92-203 
(December 18, 1971), 85 Stat. 688, codified at 43 U.S.C. 1601-1629h.
    Alaska Native Corporation means any Regional Corporation, any 
Village Corporation, any Urban Corporation, and any Group Corporation 
as those terms are defined by ANCSA.
    Buy Indian Act means section 23 of the Act of June 25, 1910, 
codified at 25 U.S.C. 47.
    Chief Contracting Officer (CCO) means a person with authority to 
enter into, administer, or terminate contracts and make related 
determinations and findings on behalf of the U.S. Government for the 
respective IHS Areas.
    Contracting Officer (CO) means a person with the authority to enter 
into, administer, or terminate contracts and make related 
determinations and findings on behalf of the U.S. Government.
    Construction means the planning, design, construction and 
renovation, including associated architecture and engineering services, 
of IHS facilities pursuant to 25 U.S.C. 1631 and in the construction of 
safe water and sanitary waste disposal facilities pursuant to 25 U.S.C. 
1632.
    Deviation means an exception to the requirement to use the Buy 
Indian Act in fulfilling an acquisition requirement subject to the Buy 
Indian Act.
    Fair market price means a price based on reasonable costs under 
normal competitive conditions and not on lowest possible cost, as 
determined in accordance with FAR 19.202-6(a).
    Indian means a person who is an enrolled member of an Indian Tribe 
or ``Native'' as defined in the Alaska Native Claims Settlement Act.
    Indian Health Service (IHS) means operations at all administrative 
levels of IHS, including Headquarters, Area Offices, and Service Units 
(inclusive of clinics).
    Indian Economic Enterprise (IEE) means any business activity owned 
by one or more Indians or Indian Tribes that is established for the 
purpose of profit provided that: The combined Indian or Indian Tribe 
ownership must constitute not less than 51 percent of the enterprise; 
the Indians or Indian Tribes must, together, receive at least a 
majority of the earnings from the contract; and the management and 
daily business operations of an enterprise must be controlled by one or 
more individuals who are Indians. To ensure actual control over the 
enterprise, the individuals must possess requisite management or 
technical capabilities directly related to the primary industry in 
which the enterprise conducts business. The enterprise must meet these 
requirements throughout the following time periods:
    (1) At the time an offer is made in response to a written 
solicitation;
    (2) At the time of the contract award; and
    (3) During the full term of the contract.
    Indian Tribe means an Indian Tribe, band, nation, or other 
recognized group or community that is recognized as eligible for the 
special programs and services provided by the United States to Indians 
because of their status as Indians, including any Alaska Native village 
or regional or village corporation under the Alaska Native Claims 
Settlement Act (Pub. L. 92-203, 85 Stat. 688; 43 U.S.C. 1601).
    Indian Small Business Economic Enterprise (ISBEE) means an IEE that 
is also a small business concern established in accordance with the 
criteria and size standards of 13 CFR part 121.
    Interested Party means an IEE that is an actual or prospective 
offeror whose direct economic interest would be affected by the 
proposed or actual award of a particular contract set-aside pursuant 
the Buy Indian Act.
    List of Federally Recognized Tribes means the list published 
annually in the Federal Register identifying Indian entities that are 
recognized by and eligible to receive services from the United States 
Department of the Interior (DOI), Bureau of Indian Affairs (BIA).
    Transfer Act of 1954 means the authority of transferred 
responsibility and other health care ``functions, responsibilities, 
authorities and duties of the Department of the Interior'' (including 
the Snyder Act) to Health, Education and Welfare, the predecessor of 
the HHS. Public Law 83-568, 68 Stat. 674 (1954) (codified at 42 U.S.C. 
2001 et seq.). The Transfer Act authorizes IHS to use the Buy Indian 
Act (25 U.S.C. 47) to carry out its health care responsibilities.


326.602  Applicability.


326.602-1   Scope of part.

    Except as provided in HHSAR 326.602-2, this subpart applies to all

[[Page 2074]]

acquisitions above the micro-purchase threshold, including simplified 
acquisitions, made by IHS, and any HHS operating divisions or agency 
outside of IHS conducting acquisitions on behalf of IHS.


326.602-2   Restrictions on the use of the Buy Indian Act.

    (a) IHS may not use the authority of the Buy Indian Act and the 
procedures contained in this subpart to award intergovernmental 
contracts to Tribal organizations to plan, operate, or administer 
authorized IHS programs (or parts thereof) that are within the scope 
and intent of the Indian Self-Determination and Education Assistance 
Act (ISDEAA) (Pub. L. 93-638). IHS must use the Buy Indian Act solely 
to award procurement contracts to IEEs. Contracts subject to ISDEAA are 
not covered under the FAR and are codified separately under 25 CFR part 
900 and 42 CFR part 137.
    (b) Contract health services (referred to administratively as 
Purchased/Referred Care services) are defined at 25 U.S.C. 1603 as 
excluding services provided by Buy Indian Act contractors. Accordingly, 
the Buy Indian Act may not be used to obtain services through the 
Purchased/Referred Care program (previously Contract Health Services). 
Purchase orders for care authorized pursuant to 42 CFR part 136 subpart 
C may be issued without regard to the provisions of this Part.


326.603  Policy.


326.603-1   Requirement to give preference to Indian Economic 
Enterprises.

    (a) Except as provided by 25 U.S.C. 1633, IHS must use the 
negotiation authority of the Buy Indian Act to give preference to IEEs 
whenever the use of that authority is practicable. Thus, IHS may use 
the Buy Indian Act to give preference to IEEs through set-asides when 
acquiring supplies, general services, A&E services, or construction to 
meet IHS needs and requirements. The Buy Indian Act does not apply when 
mandatory government sources are available, as required by FAR Part 
8.002.
    (b) Contract awards under the authority of the Buy Indian Act can 
be pursued via the acquisition procedures prescribed in this HHSAR 
subpart in conjunction with the procedures from FAR part 12, 13, 14, 15 
and/or 16.
    (c) The CO will give priority to ISBEEs for all purchases, 
regardless of dollar value, by utilizing ISBEE set-aside to the maximum 
extent possible. COs when prioritizing ISBEEs may consider either:
    (1) A set-aside for ISBEEs; or
    (2) A sole source award to an ISBEE, as authorized under the FAR.
    (d) If the CO determines after market research that there is no 
reasonable expectation of obtaining offers from two or more ISBEEs that 
will be competitive in terms of market price, product quality, and 
delivery capability, the CO may consider either:
    (1) A set-aside for IEEs; or
    (2) A sole source award to an IEE, as authorized under the FAR.
    (e) If the CO determines after market research that there is no 
reasonable expectation of obtaining two or more offers that will be 
competitive in terms of market price, product quality, and delivery 
capability, from ISBEEs and/or IEEs, then the CO shall follow the 
Deviation process under HHSAR 326.603-3.
    (f) Price analysis technique(s) provided in FAR 15.404-1(b) shall 
be used in determination of price fair and reasonableness when only one 
offer is received from a responsible ISBEE or IEE in response to an 
acquisition set-aside under paragraph (d)(1) or (e)(1) of this section:
    (1) If the offer meets the technical capability requirements and is 
not at a reasonable and fair market price, then the CO may negotiate 
with that enterprise for a reasonable and fair market price, as 
authorized under the FAR.
    (2) If the offer meets the technical capability requirements and is 
at a reasonable and fair market price, then the CO must:
    (i) Make an award to that enterprise;
    (ii) Document the reason only one offer was considered; and
    (iii) Initiate action to increase competition in future 
solicitations.
    (g) If the offers received in response to an acquisition set-aside 
under paragraph (c) or (d) of this section are determined to be 
unreasonable or otherwise unacceptable upon price and/or technical 
evaluations, then the CO must follow the Deviation process under HHSAR 
326.603-3. The CO must document in the deviation determination the 
reasons why the IEE offeror(s) were not reasonable or otherwise 
unacceptable.
    (1) If a deviation determination is approved, the CO must cancel 
the current ISBEE or IEE set-aside solicitation and inform all offerors 
in writing.
    (2) If a deviation determination is approved, the CO must identify, 
based on current available market research, an alternate set-aside or 
procurement method.
    (3) When the solicitation of the same requirement is posted, the CO 
must inform all previous offerors in writing of the solicitation 
number.
    (h) With respect to construction, the provisions of 25 U.S.C. 1633 
shall apply. Under 25 U.S.C. 1633, IHS may give a preference to an IEE 
unless the agency finds, after considering the evaluation criteria 
listed in 25 U.S.C. 1633, that the project to be contracted for will 
not be satisfactory or cannot be properly completed or maintained under 
the proposed contract.


326.603-2   Delegations and responsibility.

    (a) The Director, IHS--exercises the authority of the Buy Indian 
Act pursuant to the Transfer Act of 1954, as delegated pursuant to 25 
U.S.C. 1661. Under 25 U.S.C. 1661, the Director is authorized ``to 
enter into contracts for the procurement of goods and services to carry 
out the functions of the IHS.'' IHS exercises this authority in support 
of its mission and program activities and as a means of fostering 
Indian employment and economic development.
    (b) The IHS HCA is responsible for ensuring that all IHS 
acquisitions under the Buy Indian Act comply with the requirements of 
this part.


326.603-3   Deviations.

    (a) There are certain instances where the application of the Buy 
Indian Act to an acquisition may not be appropriate. In these 
instances, the CO must detail the reasons in writing or via email and 
make a deviation determination.
    (b) Some acquisitions by their very nature would make such a 
written determination unnecessary. For example, any order or call 
placed against an indefinite delivery vehicle that already has an 
approved deviation from the requirements of the Buy Indian Act.
    (c) Deviation determinations shall be required for all other 
acquisitions where the Buy Indian Act is applicable and must be 
approved as follows:

[[Page 2075]]



                        Table 1 to Paragraph (c)
------------------------------------------------------------------------
                                            The following official may
     For a proposed contract action           authorize a deviation
------------------------------------------------------------------------
Exceeding the micro-purchase threshold   Contracting Officer.
 and up to $25,000.
Exceeding $25,000 but not exceeding      Chief Contracting Officer (CCO)
 $700,000.                                (or the IHS Division of
                                          Acquisition Policy (DAP)
                                          Director, absent a CCO).
Exceeding $700,000 but not exceeding     IHS Competition Advocate.
 $13.5 million.
Exceeding $13.5 million but not          Head of Contracting Activity.
 exceeding $68 million.
Exceeding $68 million..................  HHS Office of Small &
                                          Disadvantaged Business
                                          Utilization (OSDBU), Office of
                                          the General Counsel (OGC), HHS
                                          Department Competition
                                          Advocate and the HHS Senior
                                          Procurement Executive.
------------------------------------------------------------------------

    (d) Deviations may be authorized prior to issuing the solicitation 
when the CO makes the following determinations and takes the following 
actions:
    (1) The CO determines after market research that there is no 
reasonable expectation of obtaining offers that will be competitive in 
terms of market price, quality and delivery from two or more 
responsible ISBEEs or IEEs.
    (2) The deviation determination is authorized by the official 
listed at HHSAR 326.603-3(c) for the applicable contract action.
    (e) If a deviation determination has been approved, the CO must 
follow the FAR and HHSAR unless specified otherwise.
    (f) Acquisitions made under an authorized deviation from the 
requirements of the Buy Indian Act must be made in conformance with the 
order of precedence required by FAR Part 8.002.


326.604  Procedures.


326.604-1   General.

    All acquisitions under the authority of the Buy Indian Act, must 
conform to all applicable requirements of the FAR and HHSAR.


326.604-2   Procedures for Acquisitions under the Buy Indian Act.

    (a) Each acquisition of supplies, services and construction that is 
subject to commercial items or simplified acquisition procedures in 
accordance with FAR Parts 12 or 13 must be set-aside exclusively for 
ISBEEs, except as otherwise set forth in this Part. IHS will use ISBEE 
commercial item(s) or simplified acquisition set-asides to accomplish 
this preference action.
    (b) Commercial items or simplified acquisitions under this section 
must conform to the competition and price reasonableness documentation 
requirements of FAR 12.209 for commercial item acquisitions and FAR 
13.106 for simplified acquisitions.
    (c) When acquiring construction and A&E services, solicit proposals 
and evaluate potential contractors in accordance with FAR Part 36.
    (d) This paragraph applies to solicitations that are not restricted 
to participation of IEEs.
    (1) If an interested IEE is identified after a solicitation has 
been issued, but before the date established for receipt of offers, the 
contracting office must provide a copy of the solicitation to this 
enterprise. In this case, the CO:
    (i) Will not give preference under the Buy Indian Act to the IEE; 
and
    (ii) May extend the date for receipt of offers when practical.
    (2) If more than one IEE is identified after issuing a 
solicitation, but prior to the date established for receipt of offers, 
the CO may cancel the solicitation and re-compete it as an IEE set-
aside.
    (e) The contracting officer shall insert the provision at HHSAR 
352.226-4, NOTICE OF INDIAN SMALL BUSINESS ECONOMIC ENTERPRISE SET-
ASIDE, in solicitations for acquisitions that are set-aside to ISBEE 
concerns under HHSAR 326.603-1(c).
    (1) The contracting officer shall insert the provision at HHSAR 
352.226-5, NOTICE OF INDIAN ECONOMIC ENTERPRISE SET-ASIDE, in 
solicitations for acquisitions that are set-aside to IEE concerns in 
accordance with HHSAR 326.603-1(d).
    (2) The contracting officer shall insert the clause at HHSAR 
352.226-6, SUBCONTRACTING LIMITATIONS, in all solicitations and 
contracts when the contract award is to be made under the authority of 
the Buy Indian Act.
    (3) The contracting officer shall insert the provision at HHSAR 
352.226-7, INDIAN ECONOMIC ENTERPRISE REPRESENTATION, in all 
solicitations when the contract award is to be made under the authority 
of the Buy Indian Act.


326.604-3   Debarment and suspension.

    A misrepresentation by an offeror of its status as an IEE, failure 
to notify the CO of any change in IEE status that would make the 
contractor ineligible as an IEE, or any violation of the regulations in 
this part by an offeror or an awardee may lead to debarment or 
suspension in accordance with FAR 9.406 and 9.407 and HHSAR 309.406 and 
309.407.


326.605  Contract Requirements.


326.605-1   Subcontracting limitations.

    (a) The CO shall insert FAR clause at 52.219-14, Limitations on 
Subcontracting, in solicitations and contracts for supplies, services, 
and construction, if any portion of the requirement is to be set-aside 
for ISBEEs and IEEs.
    (b) The CO must also insert the clause 352.226-6, Indian Economic 
Enterprise Subcontracting Limitations, in all awards to ISBEEs and IEEs 
pursuant this part.


326.605-2   Performance and payment bonds.

    Solicitations requiring performance and payment bonds must conform 
to FAR Part 28 and authorize use of any of the types of security 
acceptable in accordance with FAR Subpart 28.2 or section 11 of Public 
Law 98-449, the Indian Financing Act Amendments of 1984 (25 U.S.C. 
47a). In accordance with FAR 28.102 and 25 U.S.C. 47a, the CO may 
accept alternative forms of security in lieu of performance and payment 
bonds if a determination is made that such forms of security provide 
the Government with adequate security for performance and payment.


326.606  Representation by an Indian Economic Enterprise Offeror.


326.606-1   General.

    (a) The CO must insert the provision at HHSAR 352.226-7, INDIAN 
ECONOMIC ENTERPRISE REPRESENTATION, in all solicitations regardless of 
dollar value solicited under HHSAR 326.603-1(c) or (d) and in 
accordance with this part.
    (b) To be considered for an award under HHSAR 326.603-1(c) or (d), 
an offeror must:
    (1) Certify that it meets the definition of ``Indian Economic 
Enterprise'' in response to a specific solicitation set-aside in 
accordance with the Buy Indian Act and this part; and

[[Page 2076]]

    (2) Identify the Indian Tribe(s) upon which the offeror relies for 
its IEE status.
    (c) The enterprise must meet the definition of ``Indian Economic 
Enterprise'' throughout the following time periods:
    (1) At the time an offer is made in response to a solicitation;
    (2) At the time of contract award; and
    (3) During the full term of the contract.
    (d) If, after award, a contractor no longer meets the eligibility 
requirements as it has certified and as set forth in this section, then 
the contractor must provide the CO with written notification within 3 
calendar days of its failure to comply with the eligibility 
requirements. The notification must include:
    (1) Full disclosure of circumstances causing the contractor to lose 
eligibility status; and
    (2) A description of actions, if any, that must be taken to regain 
eligibility.
    (e) Failure to maintain eligibility under the Buy Indian Act or to 
provide written notification required by paragraph (d) of this section 
means that:
    (1) The contractor may be declared ineligible for future contract 
awards under this part;
    (2) The CO may consider termination for default of the ongoing 
contract; and
    (3) The CO may pursue debarment or suspension of the contractor.
    (f) The CO will review the offeror's representation that it is an 
IEE in a specific bid or proposal and verify that the Indian Tribe(s) 
that the offeror identified in the representation is either on the List 
of Federally Recognized Tribes or is an Alaska Native Corporation. A CO 
will also investigate the representation if an interested party 
challenges the IEE representation or if the CO has any other reason to 
question the representation. The CO may ask the offeror for more 
information to substantiate the representation. Challenges of and 
questions concerning a specific representation must be referred to the 
CO or CCO in accordance with HHSAR 326.607.
    (g) Participation in the Mentor-Prot[eacute]g[eacute] Program 
established under section 831 of the National Defense Authorization Act 
for Fiscal Year 1991 (25 U.S.C. 47 note) does not render an IEE 
ineligible for contracts awarded under the Buy Indian Act.


326.606-2   Representation provision.

    (a) Contracting offices must provide copies of the awardees' IEE 
representation to any interested parties upon written request. IHS will 
make awardees' IEE representations available via IHS public sites and/
or other means.
    (b) Any false or misleading information submitted by an enterprise 
when submitting an offer in consideration for an award set-aside under 
the Buy Indian Act may be a violation of the law punishable under 18 
U.S.C. 1001. False claims submitted as part of contract performance may 
be subject to the penalties enumerated in 31 U.S.C. 3729 to 3731 and 18 
U.S.C. 287.
    (c) The CO shall inform the Head of Contracting Activity, within 10 
business days, of all suspected IEE misrepresentation by an offeror or 
failure to provide written notification of a change in IEE eligibility.


326.606-3   Representation process.

    (a) Only IEEs may participate in acquisitions set-aside in 
accordance with the Buy Indian Act and this part. The procedures in 
this Part are intended to support responsible IEEs and prevent 
circumvention or abuse of the Buy Indian Act.
    (b) The CO shall review the ownership information furnished under 
HHSAR 352.226-7(b) and verify that the Indian Tribe(s) identified is 
either on the List of Federally Recognized Tribes or is an Alaska 
Native Corporation.
    (c) If the CO cannot verify from the offeror submission that the 
Indian Tribe(s) identified is either on the List of Federally 
Recognized Tribes or is an Alaska Native Corporation, the CO must allow 
the offeror to correct information submitted under HHSAR 352.226-7(b). 
The CO should make every effort to allow the offeror to correct the 
information. If the requirement is time sensitive the CO must specify 
to the offeror the time and date by which a response is required.
    (1) If the CO determines the offeror is not responsive, the CO must 
document the circumstances and inform the offeror of the determination.
    (2) The CO may ask the appropriate regional Office of the General 
Counsel to review the IEE representation.
    (3) The IEE representation does not relieve the CO of the 
obligation for determining contractor responsibility, as required by 
FAR Subpart 9.1.


326.607  Challenges to Representation.


326.607-1   Procedure.

    (a) The CO can accept an offeror's written representation of being 
an ISBEE or IEE (as defined in HHSAR 326.601) only when it is submitted 
in response to a Sources Sought Notice, Request for Information (RFI) 
or with an offer in response to a solicitation under the Buy Indian 
Act. Another interested party may challenge the representation of an 
offeror or awardee by filing a written challenge.
    (b) Upon receipt of the challenge, the CO shall re-verify the 
representation of the offeror or awardee in accordance with the 
requirements of this subpart, including the provisions of 326.606.


326.607-2   Receipt of Challenge.

    (a) An interested party must file any challenges against an 
offeror's representation with the cognizant CO.
    (b) The challenge must be in writing and must contain the basis for 
the challenge with accurate, complete, specific and detailed evidence. 
The evidence must support the allegation that the offeror fails to meet 
the definition of Indian Economic Enterprise or Indian Small Business 
Economic Enterprise as defined in HHSAR 326.601 or is otherwise 
ineligible. The CO will dismiss any challenge that is deemed frivolous 
or that does not meet the conditions in this section.
    (c) To be considered timely, a challenge must be received by the CO 
no later than 10 calendar days after the basis of challenge is known or 
should have been known, whichever is earlier.
    (1) A challenge may be made orally if it is confirmed in writing 
within the 10-day period after the basis of challenge is known or 
should have been known, whichever is earlier.
    (2) A written challenge may be delivered by hand, email, or letter 
postmarked within the 10-day period after the basis of challenge is 
known or should have been known, whichever is earlier.
    (3) A CO's challenge to a certification is always considered 
timely, whether filed before or after award.
    (d) Upon receiving a timely challenge, the CO must:
    (1) Notify the challenger of the date it was received, and that the 
representation of the enterprise being challenged is under 
consideration; and
    (2) Furnish to the offeror (whose representation is being 
challenged) a request to provide detailed information on its 
eligibility by certified mail, return receipt requested or email.
    (e) Within 3 calendar days after receiving a copy of the challenge 
and the CO's request for detailed information, the challenged offeror 
must file, as specified at (d)(2), with the CO a complete statement 
answering the allegations in the challenge and furnish evidence to 
support its position on representation. If the offeror does not submit 
the required material within the 3 calendar days, or another period of 
time granted by the CO, the CO may assume that the offeror does not 
intend

[[Page 2077]]

to dispute the challenge and must not award to the challenged offeror.
    (f) Within 10 calendar days after receiving a challenge, the 
challenged offeror's response, and any other pertinent information, the 
CO must determine the representation status of the challenged offeror 
and notify the challenger and the challenged offeror of the decision by 
certified mail, return receipt requested or email, and make known to 
all parties the option to appeal the determination to IHS DAP.
    (g) If the representation accompanying an offer is challenged and 
subsequently upheld by DAP, the written notification of this action 
must state the reason(s).


326.607-3   Award in the Face of Challenge.

    (a) Award of a contract in the face of challenge only may be made 
on the basis of the CO's written determination that the challenged 
offeror's representation is valid.
    (1) This determination is final unless it is appealed to DAP, and 
the CO is notified of the appeal before award.
    (2) If an award was made before the CO received notice of appeal, 
the contract is presumed to be valid.
    (b) After receiving a challenge involving an offeror being 
considered for award, the CO must not award the contract until the CO 
has determined the validity of the representation. Award may be made in 
the face of a timely challenge when the CO determines in writing that 
an award must be made to protect the public interest, is urgently 
required, or a prompt award will otherwise be advantageous to the 
Government.
    (c) If a timely challenge on representation is filed with the CO 
and received before award in response to a specific offer and 
solicitation, the CO must notify eligible offerors within one day that 
the award will be withheld. The CO also may ask eligible offerors to 
extend the period for acceptance of their proposals.
    (d) If a challenge on representation is filed with the CO and 
received after award in response to a specific offer and solicitation, 
the CO need not suspend contract performance or terminate the awarded 
contract unless the CO believes that an award may be invalidated and a 
delay would prejudice the Government's interest. However, if contract 
performance is to be suspended, the CO would follow those guidelines as 
outlined in FAR Part 49.


326.607-4   Challenge Not Timely.

    If a CO receives an untimely filed challenge of a representation, 
the CO must notify the challenger that the challenge cannot be 
considered on the instant acquisition but will be considered in any 
future actions. However, the CO may question at any time, before or 
after award, the representation of an IEE.

PART 352--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
1. The authority citation for part 352 is revised to read as follows:

    Authority:  5 U.S.C. 301, 40 U.S.C. 121(c)(2), 42 U.S.C. 2003.

Subpart 352.2--Text of Provisions and Clauses

0
2. Add Sec. Sec.  352.226-4 through 352.226-7 to read as follows:


352.226-4  Notice of Indian Small Business Economic Enterprise set-
aside.

    As prescribed in HHSAR 326.604-2(b)(1), and in lieu of the 
requirements of 48 CFR 19.508, the Contracting Officer shall insert the 
following provision:

Notice of Indian Small Business Economic Enterprise Set-Aside

    Under the Buy Indian Act, 25 U.S.C. 47, offers are solicited 
only from Indian Economic Enterprises (HHSAR 326.606) that are also 
small business concerns. Any acquisition resulting from this 
solicitation will be from such a concern. As required by HHSAR Sec.  
352.226-7(b), offerors shall include a completed Indian Economic 
Enterprise Representation form in response to Sources Sought 
Notices, Request for Information (RFI) and as part of the proposal 
submission. The Indian Economic Enterprise Representation form, 
available on the IHS DAP public website (www.IHS.gov/DAP), shall be 
included in synopses, presolicitation notices, and solicitations for 
the acquisitions under the Buy Indian Act. Offers received from 
enterprises that are not both Indian Economic Enterprises and small 
business concerns will not be considered and will be rejected.


(End of clause)


352.226-5   Notice of Indian Economic Enterprise set-aside.

    As prescribed in HHSAR 326.604-2(e)(2), the Contracting Officer 
shall insert the following clause:

Notice of Indian Economic Enterprise Set-Aside

    (a) Definitions as used in this clause:
    Alaska Native Claims Settlement Act (ANCSA) means Public Law 92-
203 (December 18, 1971), 85 Stat. 688, codified at 43 U.S.C. 1601-
1629h.
    Indian means a person who is an enrolled member of an Indian 
Tribe or ``Native'' as defined in the Alaska Native Claims 
Settlement Act.
    Indian Economic Enterprise means any business activity owned by 
one or more Indians or Indian Tribes that is established for the 
purpose of profit provided that: The combined Indian or Indian Tribe 
ownership must constitute not less than 51 percent of the 
enterprise; the Indians or Indian Tribes must, together, receive at 
least a majority of the earnings from the contract; and the 
management and daily business operations of an enterprise must be 
controlled by one or more individuals who are Indians. To ensure 
actual control over the enterprise, the individuals must possess 
requisite management or technical capabilities directly related to 
the primary industry in which the enterprise conducts business. The 
enterprise must meet these requirements throughout the following 
time periods:
    (i) At the time an offer is made in response to a written 
solicitation;
    (ii) At the time of the contract award; and
    (iii) During the full term of the contract.
    Indian Tribe means an Indian Tribe, band, nation, or other 
recognized group or community that is recognized as eligible for the 
special programs and services provided by the United States to 
Indians because of their status as Indians, including any Alaska 
Native village or regional or village corporation under the Alaska 
Native Claims Settlement Act (Pub. L. 92-203, 85 Stat. 688; 43 
U.S.C. 1601).
    Representation means the positive statement by an enterprise of 
its eligibility for preferential consideration and participation for 
acquisitions conducted under the Buy Indian Act, 25 U.S.C. 47, in 
accordance with the procedures in Subpart 326.606.
    (b) General. (1) Under the Buy Indian Act, offers are solicited 
only from Indian Economic Enterprises.
    (2) The CO will reject all offers received from ineligible 
enterprises.
    (3) Any award resulting from this solicitation will be made to 
an Indian Economic Enterprise, as defined in paragraph (a) of this 
clause.
    (c) Required submissions. In response to this solicitation, an 
offeror must also provide the following:
    (1) A description of the required percentage of the work/costs 
to be provided by the offeror over the contract term as required by 
section 352.226-6, Subcontracting Limitations clause; and
    (2) Qualifications of the key personnel (if any) that will be 
assigned to the contract.
    (d) Required assurance. The offeror must provide written 
assurance to the CO that the offeror is and will remain in 
compliance with the requirements of this clause. It must do this 
before the CO awards the Buy Indian Act contract and upon successful 
and timely completion of the contract, but before the CO accepts the 
work or product.
    (e) Non-responsiveness. Failure to provide the information 
required by paragraphs (c) and (d) of this clause may cause the CO 
to find an offer non-responsive and reject it.
    (f) Eligibility.
    (1) Participation in the Mentor-Prot[eacute]g[eacute] Program 
established under section 831 of the National Defense Authorization 
Act for Fiscal Year 1991 (25 U.S.C. 47 note) does not render an 
Indian Economic Enterprise ineligible for contracts awarded under 
the Buy Indian Act.
    (2) If a contractor no longer meets the definition of an Indian 
Economic Enterprise

[[Page 2078]]

after award, the contractor must notify the CO immediately and in 
writing. The notification must include full disclosure of 
circumstances causing the contractor to lose eligibility status and 
a description of any actions that the contractor will take to regain 
eligibility. Failure to give the CO immediate written notification 
means that:
    (i) The economic enterprise may be declared ineligible for 
future contract awards under this part; and
    (ii) The CO may consider termination for default if it is in the 
best interest of the government.
    (g) Representation. Under the Buy Indian Act, 25 U.S.C. 47, 
offers are solicited only from Indian Economic Enterprises 
(326.606). As required by HHSAR 352.226-7(b), offerors shall include 
a completed Indian Economic Enterprise Representation form in 
response to Sources Sought Notices, Request for Information (RFI) 
and as part of the proposal submission. The Indian Economic 
Enterprise Representation form, available on the IHS DAP public 
website (www.IHS.gov/DAP), shall be included in synopses, 
presolicitation notices, and solicitations for the acquisitions 
under the Buy Indian Act. Offers received from enterprises that are 
not Indian Economic Enterprises shall not be considered.


(End of clause)


352.226-6   Indian Economic Enterprise Subcontracting Limitations

    As prescribed in HHSAR 326.604-2(e)(3), the Contracting Officer 
shall insert the following clause:

Indian Economic Enterprise Subcontracting Limitations

    (a) Definitions as used in this clause.
    (1) Indian Economic Enterprise means any business activity owned 
by one or more Indians or Indian Tribes that is established for the 
purpose of profit provided that: The combined Indian or Indian Tribe 
ownership must constitute not less than 51 percent of the 
enterprise; the Indians or Indian Tribes must, together, receive at 
least a majority of the earnings from the contract; and the 
management and daily business operations of an enterprise must be 
controlled by one or more individuals who are Indians. To ensure 
actual control over the enterprise, the individuals must possess 
requisite management or technical capabilities directly related to 
the primary industry in which the enterprise conducts business. The 
enterprise must meet these requirements throughout the following 
time periods:
    (i) At the time an offer is made in response to a written 
solicitation;
    (ii) At the time of the contract award; and
    (iii) During the full term of the contract.
    (2) Subcontract means any contract, as defined in FAR subpart 
2.1, entered into by a subcontractor to furnish supplies or services 
for performance of the prime contractor or subcontractor. It 
includes, but is not limited to, purchase orders, and changes and 
modifications to purchase orders.
    (3) Subcontractor means any supplier, distributor, vendor, or 
firm that furnishes supplies or services to or for a prime 
contractor or another subcontractor.
    (b) Required Percentages of work by the concern. The contractor 
must comply with FAR 52.219-14, Limitations on Subcontracting clause 
in allocating what percentage of work to subcontract. The contractor 
shall not subcontract work exceeding the subcontract limitations in 
FAR 52.219-14 to a concern other than a responsible Indian Economic 
Enterprise.
    (c) Any work that an IEE subcontractor does not perform with its 
own employee shall be considered subcontracted work for the purpose 
of calculating percentages of subcontract work in accordance with 
FAR 52.219-14 Limitations on Subcontracting.
    (d) Cooperation. The contractor must:
    (1) Carry out the requirements of this clause to the fullest 
extent; and
    (2) Cooperate in any study or survey that the CO, Indian Health 
Service or its agents may conduct to verify the contractor's 
compliance with this clause.
    (e) Incorporation in Subcontracts. The contractor must 
incorporate the substance of this clause, including this paragraph 
(e), in all subcontracts for general services, A&E services and 
construction awarded under this contract.


(End of clause)


352.226-7   Indian Economic Enterprise representation.

    As prescribed in HHSAR 326.604-2(e)(4), the Contracting Officer 
shall insert the following provision:

Indian Economic Enterprise Representation

    (a) The offeror must represent as part of its offer that it does 
meet the definition of Indian Economic Enterprise (IEE) as defined 
in HHSAR 326.601 and that it intends to meet the definition of an 
IEE throughout the performance of the contract. The offeror must 
notify the contracting officer immediately, via email, if there is 
any ownership change affecting compliance with this representation.
    (b) The representation must be made on the designated IHS Indian 
Economic Enterprise Representation form or any successor forms 
through which the offeror will certify that the ownership 
requirements defined by HHSAR 326.601 are met.
    (c) Any false or misleading information submitted by an 
enterprise when submitting an offer in consideration for an award 
set-aside under the Buy Indian Act is a violation of the law 
punishable under 18 U.S.C. 1001. False claims submitted as part of 
contract performance are subject to the penalties enumerated in 31 
U.S.C. 3729 to 3731 and 18 U.S.C. 287.


(End of provision)

    Dated: December 22, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-28156 Filed 1-12-22; 8:45 am]
BILLING CODE 4160-01-P