Capping Contract Support Costs is a Roadblock for Tribes

Last month, the U.S. Chamber’s Native American Enterprise Initiative (NAEI), an initiative that seeks to remove legislative and regulatory roadblocks to economic success in Indian Country, wrote a letter to Health and Human Services Secretary Kathleen Sebelius voicing our strong support of the Tribal position on issue of Contract Support Costs (CSC), which are part of the funding given to Indian tribes to contract with the federal government to operate programs serving their tribal members (and other eligible persons).

In the last year the Administration has made efforts, without tribal consultation, to cap CSC funding.

There is a long history of the full contract support costs not being paid to the tribes and Alaska Native Corporations (ANCs) who have contracted/compacted with the federal government to provide services that the government would otherwise provide. This has resulted in two notable Supreme Court decisions in favor of the tribes (Cherokee Nation of Oklahoma v. Leavitt, 2005, and Salazar v. Ramah Navajo Chapter, 2012). In each case, the Supreme Court held that a contract with the federal government to reimburse the tribe for contract support costs was binding, despite the failure of Congress to appropriate funds for those costs. The U.S. Chamber filed amicus briefs in favor of the Tribes’ position in both cases.

As a result of the ruling, the President’s FY2014 Budget Request included a request for “both the Bureau of Indian Affairs (BIA) and the [Indian Health Service] IHS,” with “a line-item appropriation with a maximum amount of funding available for each Tribal contract or compact.” If federal (under)funding continues at the same level as FY 2013, it is estimated that the combined Indian Health Service and Bureau of Indian Affairs CSC shortfall for FY 2014 may be around $110 million, or 17 percent of the total commitment to Indian Country.

In the last few weeks, the National Tribal Contract Support Cost Coalition (NTCSCC) has sent two letters – signed by more than 80 tribal leaders – to the President asking him to facilitate a quick resolution to the outstanding historic claims over unpaid contract support costs as decided in Salazar v. Ramah Navajo Chapter. Additionally, the NTCSCC letters have requested that the Administration abandon their efforts to cap CSC funding, likening it to an attempt to overrule the Supreme Court’s rulings with provisions that “are intended to eliminate all future contract claims.”

The U.S. Chamber, along with tribal leaders across the country, is strongly urging the Administration to withdraw their flawed proposal and work with tribal governments and the Congressional Committees of jurisdiction to find an equitable solution.