PRIVATIZATION A-76

Cost Comparison

Any Number of Positions
Government competes against best value contractor proposal VS. Direct Conversion
10 or fewer appropriated-fund civilian employees
Government does not compete
Requires completion of Market Analysis
Native Americans

Firms with more than 51% Native American ownership are provided preferential procurement rights through the establishment of laws and directives especially for this purpose.

As stated in the FY 1999 DOD Appropriations Acts (Public Law 105-262) and 10 USC 2461 (Sec 8014), the direct conversion of an Air Force commercial activity with 11 or more civilian employees requires that the procurement be awarded to a qualified preferential procurement source contractor certified in the Small Business Administration (SBA) 8(a) business development program.

Furthermore, if the awarded procurement is over $3 million (including option years), the (a) contractor must have tribal status as defined in CFR 124.00. “A commercial activity of any size that is performed by federal employees may be converted to a preferential performance, without cost comparisons….if the contract is awarded to a preferential procurement source at a fair market price. At the agencies discretion, a cost comparison may be conducted.

The Air Force revised its policy in May 1998, in recognition of the viability of this alternative. The revised policy reads, “Regardless of the number of civilians or military positions, a direct conversion may be performed if negotiations indicated the conversion to a tribal 8(a) will be cost effective (i.e., through comparison of current versus contract operating cost).”

DoD BUY INDIAN PROGRAM

The Buy Indian Act

The Indian Incentive Program, which originates from the Buy Indian Act, provides a unique opportunity for prime contractors to receive a 5% bonus payment on work subcontracted to Ahtna subsidiaries.

The Indian Incentive Program provides for the payment of 5% of the amount subcontracted to an Indian organization for Indian-owned economic enterprise, when authorized under the terms of the contract.

DoD contracts with Contractors, regardless of size of the company, that contain the FAR clause 52.226-1, Utilization of the Indian Organization and Indian-Owned Economics Enterprises, are eligible for incentive payments under the FY 1999 Program. These contracts require contractors to use their best efforts to find Indian organizations and Indian-owned economic enterprises the maximum practicable opportunity to participate in subcontracts awarded to the fullest extent consistent with efficient performance of the contract(s).

Contracting officers, subject to the terms and conditions of the contract, shall authorize an incentive payment of 5% of the Indian organizations or Indian-owned economic enterprises.

The FY 1999 Appropriations Act makes $8 Million of the amount appropriated for accounts in Title III available for incentive payment to Prime Contractors.

Eligible Recipients

Prime Contractors (regardless of size) submit for incentive payments to DoD Contracting Officers.

Contractor’s request should contain:

• Cite the use of FAR Clause 52.226-1 in DoD contract number
• Copies of pertinent pages of the subcontract • Copies of contractor’s invoices
• Total payment of subcontract and calculation for 5% rebate
• Subcontractor’s status as an Indian-owned economic enterprise

DoD Contracting Officers

• Review and verify documents received
• Forward request and verification summary for incentive payment to DoD SADBU Office
• Provide point of contact of supporting offices with an address, telephone number, and e-mail address of the person who will receive funding
• Provide e-mail address and telephone number of DoD Contracting Officer
• Number of DoD Contracting Officer

For further information about the Indian Incentive Program, contact the Office of Small and Disadvantaged Business Utilization in Washington, D.C. at: (202) 565-8124

PUBLIC LAW 93-638

Indian Self-Determination Contracting

Section 102 of the Amended Act directs the Secretary, upon the request of any Indian tribe by tribal resolution, to enter into a self-determination contract with a tribal organization to plan, conduct and administer programs or portions thereof, including construction programs. What’s important to understand is that the relationship of “638” contracting is Government-to-Government. Indian Self-Determination contracts are, in general, not procurement contracts.

Once a resolution and self-determination contract is presented, the Secretary has 90 days in which to approve the proposed contract. A disapproval must be made within 60 days and must be based on one or more of the following findings:

The service of function to be contracted is unsatisfactory.
There is inadequate protection of trust resources.
The project or function cannot be completed or maintained as proposed in the contract.
When the Secretary declines to enter into a self-determination contract, the Secretary must:

Provide written reasons for rejection;
Provide technical assistance to overcome the objections;
Provide a hearing on the record with appeal procedures according to the rules to be developed later by the Secretary.
The following Section 103 authorizes the Secretary to contract with or make grants or cooperative agreements to Indian tribes upon request. The authorized purposes for these contracts, grants and cooperative agreements include:

Strengthening or improving tribal government which includes planning, financial management, personnel management, development, construction, maintenance or preservation of facilities.
Planning, training and evaluation activities to improve the capacity of a tribe to contract and manage activities.
Land acquisitions in connection with the activities described above.
This section also includes a mandatory technical assistance requirement.
When a technical assistance request is made, the Secretary must provide the services on a no cost” basis unless there are no Federal appropriations.

The Secretary is required to provide technical assistance to:
Develop any new self-determination contract.
Help a tribe assume responsibility for any complete or partial program authorized by Section 102(a)(1) of the amended Indian Self-Determination Act.
Modify a proposed self-determination contract previously rejected by the Secretary.
Technical assistance grants are also available to tribes who in turn seek assistance from other tribal organizations operating mature “638” contracts.
The next section of importance for our purpose is Section 105 of the Amended Act. Section 105 specifically excludes all self-determination contracts except construction ontracts from the Office of Federal Procurement Policy Act, and the Federal Acquisition Act. Because a construction contract is still regarded as a procurement contract, the Federal Acquisition Regulations apply, in part to these contracts.

To determine the extent of the applicable regulations, the interim internal regulations of BIA must be consulted. Section 271.51(b) of those regulations states that the Commissioner of BIA may waive any Federal contracting laws, executive orders, regulations, rules and other administrative requirements which he determines are not appropriate for the purposes of the contract involved or are inconsistent with the Act (see attached regulations).

Section 271.5(c) of the BIA regulations directs that the contracts will be negotiated on a on-competitive basis without advertising when the contracts are requested by a tribal governing body.

Conclusion

Public Law 93-638 provides a contracting process by which an Indian Tribe or Native Corporation can obtain government contracting opportunities without the necessity of a competitive bid process. The result of the Amended Act is to create a “partnering” relationship between the agency and the Indian Tribe.

The United States Congress, as well as the Courts have given the Act’s provisions broad interpretation. This has enabled the agencies and tribes to identify and engage in creative and innovative methods of expanding Native contracting opportunities.