The federal government on September 17 announced a historic agreement worth almost $1 billion that would end 25 years of litigation between the U.S. and tribes over the payment of contract support costs incurred by tribal entities under the terms of the Indian Self-Determination and Education Assistance Act of 1975.
The U.S. Departments of Justice and Interior have filed the proposed settlement in federal district court in New Mexico. If approved, funds could be distributed to tribes within the next several months.
Benjamin C. Mizer, principal deputy assistant attorney general in the Justice Department, said the settlement was a compromise reached after years of complex negotiations following the U.S. Supreme Court’s 2012 decision in Salazar v. Ramah Navajo Chapter.
Mizer described it as a settlement both sides can be proud of. It provides a $940 million lump sum payment to the 645 plaintiffs in the class action lawsuit to settle claims for contract support costs for the years 1994-2013.
Kevin K. Washburn, assistant secretary – Indian Affairs, explained that under ISDEAA, the federal government signs intergovernmental contracts with the tribes that allow them to run Bureau of Indian Affairs programs for the benefit of tribal members, such as law enforcement, forest management, fire suppression, road maintenance, housing and federal education.
The federal government has been contracting with tribes for these services for four decades, but Congress has consistently failed to authorize enough money to cover the full costs of the contracts.
The direct cost of hiring personnel to provide services has been covered, but support costs, which are costs related to running the programs, such as insurance, workmen’s compensation, janitorial services, computer hardware and software—in fact, everything except payments for direct services—have not been fully covered by Congressional appropriations. “If the tribes don’t get the money for these costs, they must take it from the programs or other sources,” said Washburn.
In 1990, a class-action lawsuit was brought to force the federal government to cover those costs. The government maintained that it could pay the tribes whatever amount it wanted to, whenever it wanted to and it could decide what amount it would pay after the tribes had performed the services the contract called for. This was the only context in which federal contracts could be treated in such a cavalier manner, essentially rendering them non-contracts.
And that is what the Supreme Court decided was unacceptable in 2012. Justices Antonin Scalia, Clarence Thomas, Sonia Sotomayor, Elena Kagan and Anthony Kennedy sided with the tribes based just on the fact that ordinary government contracts cannot work that way. The court ruled that the federal government was liable for contract support costs whether or not Congress appropriated enough money to cover them. It was a major victory for the tribes.
This settlement addresses the question of how much tribes will receive to reimburse them for contract support costs they incurred, but were not compensated for, during the two decades from 1994 to 2013.
Mizer explained that the settlement “provides a fair and equitable system for distributing shares of the award to each of the 645 class member tribes and tribal contractors. Generally, each tribal contractor that submits a claim will receive a share based on the amount of contract support costs it has incurred over the last 20 years. There is also a minimum payment for each year that a self-determination contract existed with the tribe in order to insure that no tribe is excluded from the benefit of this agreement.”
Jessica Kershaw, a spokeswoman for the Interior Department, told ICTMN that this settlement applies only to contract support services for BIA programs and does not pertain to Indian Health Service programs. “Those claims are being litigated separately,” Kershaw said.”
Interior Secretary Sally Jewell noted that this settlement is indicative of the “tremendous strides the Obama administration has made in its commitment to Indian country.” She cited the resolution of nearly 100 trust cases for a total of $2.5 billion, the restoration of tribal homelands through land-into-trust actions and the land buy-back program funded by the Cobell settlement, the initiative to put the education of tribal children back into the hands of the tribes, and the new opportunities for higher education created by the Cobell Scholarship Fund.
Washburn said in a statement, “Today’s proposed settlement, together with President Obama’s request for full, mandatory funding of tribal contract support costs in the future, removes one of the significant obstacles to tribal self-determination and self-governance. Tribes can now be confident that the federal government will pay sufficient costs to allow them to be successful in running federal programs.”