Indian Self-Determination and Education Assistance Act Amendments

SUMMARY: The Secretaries of the Department of Interior (DOI) and the

Department of Health and Human Services (DHHS) propose a joint rule to

implement section 107 of the Indian Self-Determination Act, as amended,

including Title I, Public Law 103-413, the Indian Self-Determination

Contract Reform Act of 1994. A joint rule, as required by section

107(a)(2)(A)(ii) of the Act, will permit the Departments to award

contracts and grants to Indian tribes without the unnecessary burden or

confusion associated with having two sets of rules for single program

legislation. In section 107(a)(1) of the Act Congress delegated to the

Departments limited legislative rulemaking authority in certain

specified subject matter areas, and the joint rule addresses only those

specific areas. As required by section 107(d) of the Act, the

Departments have developed this proposed rule with active tribal

participation, using the guidance of the Negotiated Rulemaking Act.

DATES: Comments must be submitted on or before March 25, 1996. We will

send copies of this notice of proposed rulemaking (NPRM) to each tribe.

We especially invite comments from individual tribes, tribal members

and tribal organizations.

ADDRESSES: Written comments to these rules may be sent to Betty J.

Penn, Indian Self-Determination Amendments Regulations Comments, Indian

Health Service, Room 6-34, 5600 Fishers Lane, Parklawn Building,

Rockville, MD 20857. Comments will be made available for public

inspection at this address from 8:30 a.m. to 5:00 p.m., Monday through

Friday beginning approximately 2 weeks after publication. Comments will

also be available for public inspection at the Department of the

Interior, Room 4627, Main Interior Building, 1849 C Street NW,

Washington, DC 20240. These comments will be available at the same time

as in Rockville.

FOR FURTHER INFORMATION CONTACT: James Thomas, Division of Self-

Determination Services, Bureau of Indian Affairs, Department of the

Interior, Room 4627, 1849 C Street N.W., Washington, DC 20240,

Telephone (202) 208-3708 or Merry Elrod, Division of Self-Determination

Services, Office of Tribal Activities, Indian Health Service, Room 6A-

19, 5600 Fishers Lane, Parklawn Building, Rockville, MD 20857,

Telephone (301) 443-6840/1104/1044.

SUPPLEMENTARY INFORMATION: The 1975 Indian Self-Determination and

Education Assistance Act gave tribes the authority to contract with the

Federal government to operate programs serving their tribal members and

other eligible persons. The Act was further amended by the Technical

Assistance Act and other Acts, Public Law 98-250; Public Law 100-202;

Interior Appropriations Act for Fiscal Year 1988, Public Law 100-446;

Indian Self-Determination and Education Assistance Act Amendments of

1988, Public Law 100-472; Indian Reorganization Act Amendments of 1988,

Public Law 100-581; miscellaneous Indian Law Amendments, Public Law

101-301; Public Law 101-512; Indian Self-Determination and Education

Assistance Act Amendments of 1990, Public Law 101-644; Public Law 102-

184; Public Law 103-138; Indian Self-Determination Act Amendments of

1994, Public Law 103-413; and Public Law 103-435. Of these, the most

significant were Public Law 100-472 (the 1988 Amendments) and Public

Law 103-413 (the 1994 Amendments).

The 1988 Amendments substantially revised the Act in order ``to

increase tribal participation in the management of Federal Indian

programs and to help ensure long-term financial stability for tribally-

run programs.'' Senate Report 100-274 at 2. The 1988 Amendments were

also ``intended to remove many of the administrative and practical

barriers that seem to persist under the Indian Self-Determination

Act.'' Id. at 2. In fashioning the amendments, Congress directed that

the two Departments develop implementing regulations over a 10-month

period with the active participation of tribes and tribal

organizations. In this regard, Congress delegated to the Departments

broad legislative rulemaking authority.

Initially the two Departments worked closely with tribes and tribal

organizations to develop new implementing regulations, culminating in a

joint compromise September 1990 draft regulation reflecting substantial

tribal input. Thereafter, however, the two Departments continued work

on the draft regulation without any further tribal input. The revised

proposed regulation was completed under the previous administration,

and the current administration published the proposed regulation (NPRM)

for public comment on January 20, 1994, at 59 FR 3166. In so doing, the

current administration expressed its concern over the absence of tribal

participation in the regulation drafting process in the years following

August 1990, and invited tribes to closely review the NPRM for possible

revisions.

Tribal reaction to the January 1994 proposed regulation was

extremely critical. Tribes, tribal organizations, and national Indian

organizations criticized both the content of the NPRM and its length,

running over 80 pages in the Federal Register. To address tribal

concerns in revising the proposed regulations into final form, the

Departments committed to establish a Federal advisory committee that

would include at least 48 tribal representatives from throughout the

country, and be jointly funded by the two Departments.

In the meantime, Congress renewed its examination into the

regulation drafting process, and the extent to which events since the

1988 amendments, including the lengthy and controversial regulation

development process, justified revisiting the Act anew. This

Congressional review eventually led to the October 1994 amendments.

(Similar efforts by tribal representatives to secure amendments to the

Act in response to the developing regulations had been considered by

Congress in 1990 and 1992.)

The 1994 amendments comprehensively revisit almost every section of

the original Act, including amending the Act to override certain

provisions in the January 1994 NPRM. Most importantly for this new

NPRM, the 1994 amendments also remove Congress' prior delegation to the

Departments of general legislative rulemaking authority. Instead, the

Departments' authority is strictly limited to certain areas, a change

explained in the Senate report that accompanied the final version of

the bill:

Section 105 of the bill addresses the Secretaries' authority to

promulgate interpretative regulations in carrying out the mandates

of the Act. It amends section 107 (a) and (b) of the Act by limiting

the delegated authorization of the Secretaries to

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promulgate regulations. This action is a direct result of the failure

of the Secretaries to respond promptly and appropriately to the

comprehensive amendments developed by this committee six years ago.

* * * * *

Section 105(l) amends Sec. 107(a) by delegating to the Secretary

the authority only to promulgate implementing regulations in certain

limited subject matter areas. By and large these areas correspond to

the areas of concern identified by the Departments in testimony and

in discussions. Beyond the areas specified in subsection (a) * * *

no further delegated authority is conferred.

Sen. Rep. No. 103-374 at 14. For this reason, the new NPRM covers

substantially fewer topics than the January 1994 NPRM. As specified by

Congress, the new NPRM is limited to regulations relating to chapter

171 of title 28 of the United States Code, commonly known as the

``Federal Tort Claims Act;'' the Contract Disputes Act of 1978 (41

U.S.C. 601 et seq.); declination and waiver procedures; appeal

procedures; reassumption procedures; discretionary grant procedures for

grants awarded under section 103 of the Act; property donation

procedures arising under section 105(f) of the Act; internal agency

procedures relating to the implementation of this Act; retrocession and

tribal organization relinquishment procedures; contract proposal

contents; conflicts of interest; construction; programmatic reports and

data requirements; procurement standards; property management

standards; and financial management standards. All but two of these

permitted regulatory topics--discretionary grant procedures and tribal

organization relinquishment procedures--are addressed in this NPRM.

The 1994 amendments also require that, if the Departments elect to

promulgate regulations, the Departments must use the notice and comment

procedures of the Administrative Procedure Act, and must promulgate the

regulations as a single set of regulations in title 25 of the Code of

Federal Regulations. Section 107(a)(2). Finally, the 1994 amendments

require that any regulations must be developed with the direct

participation of tribal representatives using as a guide the Negotiated

Rulemaking Act of 1990. This latter requirement is also explained in

the accompanying Senate Report:

To remain consistent with the original intent of the Act and to

ensure that the input received from the tribes and tribal

organizations in the regulation drafting process is not disregarded

as has previously been the case, section 107 also has been amended

by adding a new subsection (d), requiring the Secretaries to employ

the negotiated rulemaking process.

Sen. Rep. No. 103-374 at 14. As a result of the October 1994

amendments and earlier initiatives previously discussed, the

Departments chartered a negotiated rulemaking committee under the

Federal Advisory Committee Act. The committee's purpose is to develop

regulations that implement amendments to the Act.

The committee has 63 members. Forty-eight of these members

represent Tribes--two tribal members from each BIA area and two from

each IHS area. Nine members are from the Department of the Interior and

six members are from the Department of Health and Human Services.

Additionally, four individuals from the Federal Mediation and

Conciliation Service served as facilitators. The committee is co-

chaired by four tribal representatives and two Federal representatives.

While the committee is much larger than usually chartered under the

Negotiated Rulemaking Act, its larger size was justified due to the

diversity of tribal interests and programs available for contracting

under the Act.

The committee agreed to operate based on consensus decisionmaking.

The Departments committed to publish all consensus decisions as the

proposed rule. The committee further agreed that any committee member

or his/her constituents could comment on this proposed rule.

In order to complete the regulations within the statutory

timeframe, the committee divided the areas subject to regulation among

six working groups. The workgroups made recommendations to the

committee on whether regulations in a particular area were desirable.

If the committee agreed that regulations were desirable, the workgroups

developed options for draft regulations. The workgroups presented their

options to the full committee, where the committee discussed them and

eventually developed the proposed regulations.

The first meeting of the committee was in April of 1995. At that

meeting, the committee established six workgroups, a meeting schedule,

and a protocol for deliberations. Between April and September of 1995,

the committee met five times to discuss draft regulations produced by

the workgroups. Each of these meetings generally lasted three days.

Additionally, the workgroups met several more times between April and

September to develop recommendations for the committee to consider.

The policy of the Departments is, whenever possible, to afford the

public an opportunity to participate in the rulemaking process. All of

the sessions of the committee were announced in the Federal Register

and were open to the public.

The Departments commend the ability of the committee to cooperate

and develop a proposal that addresses the interests of the tribes and

the Federal agencies. This negotiated rulemaking process is a model for

developing successful Federal and tribal partnerships in other

endeavors. The consensus process allowed for true bilateral

negotiations between the Federal government and the tribes in the best

spirit of the government-to-government relationship.

In developing regulatory language, full committee consensus was

reached on the regulations which follow under subparts ``A'' through

``P.'' In addition, at the request of tribal and Federal

representatives, the Secretaries have agreed to propose and publish

additional introductory materials under subpart ``A.'' Where the full

committee could not reach consensus as defined in its protocol, this

preamble includes a brief description of the issue, along with the

Federal and tribal positions when available. The public is invited to

comment on these issues as well as on the proposed regulations.

Where the tribal position is stated it reflects dissatisfaction

with proposed resolution of the issues by the Federal representatives

and preference for alternative language as put forth by the tribes.

Where the Federal position is stated, it represents the official views

of the Departments, as expressed by the designated Federal officials.

The paragraphs below address five areas of disagreement within the

committee. The five areas are: internal agency procedures,

confidentiality, conflicts of interest, and two areas of Secretarial

policy.

Key Areas of Disagreement

Internal Agency Procedures

The tribal representatives of the negotiated rulemaking committee

believe the Act requires that provisions concerning the internal

procedures of the Departments of the Interior and Health and Human

Services must be drafted by the negotiated rulemaking committee and

should be included in the final regulation.

The tribal representatives' goal is to have uniform procedures

among the Federal agencies for the implementation and interpretation of

the Act and these regulations. Further, tribal representatives believe

that, unless the internal agency procedures subpart is

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included in these regulations, the Federal agencies may use internal

agency procedures to limit the effect of the 1994 amendments of the

Act.

Previously, in the House and Senate Reports that accompanied the

final version of the 1994 bill each committee observed:

The recently promulgated proposed regulations severely undercut

Congress' intent in the original Act and those amendments to

liberalize the contracting process and to put these programs firmly

in the hands of the tribes. The proposed January 1994 regulations

erect a myriad of new barriers and restrictions upon contractors

rather than simplifying the contracting process and freeing tribes

from the yoke of excess Federal oversight and control.

Sen. Rep. No. 103-374 at 14; Cong. Rec. at H-11145 (daily ed. Oct.

6, 1994). Tribal representatives believe that internal agency

procedures may be used in this same way again if allowed to be created

outside the negotiated rulemaking process.

For purposes of soliciting comments the tribal representatives

recommend the following regulation provision to address the issue of

internal agency procedures:

Internal Agency Procedures

A. No internal agency procedure, policy, or other issuance which

interprets the meaning or application of any provision of the Act or

these regulations shall be binding upon an Indian tribe or tribal

organization. Any such issuance shall instead:

(1) Fall within the specific area of delegated rulemaking

authority specified in section 107(a) of the Act; and

(2) Be promulgated pursuant to the negotiated rulemaking and

notice and comment procedures of the Act.

B. No issuance which fails to meet these criteria shall have any

force or effect, or be binding on any tribe or tribal organization.

C. No internal agency procedure and no Departmental official or

employee shall impose any requirements, limitation, or condition on

any tribe or tribal organization relating to any matter arising

under the Act. All such matters shall be governed exclusively by the

Act and these regulations.

The Federal position is that a comprehensive manual for the

internal management of self-determination contracts should not be

developed through the formal rulemaking process. Internal agency

procedures are more appropriately developed outside the negotiated

rulemaking process, to allow flexibility in addressing practical

considerations which arise in the field, and to allow maximum

participation from those agency officials who bear much of the

responsibility for implementing the Act to its fullest capability. The

Federal position supports a joint tribal and Federal commitment to work

together to generate a procedural manual which will promote the

purposes underlying the Act and facilitate contracting by Indian tribes

and tribal organizations.

One goal of the full committee is to have uniform procedures for

the implementation and interpretation of the act and these regulations

which apply to all Federal agencies which administer contracted

programs. The Federal members of the committee propose that the parties

formally agree to work together to develop a manual which guides all

contracting agencies through the contracting process. This is

consistent with the position taken by the work group charged with

making recommendations regarding internal agency procedures.

To that end, Federal committee members would commit to a firm time

line within which to produce a manual. In addition, the Federal

government would seek meaningful consultation throughout the

development process from representatives of Indian tribes and tribal

organizations.

Conflicts of Interest

The Federal negotiators feel strongly that regulatory provisions

concerning conflicts of interest are needed, especially for the

protection of allottees. The Federal proposal would address two types

of conflicts: Conflicts of the tribe or tribal organization itself (an

``organizational conflict'') and conflicts of individual employees

involved in trust resource management. The Secretary of the Interior

owes a fiduciary duty to trust beneficiaries that cannot be compromised

by contracting to rely on the recommendations and reports of persons

with financial interests adverse to those of the trust beneficiary (the

individual allotted Indian), whether the conflict be that of the tribe

or that of an individual tribal employee.

With respect to organizational conflicts that become known after

contract negotiation, the proposal would require the tribe to disclose

the conflict and negotiate a means of avoiding, mitigating, or

neutralizing the conflict. The conflict would be one between the tribe

and individual Indians, one between the tribe and the United States, or

one between the tribe and others relying on the work to be performed

under the contract. The only conflicts that would be regulated would be

those arising from the tribe/tribal organization's interests associated

with land, resources, trust property, or rights of use, that could

impair the objectivity of the tribe/tribal organization in performing

the contract. The proposal does not address organizational conflicts

known to the Secretary at the time of contract approval. Those can and

should be addressed in negotiation of the contract.

With respect to contracts for trust resource management, the

proposal would require the tribe/tribal organization to adopt and

enforce standards of conduct to prohibit officers, employees or agents

(including subcontractors) from participating in the review of trust

transactions with those nontribal entities in which they have a

financial interest, employment, or competitive relationship. The

standards would also prohibit acceptance of gratuities.

Contract provisions may be negotiated to take the place of the

proposed regulation. The regulation is proposed to ensure that some

provision will be made to avoid or mitigate conflicts, whether by rule

or contract terms. Such provisions will permit the Secretary of the

Interior to contract for work supportive of his trust management

functions, and avoid the potential for breach of trust liability or the

need to decline on grounds that ``adequate protection of trust

resources is not assured.''

The Federal proposal is as follows:

A. What is an organizational conflict? An organizational

conflict exists when your legal, financial, or resource use

interests (arising from land, interests in land or resources, trust

property, or rights of use) conflict with those of the United States

or any person reliant on the work to be performed under the contract

(including an Indian allottee). An organizational conflict only

arises, however, when your interest is such that it may impair your

objectivity in performing work under the contract.

B. What must a tribe or tribal organization do if an

organizational conflict arises under a contract? You must disclose

the conflict to the Secretary and propose a means of avoiding,

mitigating, or neutralizing the conflict, if the conflict had not

been known to the Secretary when the contract was negotiated. You

must proposed a means of avoiding, mitigating, or neutralizing the

conflict (such as review of your work by a third party,) that is

acceptable to the Secretary.

C. What kinds of organizational conflicts must be addressed? You

must address conflicts between the tribe and the United States, such

as when the tribe has a contract for realty services and a

contaminant survey must be undertaken in connection with its request

that the United States take land into trust. A conflict would exist

because it would be in the tribe's interest for the United States to

take the land into trust, despite the presence of contaminants,

because liability for cleanup would be transferred to the United

States as holder of legal title.

You must address conflicts between a tribe and individual trust

beneficiaries. For

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example, a tribe may hold a contract for real estate services,

including appraisals. If the tribe seeks to buy or lease lands from

an allottee, its performance of the appraisal of such allotted lands

would present such a conflict. To fulfill its trust responsibility

to the individual Indian landowner, the United States would expect

the tribe to hire an independent appraiser to perform (or review)

the appraisal.

The tribe may have conflicting interests with other persons who

rely on its performance under the contract. For example, a cadastral

survey may determine the boundaries between tribal lands and those

of individual Indians, State governments, or private landowners. In

that case, the survey should be reviewed by an independent third

party to assure its objectivity.

D. When must the tribe or tribal organization regulate its

employees or subcontractors to avoid a conflict of interest? You

must maintain written standards of conduct to govern officers,

employees, and agents (including subcontractors) engaged in

functions related to the management of trust assets.

E. What must the Standards of Conduct prohibit or mitigate? The

Standards must prohibit an officer, employee, or agent (including a

subcontractor) from participating in the review, analysis, or

inspection of trust transactions with a party in which such persons

have a financial interest or an employment relationship, or those in

direct competition with such a party. It must also prohibit such

officers, employees, or agents from accepting any gratuity, favor,

or anything of more than nominal value, from a party (other than the

tribe) with an interest in the trust transactions under review. Such

standards must also provide for sanctions or remedies of the

violation of the standards.

F. What types of conflicts involving tribal employees or

contractors would have to be regulated by the tribe? The tribe would

need a tribally-adopted mechanism to ensure that no officer or

employee reviews a trust transaction in which that person has a

personal, financial, or employment interest that conflicts with that

of the trust beneficiary, the tribe or allottee. For example, a

tribal employee who works part-time for an oil company should not be

assigned to inspect an oil and gas lease held by that oil company to

assure absolute loyalty to the Indian beneficiary. For similar

reasons, such an employee should not inspect the leases held by the

oil company's competitors.

Similarly, a tribe which intends to subcontract the performance

of trust-related functions should avoid awarding a contract for oil

and gas royalty audits to an accounting firm that also derives

revenue from the oil and gas companies being audited.

G. May a tribe elect to negotiate the contract provisions on

conflict of interest to take the place of this regulation? Yes. A

tribe and the Secretary may agree to contract provisions that

address the conflict of interest issues specific to the program and

activities contracted. Agreed-upon contract provisions shall be

followed, rather than this regulation.

The tribal representatives of the negotiated rulemaking committee

oppose the regulatory provisions presented by the Federal officials in

the area of ``conflict of interest,'' except those contained in

Sec. 900.48(6) (Procurement Management).

Throughout the meetings two other forms of ``conflict of interest''

regulations have been proposed: organizational conflicts of interest

and personal conflicts of interest. The tribal position on each of

these proposals is discussed below.

Organizational Conflicts of Interest

Tribal members are of the view that, while this issue has been

discussed throughout the meetings, a clear and concise federal proposal

has not been set forth.

The tribal representatives believe the effect of the Federal

proposal is to shift Secretarial trust responsibilities to tribes

through regulation without financial support for the undertaking.

Further, for the nearly 20 years that self-determination contracting

has occurred under the Act, no similar regulation has been needed.

Another concern of tribal representatives is that the Interior

Department has no such provisions controlling its own activities and

that examples of similar conflicts frequently occur within Federal

operation of programs.

For these reasons, tribal representatives strongly believe that no

regulation is necessary in this area of so-called organizational

conflicts of interest.

Personal Conflicts of Interest

In this area, the Federal representatives seek to require that

tribes and tribal organizations adopt internal procedures as a

regulatory scheme to address conflicts of interest by their employees,

agents, and officials when conducting transactions related to trust

resources.

Tribal representatives are highly offended by the nature of the

Federal proposal to dictate internal tribal operations through these

regulations. Further, the Federal officials appear to presume that the

procedures curently employed by tribes and tribal organizations are

insufficient.

To the extent some form of regulation is needed in the area of

personal conflicts of interest involving trust resource transactions, a

revised version of Sec. 900.48(b) might be explored and commented upon.

Alternatively, tribal representatives propose that these conflicts of

interest be subject to negotiation of the parties in each contract.

Confidentiality

The Federal position is that a provision relating to the

confidentiality of information obtained by Indian tribes and tribal

organizations relating to trust resources needs to be included in this

subpart, consistent with the Federal government's trust obligation to

individual Indians to keep such information confidential. The following

paragraph is proposed to address this issue:

A contractor shall hold confidential all information obtained

from any person relating to the financial affairs of individual

Indians, lessees, or permittees, and shall not release this

information without the individual's consent or as otherwise

required by law.

Tribal committee members note that tribes have long maintained

their own confidentiality procedures. Tribal committee members believe

the proposed Federal language is offensive, and an unnecessary issue to

be regulated.

Secretarial Policy

The committee has not reached a consensus in two Secretarial policy

areas.

First, the provision regarding Federal program guidelines, manuals,

or policy directives is drawn largely from paragraph 1(b)(11) of the

model contract in section 108(c)of the Act. Tribal committee members

are of the view that the statutory provision is a non-exclusive list of

the types of Federal documents or issuances that may not be imposed

upon tribes, and point to the statement in the Senate and House reports

that other ``unpublished requirements'' may not be imposed upon tribes.

They therefore seek the addition of other similar documents such as

``advisories, notices, letters, correspondence and reporting

requirements.'' Federal representatives oppose adding any other items

to the statutory list.

The Regulation does not include a provision advanced by tribal

committee members that would adopt, as a Secretarial policy, the policy

that Federal laws and regulations will be interpreted in a manner that

will facilitate the inclusion of programs in contracts authorized by

the Act. Tribal committee members view such a policy as within the

Secretary's legal authority and consistent with the strong policy of

the Act promoting tribal contracting activities.

Federal committee members are of the view such a policy may be

contrary to

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law and beyond the Secretary's authority, since the laws being

interpreted may not necessarily be for the benefit of Indians, and

since specific authority for such a provision is included in Titles III

and IV (self-governance) of the Act, but not Title I.

Other areas of disagreement are noted in the summary of regulations

below.

Summary of Regulations

The narrative below is keyed to specific subparts of the proposed

rule.

Subpart A--Policy

This subpart contains key congressional policies contained in the

Act and adds several Secretarial policies that will guide the

Secretaries' implementation of the Act.

Subpart B--Definitions

Subpart B sets forth definitions for key terms used in the balance

of the regulations. Terms unique to one subpart are generally defined

in that subpart, rather than in subpart B.

Subpart C--Contract Proposal Contents

Subpart C contains provisions relating to initial contract proposal

contents. In this area, the committee opted to have minimal

regulations. The proposed regulation governing initial contract

proposal contents essentially consists of a checklist of 13 items that

must be addressed in a proposal. In addition, the proposed regulation

contains a provision relating to the availability of technical

assistance to assist Indian tribes and tribal organizations in

preparing a contract proposal, and a provision relating to the

identification of Federal property that the tribe or tribal

organization intends to use during contract performance.

Subpart D--Review and Approval of Contract Proposals

Although this topic is part of the declination process, it has been

pulled out for separate treatment to facilitate a clearer understanding

of the entire contracting process. In this area, the committee opted to

have minimal regulations. The proposed regulation governing review and

approval of contract proposals details what the Secretary must do upon

receiving a contract proposal, the time frames applicable to

Secretarial review, how the 90-day review period can be extended, and

what happens if a proposal is not declined within the 90-day period.

Subpart E--Declination Procedures

The proposed regulation governing declination procedures implements

Section 102 (a)(2), (a)(4), (b) and (d) of the Act. The proposed

regulation restates the statutory grounds for declining a contract

proposal, clarifies that a proposal cannot be declined based on any

objection that will be overcome through the contract, and details

procedures applicable for partial declinations. The proposed regulation

also informs Indian tribes and tribal organizations of the requirements

applicable to the Secretary when a declination finding is made,

contains provisions for technical assistance to Indian tribes and

tribal organizations to avoid a declination finding, and to overcome

stated declination grounds after a declination finding is made.

The advisory committee did not reach consensus on how to address

contract renewal proposals. Tribal representatives on the advisory

committee proposed to exempt an Indian tribe's or tribal organization's

contract renewal proposal from being subjected to declination if the

renewal proposal is substantially similar to the Indian tribe's or

tribal organization's prior contract. Tribal representatives are of the

view that if the Secretary wishes to take back control of a program,

the Secretary should follow the Act's ``reassumption'' procedures set

forth in section 109 of the Act.

It is the Federal position that section 102(a)(2) of the Act was

amended in 1994 to specifically subject contract renewal proposals to

the declination criteria, and that nowhere in the Act, as amended, is

there a specific declination exemption for contract renewal proposals

that are substantially similar to an expiring contract.

With respect to the declination document disclosure provisions of

Sec. 900.27(c), tribal committee members are of the view the disclosure

obligation should extend to documents that do not support the decision,

in addition to documents that do. Federal committee members oppose such

an expansion and note that, if an appeal is taken, such documents will

eventually be produced in the discovery process.

Nothing in this regulation is intended to change the IHS's current

practice of not reviewing the renewal of a term contract for

declination issues where no material or significant changes to the

scope or funding of a program, service, activity, or function has been

proposed by the tribe or tribal organization.

Subpart F--Standards for Tribal or Tribal Organization Management

Systems

Subpart F contains provisions relating to the following management

standards: (1) Financial Management; (2) Procurement Management and (3)

Property Management. In all of these areas the advisory committee

designed minimal regulations that focus on the minimum standards for

the performance of the three management systems used by Indian tribes

and tribal organizations when carrying out self-determination

contracts.

In drafting subpart F, the committee reviewed OMB Circular A-102

and the Uniform Administrative Requirements for Grants and Cooperative

Agreements to State and Local Governments (the ``common rule'').

Following this review and analysis, the attached regulations were

developed to implement the Act and best meet the needs of Indian tribes

and tribal organizations. Central to the proposed regulation is a

distinction between the standards that are the subject of this

regulatory process, and the management system operations that implement

those standards. The standards contained in this subpart are designed

to be the targets which the Indian tribe's and tribal organization's

management systems should be designed and implemented to meet. The

management systems themselves are to be designed by the Indian tribe or

tribal organization.

Section 900.36 contains general provisions which apply to all

management system standards contained in this subpart. The proposed

regulations include provisions that: (1) Identify the management

systems that are addressed; (2) set forth the requirements imposed; (3)

limit the applicability of OMB circulars; (4) provide that the Indian

tribe or tribal organization has the option to impose these standards

upon sub-contractors; (5) identify the difference between a standard

and a system; and (6) specify when the management standards and

management systems are evaluated.

Section 900.41 contains the minimum standards for financial

management systems. The proposed regulations establish the minimum

requirements for seven elements including: (1) Financial reports; (2)

accounting records; (3) internal control; (4) budget control; (5)

allowable costs; (6) source documentation and (7) cash management.

Section 900.47 contains the minimum standards for procurement

management systems. The proposed regulations establish the minimum

requirements for seven elements: (1) To ensure that vendors and sub-

contractors perform in accordance with the terms of purchase orders or

contracts; (2) to require the Indian tribe or tribal organization to

maintain standards of conduct for employees award contracts to avoid

any

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conflict of interest; (3) to review proposed procurements to avoid

buying unnecessary or duplicative items; (4) to provide full and open

competition, to the extent feasible in the local area, subject to the

Indian preference and tribal preference provisions of the Act; (5) to

ensure that procurement awards are made only to entities that have the

ability to perform consistent with the terms of the award; (6) to

maintain records on significant history of all major procurements; and

(7) to establish that the Indian tribe or tribal organization is solely

responsible for processing and settling all contractual and

administrative issues arising out of a procurement. In addition, the

proposed regulation provides that each Indian tribe or tribal

organization must establish its own small purchase threshold and

definition of ``major procurement transactions''; establish minimum

requirements for sub-contract terms, and include a provision in its

subcontracts that addresses the application of Federal laws,

regulations and Executive Orders to subcontractors.

Section 900.52 contains the minimum requirements for property

management systems. The proposed regulations address the standards for

both Federally-titled property and property titled to an Indian tribe

or tribal organization, with differences based upon who possesses title

to the property. As a general rule the requirements for property where

the Federal agency retains title are higher than requirements for

property where the Indian tribe or tribal organization holds the title.

The proposed regulation addresses elements including: (1) Property

inventories; (2) maintenance of property; (3) differences in inventory

and control requirements for property where the Federal agency retains

tile to the property; and (4) the disposal requirements for Federal

property.

Subpart G--Programmatic Reports and Data Requirements

This brief subpart provides for the negotiation of all reporting

and data requirements between the Indian tribe or tribal organization

and the Secretary. Failure to reach an agreement on specific reporting

and data requirements is subject to the declination process. Although

the Indian Health Service proposes to develop a uniform data set, that

data set will only be used as a guide for negotiation of specific

requirements.

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

Section 105(l) of the Act authorizes the Secretary to lease

tribally-owned or tribally-leased facilities and allows for the

definition of ``other reasonable expenses'' to be determined by

regulation. This subpart provides a non-exclusive list of cost elements

that may be included as allowable costs under a lease between the

Indian tribe or tribal organization and the Secretary. It further

clarifies that except for ``fair market rental,'' the same types of

costs may be recovered as direct or indirect charges under a self-

determination contract.

Subpart I--Property Donation Procedures

This subpart establishes procedures to implement section 105(f) of

the Act. Section 900.85 provides a statement of the purpose of the

subpart and explains that while the Secretary has discretion in the

donation of excess and surplus property, ``maximum'' consideration must

be given to an Indian tribe's or tribal organization's request.

This subpart also contains a provision for the Secretary to elect

to reacquire property under specific conditions. It clarifies that

certain property is eligible for operation and maintenance funding, as

well as for replacement funding on the same basis as if title to the

property were held by the United States.

Section 900.87 provides for the transfer of property used in

connection with a self-determination contract. It provides slightly

different procedures for personal property versus real property

furnished before the effective date of the 1994 amendments and another

procedure for property furnished after the enactment of the 1994

amendments.

Sections 900.91 and 900.92 address section 105(f)(2)(A) of the Act

which provides that a tribal contractor automatically takes title to

property acquired with contract funds unless an election is made not to

do so. It also addresses the process for requesting that real property

be placed ``in trust.''

Section 900.97 addresses BIA and IHS excess property donation while

Sec. 900.103 addresses excess or surplus property from other Agencies.

Subpart J--Construction Contracts

Subpart J addresses the process by which an Indian tribe or tribal

organization may contract for construction activities or portions

thereof. The subpart is intentionally written to inform readers of the

breadth and scope of construction contracting activities conducted by

the Departments, and provides opportunities for Indian tribes or tribal

organizations to choose the degree to which they wish to participate in

those activities. The subpart provides for extensive cooperation and

sharing of information between the Departments and an Indian tribe or

tribal organization throughout the construction process. The subpart

provides for different construction contracting methods, such as award

of contracts through subpart J, award of contracts through section 108

of the Act, and award of grants in lieu of contracts depending on the

degree of Federal involvement and the phase(s) of construction

activities for which the Indian tribe or tribal organization seeks to

contract.

The construction process is described in phases, starting with a

preplanning phase, followed by a planning phase, a design phase, and a

construction phase. Provisions are included so an Indian tribe or

tribal organization can seek a contract through section 108 of the Act

for the planning phase and for construction management services. It is

not required that these functions be pursued through a section 108

contract, and if the Indian tribe or tribal organization so elects

these activities can be part of a subpart J contract.

Definitions are provided that are specific to this subpart. The

provisions contained in the subpart regarding construction management

services provide an important participative process in construction

activities for Indian tribes or tribal organizations that seek a voice

in securing projects but do not wish to take upon themselves full

responsibility for the entire construction process.

The subpart establishes new procedures to facilitate tribal

contracting, through such measures as tribal notification, a tribal

right of first refusal, and other provisions.

The subpart promotes the exploration of alternative contracting

methods, and eliminates the applicability of the Federal acquisition

regulations except as may be mutually agreed to by the parties.

The subpart describes the process for negotiating a construction

contract, including the process for arriving at a fair and reasonable

price, and details the process for resolving disagreements in the

contracting process. The subpart also sets forth minimum requirements

for contract proposals, and details the respective roles of tribes and

the Secretary.

The subpart promotes tribal flexibility in several areas, including

through periodic payments at least than quarterly, and the payment of

contingency funds to be administered by the tribal contractor.

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Subpart K--Waiver Procedures

The proposed regulation governing waiver procedures implements

section 107(e) of the Act, which authorizes the Secretary to make

exceptions in the regulations promulgated to implement the Act or to

waive such regulations under certain circumstances. In addition section

107(e) of the Act provides that in reviewing waiver requests, the

Secretary shall follow the time line, findings, assistance, hearing,

and appeal procedures set forth in section 102 of the Act. The proposed

regulation explains how an Indian tribe or tribal organization applies

for a waiver, how the waiver request is processed, the applicable

timeframes for approval or declination of waiver requests, and whether

technical assistance is available. In addition, the proposed regulation

restates the declination criteria of section 102 of the Act, which

apply to waiver requests, and specifies that a denial of a waiver

request is appealable under subpart L of these proposed regulations.

Finally, the proposed regulation implements section 107(b) of the Act

by providing a process for a determination by the Secretary that a law

or regulation has been superseded by the provisions of the Indian Self-

Determination Act, as amended.

Subpart L--Appeals (Other Than Emergency Reassumption and Suspension,

Withholding or Delay in Payment)

The advisory committee decided to develop substantive regulations

governing appeals of pre-award decisions by Federal officials. The

proposed regulation does not govern appeals of post-award decisions

subject to the Contract Disputes Act, since the provisions governing

disputes under a contract can be found in subpart N of these proposed

regulations. The proposed regulation governing pre-award appeals

implements sections 102(b), 102(e), and 109 of the Act, as well as

various other provisions requiring the Secretary to provide an

administrative appeals process when making certain decisions under the

Act. It provides a roadmap to the appeals process for Indian tribes and

tribal organizations.

The proposed regulation is divided in two parts: Part I concerns

appeals from decisions relating to declination of a proposal, an

amendment of a proposal, or a program redesign; non-emergency

reassumption decisions; decisions to refuse to waive regulations under

section 107(e) of the Act; disagreements over reporting requirements;

decisions relating to mature status conversions; and a catchall

provision relating to any other pre-award decisions except Freedom of

Information Act appeals, and decisions relating to the award of

discretionary grants under section 103 of the Act. Part II concerns

decisions relating to emergency reassumptions under section 109 of the

Act and decisions relating to suspension, withholding, or delay of

payments under section 106(l) of the Act.

The proposed regulation allows for an informal conference to avoid

more time-consuming and costly formal hearings, but delineates the

appeal process available to Indian tribes and tribal organizations that

are either unhappy with the results of the informal conference or who

choose to bypass the informal process altogether. The proposed

regulation also states that an Indian tribe or tribal organization may

go directly to Federal district court rather than exhaust the

administrative appeal process under this proposed regulation.

Under the proposed regulation, all appeals must be filed with the

Interior Board of Indian Appeals. Hearings on the record are conducted

by an Administrative Law Judge of the Department of the Interior's

Office of Hearings and Appeals, Hearings Division, who renders a

recommended decision. Objections to this recommended decision may be

filed either with the Interior Board of Indian Appeals, if the case

relates to a Department of the Interior decision, or with the Secretary

of Health and Human Services, if the case relates to the Department of

Health and Human Services.

Part II contains somewhat similar provisions concerning emergency

reassumption and suspension decisions, but these decisions are treated

separately because of the statutory requirement that a hearing on the

record be held within ten days of the Secretary's notice to immediately

rescind and reassume a program, or a notice of intent to suspend,

withhold, or delay payment under a contract.

Subpart M--Federal Tort Claims Act Coverage

Coverage of the Federal Tort Claims Act (FTCA) has been extended to

Indian tribes, tribal organizations and Indian contractors carrying out

contracts, grants, and cooperative agreements under the Act. This

subpart explains which tort claims are covered by the FTCA and which

tort claims are not covered by the FTCA for both medical and non-

medical related claims. It also provides for tribal assistance in

giving notice of tort claims to the Federal agency involved, and in

providing assistance during the administrative claim or litigation

process.

Subpart N--Post-Award Contract Disputes

Under section 110(d) of the Act, the Contract Disputes Act (CDA)

applies to post-award contract claims. This subpart explains when a CDA

claim can be filed; the contents of a claim; and where to file the

claim. It also explains the difference in the handling of claims over

$100,000 and those less than that amount.

Subpart O--Retrocession and Reassumption Procedures

Section 107(a)(1) of the Act authorizes the Secretaries to

promulgate certain regulations governing retrocession and reassumption

procedures. Sections 900.230 through 900.234 define retrocession, what

entities are entitled to retrocede, tribal rights for contracting and

funding as a result of retrocession, and tribal obligations regarding

the return of property to the Secretary after retrocession.

Sections 900.235 through 900.245 explain what is meant by

reassumption, the two types of reassumption authorized under the Act,

necessary circumstances when using emergency and non-emergency

reassumption authority, and Secretarial responsibilities including

detailed written notice requirements when reassumption is invoked. The

subpart describes a number of activities after reassumption has been

completed, such as authorization for ``wind up'' costs, tribal

obligations regarding the return of property to the Secretary, and a

funding reduction protection.

This rule is a significant regulatory action under Executive Order

12866 and requires review by the Office of Management and Budget.

The Departments certify that this rule will not have significant

economic effects on a substantial number of small entities under the

Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

In accordance with Executive Order 12630 the Department of the

Interior and the Department of Health and Human Services have

determined that this regulation does not have significant takings

implications. The proposed rule does not pertain to the taking of

private property interests, nor does it have an effect on private

property.

The Department of the Interior and the Department of Health and

Human Services have determined that this proposed rule does not have

significant Federalism effects under Executive Order 12612 and will not

interfere with

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the roles, rights, and responsibilities of states.

The Departments of the Interior and Health and Human Services have

determined that this rule does not constitute a major Federal action

significantly affecting the quality of the human environment and that

no detailed statement is required under the National Environmental

Policy Act of 1969.

Paperwork Reduction Act of 1995

The information collection requirements contained in this proposed

regulation have been negotiated between the Departments and tribal

representatives through the negotiated rulemaking process. The sections

of the regulations requiring the collection of information have been

agreed to by the parties in the negotiation. The subparts summarized

below contain information collection requirements. As required by the

Paperwork Reduction Act of 1995 (44 U.S.C. 3507 (d)), the Departments

of the Interior and Health and Human Services have submitted a copy of

these sections to the Office of Management and Budget (OMB) for its

review:

Subpart C--Contract Proposal Contents

Subpart C contains provisions relating to initial contract proposal

contents. The proposed regulation governing initial contract proposal

contents essentially consists of a checklist of 13 items that must be

addressed in a proposal. These items include basic information about

the respondent and program to be contracted, such as: name and address;

authorizing resolution; date of submission of proposal; description of

geographical service area; estimated number of Indian people to be

served; brief statement of the program, functions, services or

activities to be performed; description of the proposed program;

financial, procurement, and property management standards; description

of reports to be provided; staff qualifications, if any; budget

information; and waiver information, if requested.

In addition, the proposed regulation contains a provision relating

to the availability of technical assistance for Indian tribes and

tribal organizations in preparing contract proposals and a provision

relating to the identification of Federal property that the tribe or

tribal organization intends to use during contract performance. The

parties that would have to comply with the information collection

requirements in these proposed regulations are tribal governments or

tribal organizations authorized by tribal governments. The Departments

need and will use the information to determine eligibility of the

applicant, evaluate applicant capabilities, protect the service

population and safeguard Federal funds and other resources.

All information is to be collected and reported at the time a tribe

makes initial application to contract a program. Annual reporting and

recordkeeping burden for this collection of information is estimated to

average 34 hours for each response for 50 respondents, including the

time for reviewing instructions, seaching existing data sources,

gathering and maintaining the data needed, and completing and reviewing

the collection of information. Thus, the total annual reporting and

recordkeeping burden for this collection is estimated to be 1,700

hours.

Subpart G--Programmatic Reports and Data Requirements

Subpart G provides for the negotiation of all reporting and data

requirements between the Indian tribe or tribal organization and the

Secretary. The information collected is directly related to the

operation of the program and will be negotiated on a contract by

contract basis. The Departments need and will use the information to

adequately monitor contract operations to determine if satisfactory

services are being provided.

All information is to be collected and reported during the

operation of the contract based on the terms negotiated in the

contract. Annual reporting and recordkeeping burden for this collection

of information is estimated to average 10 hours for each response for

500 respondents, including the time for reviewing instructions,

searching existing data sources, gathering and maintaining the data

needed, and completing and reviewing the collection of information.

Thus, the total annual reporting and recordkeeping burden for this

collection is estimated to be 5,000 hours.

Subpart I--Property Donation Procedures

Subpart I establishes procedures regarding donation of Federal

excess and surplus property to tribes or tribal organizations and

acquisition of property with funds provided under a self-determination

contract. Two areas of this proposed subpart address the procedures to

be followed when tribes or tribal organizations wish to acquire excess

Bureau of Indian Affairs or Indian Health Service property, and excess

or surplus government property from other agencies. The Departments

need and use the information to determine what property the tribes want

to acquire and how the property will be used.

All information is to be collected and reported when a tribe

applies for the identified property. Annual reporting and recordkeeping

burden for this collection of information is estimated to average 8

hours for 100 respondents, including the time for reviewing

instructions, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the

collection of information. Thus, the total annual reporting and

recordkeeping burden for this collection is estimated to be 800 hours.

Subpart J--Construction Contracts

Subpart J addresses the process by which an Indian tribe or tribal

organization may contract for construction activities or portions

thereof. The subpart requires the Indian tribe or tribal organization

to submit descriptions of standards when proposing to contract a

construction project. These standards include use of licensed and

qualified architects and engineers; applicable health and safety

standards; adherence to applicable Federal, state, local or tribal

building codes and engineering standards; structural integrity;

accountability of funds; adequate competition for sub-contracting under

tribal or other applicable law; the commencement, performance and

completion of the contract; adherence to project plans and

specifications (including any applicable Federal construction

guidelines and manuals); the use of proper materials and workmanship;

necessary inspection and testing; and a process for changes,

modifications, stop work and termination of the work when warranted. In

addition to the above, additional information is required when the

tribe or tribal organization is proposing to contract design activities

and construction activities.

The parties that would have to submit information under these

proposed regulations are tribal governments or tribal organizations

authorized by tribal governments. The Departments need and use the

information to determine eligibility of the applicant, evaluate

applicant capabilities, protect the service population and to safeguard

Federal funds and other resources.

All information is to be collected and reported when a tribe makes

initial application to contract a construction activity. Annual

reporting and recordkeeping burden for this collection of information

is estimated to average 80 hours for each response for 30 respondents,

including the time for reviewing instructions, searching

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existing data sources, gathering and maintaining the data needed, and

completing and reviewing the collection of information. Thus, the total

annual reporting and recordkeeping burden for this collection is

estimated to be 2,400.

Organizations and individuals who wish to submit comments on the

information collection requirements should direct them to the Office of

Information and Regulatory Affairs, OMB, Room 10235, New Executive

Office Building, Washington, D.C. 20503; Attention: Interior Desk

Officer.

The Departments consider comments by the public on these proposed

collections of information in:

--Evaluating whether the proposed collections of information are

necessary for the proper performance of the functions of the

Department, including whether the information will have practical

utility;

--Evaluating the accuracy of the Department's estimate of the burden of

the proposed collections of information, including the validity of the

methodology and assumptions used;

--Enhancing the quality, usefulness, and clarity of the information to

be collected; and

--Minimizing the burden or the collection of information on those who

are to respond, including through the use of appropriate automated,

electronic, mechanical, or other forms of information technology, e.g.,

permitting electronic submission of responses.

OMB is required to make a decision concerning the collections of

information contained in these proposed regulations between 30 and 60

days after publication of this document in the Federal Register.

Therefore, a comment to OMB is best assured of having its full effect

if OMB receives it within 30 days of publication. This does not affect

the deadline for the public to comment to the Departments on the

proposed regulations.

This rule was drafted by a negotiated rulemaking committee that

included representatives of the Departments of the Interior and Health

and Human Services and of many tribes and tribal organizations.

List of Subjects in 25 CFR Part 900

Indians; Government contracts; Medical care; Construction;

Government property management; financial management; Leasing; Tort

claims; Appeals.

For the reasons given in the preamble, the Departments of the

Interior and Health and Human Services propose to establish a new

chapter V in title 25 of the Code of Federal Regulations consisting of

part 900 to read as set forth below.

Dated: December 5, 1995.

Bruce Babbitt,

Secretary of the Interior.

Dated: December 5, 1995.

Donna Shalala,

Secretary of Health and Human Services.

CHAPTER V--BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR,

AND INDIAN HEALTH SERVICE, DEPARTMENT OF HEALTH AND HUMAN SERVICES

PART 900--CONTRACTS UNDER THE INDIAN SELF-DETERMINATION AND

EDUCATION ASSISTANCE ACT

Sec.

Subpart A--General Provisions

900.1 Authority.

900.2 Purpose and scope.

900.3 Policy statements.

900.4 Effect on existing tribal rights.

900.5 Effect of these regulations on Federal program guidelines,

manual, or policy directives.

Supart B--Definitions.

900.6 Definitions.

Subpart C--Contract Proposal Contents

900.7 What technical assistance is available to assist in preparing

an initial contract proposal?

900.8 What must an initial contract proposal contain?

900.9 May the Secretary require an Indian tribe or tribal

organization to submit any other information beyond that identified

in Sec. 900.8(b)?

900.10 What should a tribe or tribal organization that is proposing

a contract do about specifying the Federal property that the tribe

or tribal organization may wish to use in carrying out the contract?

900.11 Are the proposal contents requirements the same for renewal

of a contract that is expiring and for securing an annual funding

agreement after the first year of the funding agreement?

Subpart D--Review and Approval of Contract Proposals

900.12 What does this subpart cover?

900.13 What shall the Secretary do upon receiving a proposal?

900.14 How long does the Secretary have to review and approve or

decline a proposal?

900.15 Can the statutory 90-day period be extended?

900.16 What happens if a proposal is not declined within 90 days

after it is received by the Secretary?

Subpart E--Declination Procedures

900.18 What does this subpart cover?

900.19 When can a proposal be declined?

900.20 For what reasons can the Secretary decline a proposal?

900.21 Can the Secretary decline a proposal where the Secretary's

objection could be overcome through the contract?

900.22 Can a contract proposal for an Indian tribe's or tribal

organization's share of administrative programs, functions,

services, and activities be declined for any reason other than the

five reasons specified above?

900.23 What if only a portion of a proposal raises one of the five

declination criteria?

900.24 What happens if the Secretary declines a part of a proposal

on the ground that the proposal proposes in part to plan, conduct,

or administer a program, function, service or activity that is

beyond the scope of programs covered under section 102(a) of the

Act, or proposes a level of funding that is in excess of the

applicable level determined under section 106(a) of the Act?

900.25 If an Indian tribe or tribal organization elects to contract

for a severable portion of a proposal, does the Indian tribe or

tribal organization lose its appeal rights to challenge the portion

of the proposal that was declined?

900.26 Is technical assistance available to an Indian tribe or

tribal organization to avoid declination of a proposal?

900.27 What is the Secretary required to do if the Secretary

decides to decline all or a portion of a proposal?

900.28 When the Secretary declines all or a portion of a proposal,

is the Secretary required to provide an Indian tribe or tribal

organization with technical assistance?

900.29 When the Secretary declines all or a portion of a proposal,

is an Indian tribe or tribal organization entitled to any appeal?

900.30 Can the Secretary decline an Indian tribe or tribal

organization's proposed successor annual funding agreement?

Subpart F--Standards for Tribal or Tribal Organization Management

Systems

General

900.35 What is the purpose of this subpart?

900.36 What requirements are imposed upon Indian tribes or tribal

organizations by this subpart?

900.37 What provisions of Office of Management and Budget (OMB)

circulars or the ``common rule'' apply to self-determination

contracts?

900.38 Do these standards apply to the sub-contractors of an Indian

tribe or tribal organization carrying out a self-determination

contract?

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

900.40 When are Indian tribe or tribal organization management

standards and management systems evaluated?

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Standards for Financial Management Systems

900.41 What are the general financial management system standards

that apply to an Indian tribe or tribal organization carrying out a

self determination contract?

900.42 What are the general financial management system standards

that apply to a tribal organization carrying out a self-

determination contract?

900.43 What minimum general standards apply to all Indian tribe or

tribal organization financial management systems when carrying out a

self-determination contract?

900.44 What specific minimum requirements shall an Indian tribe or

tribal organization financial management system contain to meet

these standards?

900.45 What requirements are imposed upon the Secretary for

financial management by these standards?

Procurement Management System Standards

900.46 When procuring property or services with self-determination

contract funds, can an Indian tribe or tribal organization follow

the same procurement policies and procedures applicable to other

Indian tribe or tribal organization funds?

900.47 What procurement standards shall an Indian tribe or tribal

organization have?

900.48 If the Indian tribe or tribal organization does not propose

different standards, what are the basic standards that the Indian

tribe or tribal organization shall follow?

900.49 What procurement standards apply to subcontracts?

900.50 What Federal laws, regulations, and Executive Orders apply

to sub-contractors?

Property Management System Standards

900.51 What is an Indian tribe or tribal organization's property

management system expected to do?

900.52 What type of property is the property management system

required to track?

900.53 What kind of records shall the property management system

maintain?

900.54 Should the property management system prescribe internal

controls?

900.55 What are the standards for inventories?

900.56 What maintenance is required for property?

900.57 What if the Indian tribe or tribal organization chooses not

to take title to property furnished or acquired under the contract?

900.58 Do the same accountability and control procedures described

above apply to Federal property?

900.59 How are the inventory requirements for Federal property

different than for tribal property?

900.60 How does an Indian tribe or tribal organization dispose of

Federal property?

Subpart G--Programmatic Reports and Data Requirements

900.65 What programmatic reports and data shall the Indian tribe or

tribal organization provide?

900.66 What if the Indian tribe or tribal organization and the

Secretary cannot come to an agreement concerning the type and/or

frequency of program narrative and/or program data report(s)?

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

900.68 Will this uniform data set be required of all Indian tribe

or tribal organizations contracting with the IHS under the Act?

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

900.69 What is the purpose of this subpart?

900.70 What elements are included in the compensation for a lease

entered into between the Secretary and an Indian tribe or tribal

organization for a building owned or leased by the Indian tribe or

tribal organization that is used for administration or delivery of

services under the Act?

900.71 Is a lease with the Secretary the only method available to

recover the types of cost described in Sec. 900.70?

900.72 How may a tribe or tribal organization propose a lease to be

compensated for the use of facilities?

Subpart I--Property Donation Procedures

General

900.85 What is the purpose of this subpart?

900.86 How will the Secretary exercise discretion to acquire and

donate BIA or IHS excess property and excess and surplus Federal

property to an Indian tribe or tribal organization?

Government-Furnished Property

900.87 How does a tribe or tribal organization obtain title to

property furnished by the Federal government for use in the

performance of a contract or grant agreement pursuant to section

105(f)(2)(A) of the Act?

900.88 What should the tribe or tribal organization do if it wants

to obtain title to government-furnished real property that includes

land not already held in trust?

900.89 When may the Secretary elect to reacquire government-

furnished property whose title has been transferred to a tribe or

tribal organization?

900.90 Does government-furnished real property to which a tribe or

tribal organization has taken title continue to be eligible for

facilities operation and maintenance funding from the Secretary?

Contractor-Purchased Property

900.91 Who takes title to property purchased with funds under a

self-determination contract or grant agreement pursuant to Sec. 105

(f)(2)(A)?

900.92 What should the tribe or tribal organization do if it wants

contractor-purchased real property to be taken into trust?

900.93 When may the Secretary elect to acquire title to contractor-

purchased property?

900.94 Is contractor-purchased real property to which a tribe or

tribal organization holds title eligible for facilities operation

and maintenance funding from the Secretary?

BIA and IHS Excess Property

900.95 What is BIA or IHS excess property?

900.96 How can tribes or tribal organizations learn about BIA and

IHS excess property?

900.97 How can a tribe or tribal organization acquire excess BIA or

IHS property?

900.98 Who takes title to excess BIA or IHS property donated to a

tribe or tribal organization?

900.99 Who takes title to any land that is part of excess BIA or

IHS real property donated to a tribe or tribal organization?

900.100 May the Secretary elect to reacquire excess BIA or IHS

property whose title has been transferred to a tribe or tribal

organization?

900.101 Is excess BIA or IHS real property to which a tribe or

tribal organization has taken title eligible for facilities

operation and maintenance funding from the Secretary?

Excess or Surplus Government Property of Other Agencies

900.102 What is excess or surplus government property of other

agencies?

900.103 How can tribes or tribal organizations learn about property

that has been designated as excess or surplus government property?

900.104 How may a tribe or tribal organization receive excess or

surplus government property of other agencies?

900.105 Who takes title to excess or surplus Federal property

donated to a tribe or tribal organization?

900.106 If a contract or grant agreement or portion thereof is

retroceded, reassumed, terminated, or expires, may the Secretary

reacquire title to excess or surplus Federal property of other

agencies that was donated to a tribe or tribal organization?

Property Eligible for Replacement Funding

900.107 Is property that a tribe or tribal organization obtains

title under this subpart eligible for replacement funding?

Subpart J--Construction Contracts

900.110 What does this subpart cover?

900.111 What activities of construction programs are contractible?

900.112 What are construction phases?

900.113 Definitions.

900.114 Why is there a separate subpart in these regulations for

construction contracts and grants?

900.115 How do self-determination construction contracts relate to

ordinary Federal procurement contracts?

900.116 Are fixed price contracts treated the same as cost

reimbursable contracts?

900.117 Do these ``construction contract'' regulations apply to

planning services?

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900.118 Do these ``construction contract'' regulations apply to

construction management services?

900.119 To what extent shall the Secretary consult with affected

Indian tribes before spending funds for any construction project?

900.120 How does an Indian tribe or tribal organization find out

about a construction project?

900.121 Does the Indian tribe or tribal organization have a right

of first refusal?

900.122 What happens during the preplanning phase and can an Indian

tribe or tribal organization perform any of the activities involved

in this process?

900.123 What does an Indian tribe or tribal organization do if it

wants to secure a construction contract?

900.124 What if the Indian tribe or tribal organization and the

Secretary cannot develop a mutually agreeable contract proposal?

900.125 May the Indian tribe or tribal organization elect to use a

grant in lieu of a contract?

900.126 What shall a construction contract proposal contain?

900.127 Shall a construction contract proposal incorporate

provisions of Federal construction guidelines and manuals?

900.128 What can be included in the Indian tribe's or tribal

organization's contract budget?

900.129 What funding shall the Secretary provide in a construction

contract?

900.130 How do the Secretary and Indian tribe or tribal

organization arrive at an overall fair and reasonable price for the

performance of a construction contract?

900.131 What role does the Indian tribe or tribal organization play

during the performance of a self-determination construction

contract?

900.132 What role does the Secretary play during the performance of

a self-determination construction contract?

900.133 Once a contract is awarded, how will the Indian tribe or

tribal organization receive payments?

900.134 Does the declination process or the Contract Disputes Act

apply to construction contract amendments proposed either by an

Indian tribe or tribal organization or the Secretary?

900.135 At the end of a self determination construction contract,

what happens to savings on a cost reimbursement contract?

900.136 Do all provisions of the other subparts apply to contracts

awarded under this subpart?

Subpart K--Waiver Procedures

900.140 Can any provision of these regulations be waived?

900.141 How does an Indian tribe or tribal organization get a

waiver?

900.142 Does an Indian tribe or tribal organization's waiver

request have to be included in an initial contract proposal?

900.143 How is a waiver request processed?

900.144 What happens if the Secretary makes no decision within the

90-day period?

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

900.146 Is technical assistance available?

900.147 What appeal rights are available?

900.148 How can an Indian tribe or tribal organization secure a

determination that a law or regulation has been superseded by the

Indian Self-Determination Act, as specified in section 107(b) of the

Act?

Subpart L--Appeals (Other Than Emergency Reassumption and Suspension,

Withholding or Delay in Payment)

900.150 What decisions can an Indian tribe or tribal organization

appeal under this subpart?

900.151 Are there any appeals this part does not cover?

900.152 How does an Indian tribe or tribal organization know where

and when to file its appeal?

900.153 Does an Indian tribe or tribal organization have any

options besides an appeal?

900.154 How does an Indian tribe or tribal organization request an

informal conference?

900.155 How is an informal conference held?

900.156 What happens after the informal conference?

900.157 Is the recommended decision always final?

900.158 How does an Indian tribe or tribal organization appeal the

initial decision, if it does not request an informal conference or

if it does not agree with the recommended decision resulting from

the informal conference?

900.159 May an Indian tribe or tribal organization get an extension

of time to file a notice of appeal?

900.160 What happens after an Indian tribe or tribal organization

files an appeal?

900.161 How is a hearing arranged?

900.163 What is the Secretary's burden of proof for appeals from

decisions under Sec. 900.150(a) through Sec. 900.150(g)?

900.164 What rights do Indian tribes, tribal organizations, and the

government have during the appeal process?

900.165 What happens after the hearing?

900.166 Is the recommended decision always final?

900.167 If an Indian tribe or tribal organization object to the

recommended decision, what will the Secretary of Health and Human

Services or the IBIA do?

900.168 Will an appeal hurt the Indian tribe or tribal

organization's position in other contract negotiations?

900.169 Will the decisions on appeals be available for the public

to review?

Appeals of Emergency Reassumption of Self-Determination Contracts or

Suspension, Withholding or Delay of Payments Under a Self-

Determination Contract

900.170 What happens in the case of emergency reassumption or

suspension or withholding or delay of payments?

900.171 Will there be a hearing?

900.172 What happens after the hearing?

900.173 Is the recommended decision always final?

900.174 If an Indian tribe or tribal organization object to the

recommended decision, what will the Secretary of Health and Human

Services or the IBIA do?

900.175 Will an appeal hurt an Indian tribe or tribal

organization's position in other contract negotiations?

900.176 Will the decisions on appeals be available for the public

to review?

Subpart M--Federal Tort Claims Act Coverage General Provisions

900.180 What does this subpart cover?

900.181 What definitions apply to this Subpart?

900.182 What other statutes and regulations apply to FTCA coverage?

900.183 Do Indian tribes and tribal organizations need to be aware

of areas which FTCA does not cover?

900.184 Is there a deadline for filing FTCA claims?

900.185 How long does the Federal government have to process an

FTCA claim after the claim is received by the Federal agency, before

a lawsuit may be filed?

900.186 Is it necessary for a self-determination contract to

include any clauses about Federal Tort Claims Act coverage?

900.187 Does FTCA apply to a self-determination contract if FTCA is

not referenced in the contract?

900.188 To what extent shall the contractor cooperate with the

Federal government in connection with tort claims arising out of the

contractor's performance?

900.189 Does this coverage extend to subcontractors of self-

determination contracts?

Medical-Related Claims

900.190 Is FTCA the exclusive remedy for a tort claim for personal

injury or death resulting from the performance of a self-

determination contract?

900.191 Are employees of self-determination contractors providing

health services under the self-determination contract protected by

FTCA?

900.192 What employees are covered by FTCA for medical-related

claims?

900.193 Does FTCA coverage extend to individuals who provide health

care services under a personal services contract providing services

in a facility that is owned, operated, or constructed under the

jurisdiction of the IHS?

900.194 Does FTCA coverage extend to services provided under a

staff privileges agreement with a non-IHS facility where the

agreement requires a health care practitioner to provide reciprocal

services to the general population?

900.195 Does FTCA coverage extend to the contractor's health care

practitioners providing services to private patients on a fee-for-

services basis when such personnel receive the fee, not the self-

determination contractor?

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900.196 Do covered services include the conduct of clinical studies

and investigations and the provision of emergency services,

including the operation of emergency motor vehicles?

900.197 Does FTCA cover employees of the contractor who are paid by

the contractor from funds other than those provided through the

self-determination contract?

900.198 Are Federal employees assigned to a self-determination

contractor under the Intergovernmental Personnel Act or detailed

under Section 214 of the Public Health Service Act covered to the

same extent that they would be if working directly for a Federal

agency?

900.199 Does FTCA coverage extend to a contractor's health care

practitioners to whom staff privileges have been extended in

contractor health care facilities operated under a self-

determination contract on the condition that such practitioner

provide health services to IHS beneficiaries covered by FTCA?

900.200 May persons who are not Indians or Alaska Natives assert

claims under FTCA?

Procedure for Filing Medical-Related Claims

900.201 How should claims arising out of the performance of

medical-related functions be filed?

900.202 What should a self-determination contractor or a

contractor's employee do on receiving such a claim?

900.203 If the contractor or contractor's employee receives a

summons and/or a complaint alleging a tort covered by FTCA, what

should the contractor do?

Non-Medical Related Claims

900.204 Is FTCA the exclusive remedy for a non-medical related tort

claim arising out of the performance of a self-determination

contract?

900.205 To what non-medical-related claims against self-

determination contractors does FTCA apply?

900.206 Does FTCA cover employees of self-determination

contractors?

900.207 How are non-medical related tort claims and lawsuits filed

for IHS?

900.208 How are non-medical related tort claims and lawsuits filed

for DOI?

900.209 What should a self-determination contractor or contractor's

employee do on receiving a non-medical related tort claim?

900.210 If the contractor or contractor's employee receives a

summons and/or complaint alleging a non-medical related tort covered

by FTCA, what should a tribe or tribal organization do?

Subpart N--Post-Award Contract Disputes

900.215 What does this subpart cover?

900.216 What other statutes and regulations apply to contract

disputes?

900.217 Is filing a claim under the CDA our only option for

resolving post-award contract disputes?

900.218 What is a claim under the CDA?

900.219 How does an Indian tribe or tribal organization submit a

claim?

900.220 Does it make a difference whether the claim is large or

small?

900.221 What happens next?

900.222 What goes into a decision?

900.223 When does an Indian tribe or tribal organization get the

Secretary's decision?

900.224 What happens if the decision does not come within that

time?

900.225 Does an Indian tribe or tribal organization get paid

immediately if the awarding official decides in its favor?

900.226 Can the awarding official change the decision after it has

been made?

900.227 Is an Indian tribe or tribal organization entitled to

interest if it wins its claim?

900.228 What role will the awarding official play during an appeal?

900.229 What is the effect of a pending appeal?

Subpart O--Retrocession and Reassumption Procedures

900.230 What does retrocession mean?

900.231 Who may retrocede a contract, in whole or in part?

900.232 What effect will an Indian tribe or tribal organization's

retrocession have on its rights to contract?

900.233 Will an Indian tribe or tribal organization's retrocession

adversely affect funding available for the retroceded program?

900.234 What obligation does the Indian tribe or tribal

organization have with respect to returning property that was used

in the operation of the retroceded program?

900.235 What does reassumption mean?

900.236 Under what circumstances is a reassumption considered an

emergency instead of non-emergency reassumption?

900.237 In a non-emergency reassumption, what is the Secretary

required to do?

900.238 What happens if the contractor fails to take corrective

action to remedy the contract deficiencies identified in the notice?

900.239 What shall the second written notice include?

900.240 What is the earliest date on which the contract will be

rescinded?

900.241 In an emergency reassumption, what is the Secretary

required to do?

900.242 What shall the written notice include?

900.243 May the contractor be reimbursed for actual and reasonable

``wind up costs'' incurred after the effective date of recision?

900.244 What obligation does the Indian tribe or tribal

organization have with respect to returning property that was used

in the operation of the rescinded contract?

900.245 Will a reassumption adversely affect funding available for

the reassumed program?

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

Subpart A--General Provisions

Sec. 900.1 Authority.

These regulations are prepared, issued, and maintained jointly by

the Secretary of Health and Human Services and the Secretary of the

Interior, with the active participation and representation of Indian

tribes, tribal organizations, and individual tribal members pursuant to

the guidance of the Negotiated Rulemaking procedures required by

section 107 of the Indian Self-Determination and Education Assistance

Act.

Sec. 900.2 Purpose and scope.

(a) General. These regulations codify uniform and consistent rules

for contracts by the Department of Health and Human Services (DHHS) and

the Department of the Interior (DOI) in implementing title I of the

Indian Self-Determination and Education Assistance Act, Public Law 93-

638, 25 U.S.C. 450 et seq., as amended and sections 1 through 9

preceding that title.

(b) Programs funded by other Departments and agencies. Included

under this part are programs administered (under current or future law

or interagency agreement) by DHHS and the DOI for the benefit of

Indians for which appropriations are made to other Federal agencies.

(c) This part included in Contracts by Reference. Each contract,

including grants and cooperative agreements in lieu of contracts

awarded under section 9 of the Act, shall include by reference the

provisions of this part, and any amendment thereto, and they are

binding on the Secretary and the contractor except as otherwise

specifically authorized by a waiver under section 107(e) of the Act.

(d) Freedom of Information. Access to records maintained by the

Secretary is governed by the Freedom of Information Act (5 U.S.C. 552)

and other applicable Federal law. Except for previously provided copies

of tribal records that the Secretary demonstrates are clearly required

to be maintained as part of the recording keeping systems of the DHHS

or the DOI, or both, records of the Contractors shall not be considered

Federal records for the purpose of the Freedom of Information Act. The

Freedom of Information Act does not apply to records maintained solely

by Indian tribes and tribal organizations.

(e) Privacy Act. Section 108(b) of the Indian Self-Determination

Act, states that records of the tribal government or tribal

organizations shall not be considered Federal records for the purposes

of the Privacy Act.

(f) Information Collection. The information collection requirements

contained in these rules have been approved by the Office of Management

and Budget and assigned the following approval numbers: [Approval

numbers

[[Page 2050]]

will appear in this location in the final rule.]

Sec. 900.3 Policy statements.

(a) Congressional policy. (1) Congress has recognized the

obligation of the United States to respond to the strong expression of

the Indian people for self-determination by assuring maximum Indian

participation in the direction, planning, conduct and administration of

educational as well as other Federal programs and services to Indian

communities so as to render such programs and services more responsive

to the needs and desires of those communities.

(2) Congress has declared its commitment to the maintenance of the

Federal Government's unique and continuing relationship with, and

responsibility to, individual Indian tribes and to the Indian people as

a whole through the establishment of a meaningful Indian self-

determination policy which will permit an orderly transition from the

Federal domination of programs for, and services to, Indians to

effective and meaningful participation by the Indian people in the

planning, conduct, and administration of those programs and services.

In accordance with this policy, the United States is committed to

supporting and assisting Indian tribes in the development of strong and

stable tribal governments, capable of administering quality programs

and developing the economies of their respective communities.

(3) Congress has declared that a major national goal of the United

States is to provide the quantity and quality of educational services

and opportunities which will permit Indian children to compete and

excel in the life areas of their choice, and to achieve the measure of

self-determination essential to their social and economic well-being.

(4) Congress has declared that the programs, functions, services,

or activities that are contracted under this Act shall include

administrative functions of the Department of the Interior and the

Department of Health and Human Services (whichever is applicable) that

support the delivery of services to Indians, including those

administrative activities supportive of, but not included as part of,

the service delivery programs described in this paragraph that are

otherwise contractible. The administrative functions referred to in the

preceding sentence shall be contractible without regard to the

organizational level within the department that carries out such

functions. Contracting of the administrative functions described herein

shall not be construed to limit or reduce in any way the funding for

any program, function, service, or activity serving any other tribe

under the Act or any other law. The Secretary is not required to reduce

funding for programs, projects, or activities serving a tribe to make

funds available to another tribe or tribal organization under this Act.

(5) Congress has further declared that each provision of the Act

and each provision of contracts entered into thereunder shall be

liberally construed for the benefit of the tribes or tribal

organizations to transfer the funding and the related functions,

services, activities, and programs (or portions thereof), that are

otherwise contractible under the Act, including all related

administrative functions, from the Federal Government to the

Contractor.

(6) Congress has declared that one of the primary goals of the 1994

amendments to the Act was to minimize the reporting requirements

applicable to tribal contractors and to eliminate excessive and

burdensome reporting requirements. Reporting requirements over and

above the annual audit report are to be negotiated with disagreements

subject to the declination procedures of section 102 of the Act.

(7) Congress has declared that there not be any threshold issues

which would avoid the declination, contract review, approval, and

appeal process.

(8) Congress has declared that all self-determination contract

proposals must be supported by the resolution of an Indian tribe(s) as

appropriate.

(9) Congress has declared that to the extent that programs,

functions, services, and activities carried out by tribes and tribal

organizations pursuant to contracts entered into under this Act reduce

the administrative or other responsibilities of the Secretary with

respect to the operation of Indian programs and result in savings that

have not otherwise been included in the amount of contract funds

determined under section 106(a) of the Act, the Secretary shall make

such savings available for the provision of additional services to

program beneficiaries, either directly or through contractors, in a

manner equitable to both direct and contracted programs.

(b) Secretarial policy. (1) It is the policy of the Secretary to

facilitate the efforts of Indian tribes and tribal organizations to

plan, conduct and administer programs, functions, services and

activities, or portions thereof, which the Departments are authorized

to administer for the benefit of Indians because of their status as

Indians and for which funds are appropriated by Congress. The Secretary

shall make best efforts to remove any obstacles which might hinder

Indian tribes and tribal organizations including obstacles that hinder

tribal autonomy and flexibility in the administration of such programs.

(2) It is the policy of the Secretary to encourage Indian tribes

and tribal organizations to become increasingly knowledgeable about the

Departments' programs administered for the benefit of Indians by

providing information on such programs, functions and activities and

the opportunities Indian tribes have regarding them.

(3) It is the policy of the Secretary to provide a uniform and

consistent set of rules for contracts under the Act. The rules

contained herein are designed to facilitate and encourage Indian tribes

to participate in the planning, conduct, and administration of those

Federal programs serving Indian people. The Secretary shall afford

Indian tribes and tribal organizations the flexibility, information,

and discretion necessary to design contractible programs to meet the

needs of their communities consistent with their diverse demographic,

geographic, economic, cultural, health, social, religious and

institutional needs.

(4) The Secretary recognizes that contracting under the Act is an

exercise by Indian tribes of the government-to-government relationship

between the United States and the Indian tribes. When an Indian tribe

contracts, there is a transfer of responsibility and accountability to

the tribal contractor for managing the day-to-day operations of the

contracted Federal programs, functions, services, and activities. The

contracting tribe thereby accepts the responsibility and accountability

to the beneficiaries under the contract with respect to use of the

funds and the satisfactory performance of the programs, functions,

services and activities funded under the contract. The Secretary will

continue to discharge the trust responsibilities to protect and

conserve the trust resources of Indian tribes and the trust resources

of individual Indians.

(5) The Secretary recognizes that tribal decisions to contract or

not to contract are equal expressions of self-determination.

(6) The Secretary shall maintain consultation with tribal

governments and tribal organizations in the Secretary's budget process

relating to programs, functions, services and activities subject to the

Act. In addition, on an annual basis, the Secretary shall consult with,

and solicit the participation of, Indian tribes and tribal

organizations in the development of the budget for the Indian Health

Service and

[[Page 2051]]

the Bureau of Indian Affairs (including participation of Indian tribes

and tribal organizations in formulating annual budget requests that the

Secretary submits to the President for submission to Congress pursuant

to section 1105 of title 31, United States Code).

(7) The Secretary is committed to implementing and fully supporting

the policy of Indian self-determination by recognizing and supporting

the many positive and successful efforts and directions of tribal

governments and extending the applicability of this policy to all

operational components within the Department. By fully extending Indian

self-determination contracting to all operational components within the

Department having programs or portions of programs for the benefit of

Indians because of their status as Indians, it is the Secretary's

intent to support and assist Indian tribes in the development of strong

and stable tribal governments capable of administering quality programs

that meet the tribally determined needs and directions of their

respective communities. It is also the policy of the Secretary to have

all other operational components within the Department work

cooperatively with tribal governments on a government-to-government

basis so as to expedite the transition away from Federal domination of

Indian programs and make the ideals of Indian self-government and self-

determination a reality.

(8) The Secretary's commitment to Indian self-determination

requires that these regulations be liberally construed for the benefit

of Indian tribes and tribal organizations to effectuate the strong

Federal policy of self-determination and, further, that any ambiguities

herein be construed in favor of the tribe or tribal organization so as

to facilitate and enable the transfer of services, programs, functions,

and activities, or portions thereof, authorized by the Act.

(9) It is the Secretary's policy that no later than upon receipt of

a contract proposal under the Act (or written notice of an Indian

tribe's or tribal organization's intention to contract), the Secretary

shall plan to take such administrative actions, including but not

limited to transfers or reductions in force, transfers of property, and

transfers of contractible functions, as may be necessary to insure a

timely transfer of responsibilities to Indian tribes and tribal

organizations.

(10) It is the policy of the Secretary to make available to Indian

tribes and tribal organizations all administrative functions that may

lawfully be contracted under the Act, employing methodologies

consistent with the methodology employed with respect to such functions

under titles III and IV of the Act.

Sec. 900.4 Effect on existing tribal rights.

Nothing in these regulations shall be construed as:

(a) Affecting, modifying, diminishing, or otherwise impairing the

sovereign immunity from suit enjoyed by Indian tribes;

(b) Terminating, waiving, modifying, or reducing the trust

responsibility of the United States to the Indian tribe(s) or

individual Indians. The Secretary shall act in good faith in upholding

such trust responsibility;

(c) Mandating an Indian tribe to apply for a contract(s) or

grant(s) as described in the Act; or

(d) Impeding awards by other Departments and agencies of the United

States to Indian tribes to administer Indian programs under any other

applicable law.

Sec. 900.5 Effect of these regulations on Federal program guidelines,

manual, or policy directives.

Except as specifically provided in the Act, or as specified in

Subpart J, a Contractor is not required to abide by program guidelines,

manuals, or policy directives of the Secretary, unless otherwise agreed

to by the Contractor and the Secretary, or otherwise required by law.

Subpart B--Definitions

Sec. 900.6 Definitions.

Unless otherwise provided in this Part:

Act means Sec. 1 through 9, and Title I of the Indian Self-

Determination and Education Assistance Act of 1975, Public Law 93-638,

as amended.

Annual funding agreement means a document that represents the

negotiated agreement of the Secretary to fund, on an annual basis, the

programs, services, activities and functions transferred to a tribe or

tribal organization under the Act.

Appeal means a request by an Indian tribe or tribal organization

for an administrative review of an adverse Agency decision.

Awarding official means any person who by appointment in accordance

with applicable regulations has the authority to enter into and

administer contracts on behalf of the United States of America and make

determinations and findings with respect thereto.

BIA means the Bureau of Indian Affairs of the Department of the

Interior.

Contract means a self-determination contract as defined in section

4(j) of the Act.

Contract appeals board means the Interior Board of Contract

Appeals.

Contractor means an Indian tribe or tribal organization to which a

contract has been awarded.

Days means calendar days; except where the last day of any time

period specified in these regulations falls on a Saturday, Sunday, or a

Federal holiday, the period shall carry over to the next business day

unless otherwise prohibited by law.

Department(s) means the Department of Health and Human Services

(HHS) or the Department of the Interior (DOI), or both.

IHS means the Indian Health Service of the Department of Health and

Human Services.

Indian means a person who is a member of an Indian Tribe.

Indian tribe means any Indian tribe, band, nation, or other

organized group, or community, including pueblos, rancherias, colonies

and any Alaska Native Village, or regional or village corporation as

defined in or established pursuant to the Alaska Native Claims

Settlement Act, which is recognized as eligible for the special

programs and services provided by the United States to Indians because

of their status as Indians.

Indirect cost rate means the rate(s) arrived at through negotiation

between an Indian tribe or tribal organization and the appropriate

Federal Agency.

Indirect costs means costs incurred for a common or joint purpose

benefiting more that one contract objective or which are not readily

assignable to the contract objectives specifically benefitted without

effort disproportionate to the results achieved.

Real property means any interest in land together with the

improvements structures, and fixtures and appurtenances thereto.

Reassumption means rescission, in whole or in part, of a contract

and assuming or resuming control or operation of the contracted program

by the Secretary without consent of the Indian tribe or tribal

organization.

Retrocession means the voluntary return to the Secretary of a

contracted program, in whole or in part, for any reason, before the

expiration of the term of the contract.

Secretary means the Secretary of Health and Human Services (HHS) or

the Secretary of the Interior (DOI), or both (and their respective

delegates).

Tribal organization means the recognized governing body of any

Indian tribe; any legally established

[[Page 2052]]

organization of Indians which is controlled, sanctioned, or chartered

by such governing body or which is democratically elected by the adult

members of the Indian community to be served by such organization and

which includes the maximum participation of Indians in all phases of

its activities: provided, that, in any case where a contract is let or

a grant made to an organization to perform services benefiting more

than one Indian tribe, the approval of each such Indian tribe shall be

a prerequisite to the letting or making of such contract or grant.

Trust resources means an interest in land, water, minerals, funds,

or other assets or property which is held by the United States in trust

for an Indian tribe or an individual Indian or which is held by an

Indian tribe or Indian subject to a restriction on alienation imposed

by the United States.

Subpart C--Contract Proposal Contents

Sec. 900.7 What technical assistance is available to assist in

preparing an initial contract proposal?

The Secretary shall, upon request of a tribe or tribal organization

and subject to the availability of appropriations, provide technical

assistance on a non-reimbursable basis to such tribe or tribal

organization to develop a new contract proposal or to provide for the

assumption by the tribe or tribal organization of any program, service,

function, or activity (or portion thereof) that is contractible under

the Act.

Sec. 900.8 What must an initial contract proposal contain?

An initial contract proposal must contain the following

information:

(a) the full name, address and telephone number of the Indian tribe

or tribal organization proposing the contract.

(b) If the tribal organization is not an Indian tribe, the proposal

must also include:

(1) a copy of the tribal organization's organizational documents

(e.g., charter, articles of incorporation, bylaws, etc.).

(2) the full name(s) of Indian tribe(s) with which the tribal

organization is affiliated.

(c) the full name(s) of the Indian tribe(s) proposed to be served.

(d) a copy of the authorizing resolution from the Indian tribe(s)

to be served.

(1) If an Indian tribe or tribal organization proposes to serve a

specified geographic area, it must provide authorizing resolution(s)

from all Indian tribes located within the specific area it proposes to

serve. However, no resolution is required from an Indian tribe located

outside the area proposed to be served whose members reside within the

proposed service area.

(2) If a currently effective authorizing resolution covering the

scope of an initial contract proposal has already been provided to the

agency receiving the proposal, a reference to that resolution.

(e) an identification and signature of the authorized

representative of the tribe or tribal organization submitting the

contract proposal.

(f) the date of submission of the proposal.

(g) a brief statement of the programs, functions, services, or

activities that the tribal organization proposes to perform, including:

(1) a description of the geographical service area, if applicable,

to be served.

(2) the estimated number of Indian people who will receive the

benefits or services under the proposed contract.

(3) a description of any local, Area, regional, or national level

departmental programs, functions, services, or activities to be

contracted, including administrative functions.

(4) a description of the proposed program and financial,

procurement, and property management standards.

(5) an identification of the program reports, data and financial

reports that the Indian tribe or tribal organization will provide,

including their frequency.

(6) a description of any proposed redesign of the programs,

services, functions, or activities to be contracted.

(7) minimum staff qualifications, if any.

(h) a budget which includes at a minimum:

(1) an identification of the funds requested under section

106(a)(1) of the Act, including tribal shares, if any, from any

departmental local, Area, regional, or national level, presented as

follows:

(i) for the IHS, by budget subactivity specified in the annual

budget justification, as may be modified by Congressional action (e.g.,

hospitals and clinics, dental health, community health representatives,

mental health, etc.);

(ii) for the BIA, by programs specified in the annual budget

justification, as may be modified by Congressional action (e.g., social

services, forestry, roads, and law enforcement); and

(iii) for non-BIA DOI bureaus and offices, by the lowest level of

detail set out in the annual budget justification for the bureau or

office (as may be modified by Congressional action).

(2) the amount of direct contract support costs, including one-time

or preaward costs under section 106(a)(2) and related provisions of the

Act, presented by major categories such as:

(i) Personnel (differentiating between salary and fringe benefits);

(ii) Equipment;

(iii) Materials and Supplies;

(iv) Travel;

(v) Subcontracts; and

(vi) Other appropriate items of cost.

(3) where the Indian tribe or tribal organization proposes to

recover indirect contract support costs, the budget must include

either:

(i) a copy of the most recent negotiated indirect cost rate

agreement; or

(ii) an estimated amount requested for indirect costs, pending

timely establishment of a rate or negotiation of administrative

overhead costs.

(4) to the extent not stated elsewhere in the budget or previously

reported to the Secretary, any preaward costs, including the amount and

time period covered or to be covered; and

(5) an identification of anticipated sources of other funding

relied upon to carry out the programs, services, functions, or

activities specified in the contract proposal.

(i) the proposed starting date and term of the contract.

(j) in the case of a cooperative agreement, the nature and degree

of Federal programmatic involvement anticipated during the term of the

agreement.

(k) the extent of any planned use of Federal personnel and Federal

resources.

(l) any proposed waiver(s) of these regulations.

Sec. 900.9 May the Secretary require an Indian tribe or tribal

organization to submit any other information beyond that identified in

Sec. 900.8(b)?

No.

Sec. 900.10 What should a tribe or tribal organization that is

proposing a contract do about specifying the Federal property that the

tribe or tribal organization may wish to use in carrying out the

contract?

The Indian tribe or tribal organization is encouraged to provide

the Secretary, as early as possible, with:

(a) a list of the following Federal property intended for use under

the contract:

(1) equipment;

(2) furnishings;

(3) facilities;

(4) and other property.

(b) a statement of how the Indian tribe or tribal organization will

obtain each item by transfer of title under Sec. 105(f)(2) of the Act

and section 1(b)(8) of the model agreement set forth in section 108(c)

of the Act, through a temporary use permit, similar arrangement, or

otherwise; and

[[Page 2053]]

(c) where equipment is to be shared by contracted and non-

contracted programs, services, functions, or activities, a proposal

outlining proposed equipment sharing or other arrangements.

Sec. 900.11 Are the proposal contents requirements the same for

renewal of a contract that is expiring and for securing an annual

funding agreement after the first year of the funding agreement?

No. In these situations, an Indian tribe or tribal organization

should submit a renewal proposal (or notification of intent not to

renew) or an annual funding agreement proposal at least 90 days in

advance of the expiration date of the contract or existing annual

funding agreement. The proposal shall provide budget information in the

same detail and format as the original proposal and may also identify

any significant proposed changes.

Subpart D--Review and Approval of Contract Proposals

Sec. 900.12 What does this subpart cover?

This subpart covers any proposal to enter into a self-determination

contract, to amend an existing self-determination contract, to renew an

existing self-determination contract, or to redesign a program through

a self-determination contract.

Sec. 900.13 What shall the Secretary do upon receiving a proposal?

Upon receipt of a proposal, the Secretary shall:

(a) within five days notify the applicant in writing that the

proposal has been received;

(b) within 15 days notify the applicant in writing of any missing

items required by Sec. 900.8 and that the items be submitted within 15

days of receipt of the notification; and

(c) review the proposal to determine whether there are declination

issues under section 102(a)(2) of the Act.

Sec. 900.14 How long does the Secretary have to review and approve or

decline a proposal?

The Secretary has 90 days after receipt of a proposal to review and

approve or decline the proposal in compliance with section 102 of the

Act and subpart E. At any time during the review period the Secretary

may approve the proposal and award the requested contract.

Sec. 900.15 Can the statutory 90-day period be extended?

Yes, with written consent of the Indian tribe or tribal

organization. If consent is not given, the 90-day deadline applies.

Sec. 900.16 What happens if a proposal is not declined within 90 days

after it is received by the Secretary?

A proposal that is not declined within 90 days (or within any

agreed extension under Sec. 900.15) is deemed approved and the

Secretary shall award the contract or any amendment or renewal within

that 90-day period.

Subpart E--Declination Procedures

Sec. 900.18 What does this subpart cover?

This subpart explains how and under what circumstances the

Secretary may decline a proposal to contract, to amend an existing

contract, to renew an existing contract, to redesign a program, or to

waive any provisions of these regulations. For annual funding

agreements, see Sec. 900.30.

Sec. 900.19 When can a proposal be declined?

As explained in Secs. 900.14 and 900.15, a proposal can only be

declined within 90 days after the Secretary receives the proposal,

unless that period is extended with the voluntary and express written

consent of the Indian tribe or tribal organization.

Sec. 900.20 For what reasons can the Secretary decline a proposal?

The Secretary may only decline to approve a proposal for one of

five specific reasons:

(a) the service to be rendered to the Indian beneficiaries of the

particular program or function to be contracted will not be

satisfactory;

(b) adequate protection of trust resources is not assured;

(c) the proposed project or function to be contracted for cannot be

properly completed or maintained by the proposed contract;

(d) the amount of funds proposed under the contract is in excess of

the applicable funding level for the contract, as determined under

section 106(a) of the Act; or

(e) the program, function, service, or activity (or a portion

thereof) that is the subject of the proposal is beyond the scope of

programs, functions, services, or activities covered under section

102(a)(1) of the Act because the proposal includes activities that

cannot lawfully be carried out by the contractor.

Sec. 900.21 can the Secretary decline a proposal where the Secretary's

objection could be overcome through the contract?

No. The Secretary may not decline to enter into a contract with an

Indian tribe or tribal organization based on any objection that will be

overcome through the contract.

Sec. 900.22 Can a contract proposal for an Indian tribe's or tribal

organization's share of administrative programs, functions, services,

and activities be declined for any reason other than the five reasons

specified above?

No. The Secretary may only decline a proposal based upon one or

more of the five reasons listed above. If a contract affects the

preexisting level of services to any other tribe, the Secretary shall

address that effect in the Secretary's annual report to Congress under

section 106(c)(6) of the Act.

Sec. 900.23 What if only a portion of a proposal raises one of the

five declination criteria?

The Secretary must approve any severable portion of a proposal that

does not support a declination finding described in Sec. 900.20,

subject to any alteration in the scope of the proposal that the

Secretary and the Indian tribe or tribal organization approve.

Sec. 900.24 What happens if the Secretary declines a part of a

proposal on the ground that the proposal proposes in part to plan,

conduct, or administer a program, function, service or activity that is

beyond the scope of programs covered under section 102(a) of the Act,

or proposes a level of funding that is in excess of the applicable

level determined under section 106(a) of the Act?

In those situations the Secretary is required, as appropriate, to

approve the portion of the program, function, service, or activity that

is authorized under section 106(a) of the Act, or approve a level of

funding that is authorized under section 106(a) of the Act. As noted in

Sec. 900.23, the approval is subject to any alteration in the scope of

the proposal that the Secretary and the Indian tribe or tribal

organization approve.

Sec. 900.25 If an Indian tribe or tribal organization elects to

contract for a severable portion of a proposal, does the Indian tribe

or tribal organization lose its appeal rights to challenge the portion

of the proposal that was declined?

No, but the hearing and appeal procedures contained in these

regulations only apply to the portion of the proposal that was

declined.

Sec. 900.26 Is technical assistance available to an Indian tribe or

tribal organization to avoid declination of a proposal?

Yes. In accordance with section 103(d) of the Act, upon receiving a

proposal, the Secretary shall provide any necessary requested technical

assistance to an Indian tribe or tribal organization, and shall share

all relevant information with the Indian tribe or tribal organization,

in order to avoid declination of the proposal.

[[Page 2054]]

Sec. 900.27 What is the Secretary required to do if the Secretary

decides to decline all or a portion of a proposal?

If the Secretary decides to decline all or a severable portion of a

proposal, the Secretary is required:

(a) to advise the Indian tribe or tribal organization in writing of

the Secretary's objections, including a specific finding that clearly

demonstrates that (or that is supported by a controlling legal

authority that) one of the conditions set forth in Sec. 900.20 exists,

together with a detailed explanation of the reason for the decision to

decline the proposal and, when appropriate, any documents relied on in

making the decision; and

(b) to advise the Indian tribe or tribal organization in writing of

the rights described in Sec. 900.29.

(c) to provide tribes and tribal organizations within 20 days of

issuing a declination decision under Sec. 102(a), all documents that

currently exist that support the declination decision. The provision of

these documents does not preclude or limit the Secretary from providing

or producing additional documents to be used in an appeal as evidence

to support any findings identified in the declination decision (subject

to any discovery time limitation or other evidentiary rules imposed by

the Administrative law judge).

Sec. 900.28 When the Secretary declines all or a portion of a

proposal, is the Secretary required to provide an Indian tribe or

tribal organization with technical assistance?

Yes. The Secretary shall provide additional technical assistance to

overcome the stated objections, in accordance with section 102(b) of

the Act, and shall provide any necessary requested technical assistance

to develop any modifications to overcome the Secretary's stated

objections.

Sec. 900.29 When the Secretary declines all or a portion of a

proposal, is an Indian tribe or tribal organization entitled to any

appeal?

Yes. The Indian tribe or tribal organization is entitled to an

appeal on the objections raised by the Secretary, with an agency

hearing on the record, and the right to engage in full discovery

relevant to any issue raised in the matter. The procedures for appeals

are in subpart L of these regulations. Alternatively, at its option the

Indian tribe or tribal organization has the right to sue in Federal

district court to challenge the Secretary's decision.

Sec. 900.30 Can the Secretary decline an Indian tribe or tribal

organization's proposed successor annual funding agreement?

No. If it is substantively the same as the prior annual funding

agreement (except for mandatory funding increases or budget reductions

as provided in section 106(b) of the Act) the Secretary shall approve

and fund, and may not decline, any portion of a successor annual

funding agreement. Any portion of an annual funding agreement proposal

which is not substantively the same as that which was funded previously

(e.g., a redesign proposal; waiver proposal; different proposed funding

amount; or different program, service, function, or activity) is

subject to the declination criteria and procedures in Subpart E. If

there is a disagreement over the availability of appropriations, the

Secretary may decline the proposal in part under the procedure in

subpart E.

Subpart F--Standards for Tribal or Tribal Organization Management

Systems

General

Sec. 900.35 What is the purpose of this subpart?

This subpart contains the minimum standards for the management

systems used by Indian tribes or tribal organizations when carrying out

self-determination contracts. It provides standards for an Indian

tribe's or tribal organization's financial management system,

procurement management system, and property management system.

Sec. 900.36 What requirements are imposed upon Indian tribes or

tribal organizations by this subpart?

When carrying out self-determination contracts, Indian tribes and

tribal organizations shall develop, implement, and maintain systems

that meet these minimum standards, unless one or more of the standards

have been waived, in whole or in part, under section 107(e) of the Act

and subpart K.

Sec. 900.37 What provisions of Office of Management and Budget (OMB)

circulars or the ``common rule'' apply to self-determination contracts?

The only provisions of OMB Circulars and the only provisions of the

``common rule'' that apply to self-determination contracts are the

provisions adopted in these regulations, those expressly required or

modified by the Act, and those negotiated and agreed to in a self-

determination contract.

Sec. 900.38 Do these standards apply to the sub-contractors of an

Indian tribe or tribal organization carrying out a self-determination

contract?

An Indian tribe or tribal organization may require that some or all

of the standards in this subpart be imposed upon its sub-contractors

when carrying out a self-determination contract.

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

(a) Standards are the minimum baseline requirements for the

performance of an activity. Standards establish the ``what'' that an

activity should accomplish.

(b) Systems are the procedural mechanisms and processes for the

day-to-day conduct of an activity. Systems are ``how'' the activity

will be accomplished.

Sec. 900.40 When are Indian tribe or tribal organization management

standards and management systems evaluated?

(a) Management standards are evaluated by the Secretary when the

Indian tribe or tribal organization submits an initial contract

proposal.

(b) Management systems are evaluated by an independent auditor

through the annual single agency audit report that is required by the

Act and OMB Circular A-128.

Standards for Financial Management Systems

Sec. 900.41 What are the general financial management system

standards that apply to an Indian tribe or tribal organization carrying

out a self-determination contract?

An Indian tribe or tribal organization shall expend and account for

contract funds in accordance with all applicable tribal laws,

regulations, and procedures.

Sec. 900.42 What are the general financial management system

standards that apply to a tribal organization carrying out a self-

determination contract?

A tribal organization shall expend and account for contract funds

in accordance with the procedures of the tribal organization.

Sec. 900.43 What minimum general standards apply to all Indian tribe

or tribal organization financial management systems when carrying out a

self-determination contract?

The fiscal control and accounting procedures of an Indian tribe or

tribal organization shall be sufficient to:

(a) permit preparation of reports required by a self-determination

contract and the Act; and

(b) permit the tracing of contract funds to a level of expenditure

adequate to establish that they have not been used in violation of any

restrictions or

[[Page 2055]]

prohibitions contained in any statute that applies to the self-

determination contract.

Sec. 900.44 What specific minimum requirements shall an Indian tribe

or tribal organization financial management system contain to meet

these standards?

An Indian tribe or tribal organization financial management system

shall include provisions for the following seven elements:

(a) Financial reports. The financial management system shall

provide for accurate, current, and complete disclosure of the financial

results of self-determination contract activities, as required in the

financial reporting requirements negotiated and agreed to in the self-

determination contract.

(b) Accounting records. The financial management system shall

maintain records sufficiently detailed to identify the source and

application of self-determination contract funds received by the Indian

tribe or tribal organization. The system shall contain sufficient

information to identify contract awards, obligations and unobligated

balances, assets, liabilities, outlays, or expenditures and income.

(c) Internal controls. The financial management system shall

maintain effective control and accountability for all self-

determination contract funds received and for all Federal real

property, personal property, and other assets furnished for use by the

Indian tribe or tribal organization under the self-determination

contract.

(d) Budget controls. The financial management system shall permit

the comparison of actual expenditures or outlays with the amounts

budgeted by the Indian tribe or tribal organization for each self-

determination contract.

(e) Allowable costs. The financial management system shall be

sufficient to determine the reasonableness, allowability, and

allocability of self-determination contract costs based upon the terms

of the self-determination contract and the tribe's or tribal

organization's applicable OMB cost principles (see OMB Circulars A-87,

A-122, or A-21, available from the Executive Office of the President,

Publications Service, 725--17th Street NW., Washington, DC 20503), as

amended by the Act and these regulations.

(f) Source documentation. The financial management system shall

contain accounting records that are supported by source documentation,

e.g., cancelled checks, paid bills, payroll records, time and

attendance records, contract award documents, purchase orders, and

other primary records that support self-determination contract fund

expenditures.

(g) Cash management. The financial management system shall

establish procedures to ensure the timely receipt of reports from sub-

contractors on their cash balances, expenditures, and disbursements, so

that the Indian tribe or tribal organization may prepare complete and

accurate cash transaction reports as required by the self-determination

contract.

Sec. 900.45 What requirements are imposed upon the Secretary for

financial management by these standards?

In regard to paragraph (g) of Sec. 900.44, the Secretary shall

establish procedures, consistent with Treasury regulations as modified

by the Act, for the transfer of funds from the United States to the

Indian tribe or tribal organization based upon the payment schedule

provided for in the self-determination contract and the annual funding

agreement.

Procurement Management System Standards

Sec. 900.46 When procuring property or services with self-

determination contract funds, can an Indian tribe or tribal

organization follow the same procurement policies and procedures

applicable to other Indian tribe or tribal organization funds?

Yes.

Sec. 900.47 What procurement standards shall an Indian tribe or tribal

organization have?

Indian tribes and tribal organizations shall have standards that

conform with the standards in this subpart. If the Indian tribe or

tribal organization relies upon standards different than those

described below, it shall identify the standards it will use as a

proposed waiver in the initial contract proposal or as a waiver request

to an existing contract.

Sec. 900.48 If the Indian tribe or tribal organization does not

propose different standards, what are the basic standards that the

Indian tribe or tribal organization shall follow?

(a) The Indian tribe or tribal organization shall ensure that its

vendors and/or sub-contractors perform in accordance with the terms,

conditions, and specifications of their contracts or purchase orders.

(b) The Indian tribe or tribal organization shall maintain written

standards of conduct governing the performance of its employees who

award and administer contracts.

(1) No employee, officer, elected official, or agent of the Indian

tribe or tribal organization shall participate in the selection, award,

or administration of a procurement supported by Federal funds if a

conflict of interest, real or apparent, would be involved.

(2) An employee, officer, elected official, or agent of an Indian

tribe or tribal organization, or of a sub-contractor of the Indian

tribe or tribal organization, is not allowed to solicit or accept

gratuities, favors, or anything of monetary value from contractors,

potential contractors, or parties to sub-agreements, with the following

exemptions. The Indian tribe or tribal organization may exempt a

financial interest that is not substantial or a gift that is an

unsolicited item of nominal value.

(3) These standards shall also provide for penalties, sanctions, or

other disciplinary actions for violations of the standards.

(c) The Indian tribe or tribal organization shall review proposed

procurements to avoid buying unnecessary or duplicative items. The

Indian tribe or tribal organization should consider consolidating or

breaking out procurements to obtain more economical purchases. Where

appropriate, the Indian tribe or tribal organization shall compare

leasing and purchasing alternatives to determine which is more

economical.

(d) The Indian tribe or tribal organization shall conduct all major

procurement transactions by providing full and open competition, to the

extent necessary to assure efficient expenditure of contract funds and

to the extent feasible in the local area.

(1) Indian tribes or tribal organizations shall develop their own

definition for ``major procurement transactions.''

(2) As provided for in sections 7 (b) and (c) of the Act, Indian

preference and tribal preferences shall be applied in any procurement

award.

(e) The Indian tribe or tribal organization shall make procurement

awards only to responsible entities who have the ability to perform

successfully under the terms and conditions of the proposed

procurement. In making this judgment, the Indian tribe or tribal

organization will consider such matters as the contractor's integrity,

its compliance with public policy, its record of past performance, and

its financial and technical resources.

(f) The Indian tribe or tribal organization shall maintain records

on the significant history of all major procurement transactions. These

records may include, but are not limited to, the rationale for the

method of procurement, the selection of contract type, the contract

selection or rejection, and the basis for the contract price.

[[Page 2056]]

(g) The Indian tribe or tribal organization is solely responsible,

using good administrative practice and sound business judgment, for

processing and settling all contractual and administrative issues

arising out of a procurement. These issues include, but are not limited

to, source evaluation, protests, disputes, and claims.

(1) The settlement of any protest, dispute, or claim shall not

relieve the Indian tribe or tribal organization of any obligations

under a self-determination contract.

(2) Violations of law shall be referred to the tribal or Federal

authority having proper jurisdiction.

Sec. 900.49 What procurement standards apply to subcontracts?

Each subcontract entered into under the Act shall at a minimum:

(a) be in writing;

(b) identify the interested parties, their authorities, and the

purposes of the contract;

(c) state the work to be performed under the contract;

(d) state the process for making any claim, the payments to be

made, and the terms of the contract, which shall be fixed; and

(e) be subject to sections 7 (b) and (c) of the Act.

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

to sub-contractors?

In addition to the Act, all applicable Federal laws, regulations,

and Executive Orders apply to subcontractors. If an Indian tribe or

tribal organization's contract requires subcontractor compliance with

other Federal laws, regulations, and Executive Orders, then the Indian

tribe or tribal organization should include appropriate provisions in

the subcontracts. The subcontractor is responsible for identifying and

ensuring compliance with applicable Federal laws, regulations, and

Executive Orders not identified in the subcontract.

Property Management System Standards

Sec. 900.51 What is an Indian tribe or tribal organization's property

management system expected to do?

An Indian tribe or tribal organization's property management system

shall account for all property furnished or transferred by the

Secretary for use under a self-determination contract or acquired with

contract funds. The property management system shall contain

requirements for the use, care, maintenance, and disposition of

Federally-owned and other property as follows:

(a) where title vests in the Indian tribe, in accordance with

tribal law and procedures; or

(b) in the case of a tribal organization, according to the internal

property procedures of the tribal organization.

Sec. 900.52 What type of property is the property management system

required to track?

The property management system of the Indian tribe or tribal

organization shall track:

(a) personal property with an acquisition value in excess of $5,000

per item;

(b) sensitive property; and

(c) real property provided by the Secretary for use under the

contract.

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

maintain?

The property management system shall maintain records that

accurately describe the property, including any serial number or other

identification number. These records should contain information such as

the source, titleholder, acquisition date, cost, share of Federal

participation in the cost, location, use and condition of the property,

and the date of disposal and sale price, if any.

Sec. 900.54 Should the property management system prescribe internal

controls?

Yes. Effective internal controls should include procedures:

(a) for the conduct of periodic inventories;

(b) to prevent loss or damage to property; and

(c) to ensure that property is used for an Indian tribe or tribal

organization's self-determination contract(s) until the property is

declared excess to the needs of the contract consistent with the Indian

tribe or tribal organization's property management system.

Sec. 900.55 What are the standards for inventories?

A physical inventory should be conducted at least once every 2

years. The results of the inventory shall be reconciled with the Indian

tribe or tribal organization's internal property and accounting

records.

Sec. 900.56 What maintenance is required for property?

Required maintenance includes the performance of actions necessary

to keep the property in good working condition, the procedures

recommended by equipment manufacturers, and steps necessary to protect

the interests of the contractor and the Secretary in any express

warranties or guarantees covering the property.

Sec. 900.57 What if the Indian tribe or tribal organization chooses

not to take title to property furnished or acquired under the contract?

If the Indian tribe or tribal organization chooses not to take

title to property furnished by the government or acquired with contract

funds, title to the property remains vested in the Secretary. A list of

Federally-owned property to be used under the contract shall be

included in the contract.

Sec. 900.58 Do the same accountability and control procedures

described above apply to Federal property?

Yes, except that requirements for the inventory and disposal of

Federal property are different.

Sec. 900.59 How are the inventory requirements for Federal property

different than for tribal property?

There are three additional requirements:

(a) The Indian or tribal organization shall conduct a physical

inventory of the Federally-owned property and reconcile the results

with the Indian tribe or tribal organization's property records

annually rather than every 2 years;

(b) within 90 days following the end of an annual funding

agreement, the Indian tribe or tribal organization shall certify and

submit to the Secretary an annual inventory of all Federally-owned real

and personal property used in the contracted program; and

(c) the inventory shall report any increase or decrease of $5,000

or more in the value of any item of real property.

Sec. 900.60 How does an Indian tribe or tribal organization dispose of

Federal property?

The Indian tribe or tribal organization shall report to the

Secretary in writing any Federally-owned personal property that is worn

out, lost, stolen, damaged beyond repair, or no longer needed for the

performance of the contract.

(a) The Indian tribe or tribal organization shall state whether the

Indian tribe or tribal organization wants to dispose of or return the

property.

(b) If the Secretary does not respond within 60 days:

(1) the Indian tribe or tribal organization may dispose of the

property as it sees fit and inform the Secretary of the disposal; or

(2) the Indian tribe or tribal organization may return the property

to the Secretary, who shall accept transfer, custody, control, and

responsibility for the property (together with all associated costs).

[[Page 2057]]

Subpart G--Programmatic Reports and Data Requirements

Sec. 900.65 What programmatic reports and data shall the Indian tribe

or tribal organization provide?

Each Indian tribe or tribal organization shall negotiate with the

Secretary the type and frequency of program narrative and program data

report(s) required to meet the needs of the contracting parties. The

extent of available resources will be a consideration in the

negotiations.

Sec. 900.66 What if the Indian tribe or tribal organization and the

Secretary cannot come to an agreement concerning the type and/or

frequency of program narrative and/or program data report(s)?

Any disagreements over reporting requirements are subject to the

declination criteria and procedures in section 102 of the Act and

subpart E.

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

IHS will work with Indian tribe or tribal organization

representatives to develop a mutually defined uniform subset of data

that is consistent with Congressional intent, imposes a minimal

reporting burden, and meets the needs of the contracting parties.

Sec. 900.68 Will this uniform data set be required of all Indian tribe

or tribal organizations contracting with the IHS under the Act?

No. The uniform data set for applicable to the services to be

performed, will serve as the target for the Secretary and the Indian

tribes or tribal organizations during individual negotiations on

program data reporting requirements.

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

Sec. 900.69 What is the purpose of this subpart?

Section 105(l) of the Act requires the Secretary, at the request of

an Indian tribe or tribal organization, to enter into a lease with the

tribe or tribal organization for a building owned or leased by the

tribe or tribal organization that is used for administration or

delivery of services under the Act. The lease is to include

compensation as provided in the statute as well as ``such other

reasonable expenses that the Secretary determines, by regulation, to be

allowable.'' This subpart contains requirements for these leases.

Sec. 900.70 What elements are included in the compensation for a lease

entered into between the Secretary and an Indian tribe or tribal

organization for a building owned or leased by the Indian tribe or

tribal organization that is used for administration or delivery of

services under the Act?

To the extent that no element is duplicative, the following

elements may be included in the lease compensation:

(a) rent (sublease);

(b) depreciation and use allowance based on the useful life of the

facility based on acquisition costs not financed with Federal funds;

(c) contributions to a reserve for replacement of facilities;

(d) principal and interest paid or accrued;

(e) operation and maintenance expenses, to the extent not otherwise

included in rent or use allowances, including, but not limited to, the

following:

(1) water, sewage;

(2) utilities;

(3) fuel;

(4) insurance;

(5) building management supervision and custodial services;

(6) custodial and maintenance supplies;

(7) pest control;

(8) site maintenance (including snow and mud removal);

(9) trash and waste removal and disposal;

(10) fire protection/fire fighting services and equipment;

(11) monitoring and preventive maintenance of building structures

and systems, including but not limited to:

(i) heating/ventilation/air conditioning;

(ii) plumbing;

(iii) electrical;

(iv) elevators;

(v) boilers;

(vi) fire safety system;

(vii) security system; and

(viii) roof, foundation, walls, floors.

(12) unscheduled maintenance;

(13) scheduled maintenance (including replacement of floor

coverings, lighting fixtures, repainting);

(14) security services;

(15) management fees; and

(16) other reasonable and necessary operation or maintenance costs

justified by the contractor;

(f) repairs to buildings and equipment;

(g) alterations needed to meet contract requirements;

(h) other reasonable expenses; and

(i) the fair market rental for buildings or portions of buildings

and land, exclusive of the Federal share of building construction or

acquisition costs, or the fair market rental for buildings constructed

with Federal funds exclusive of fee or profit, and for land.

Sec. 900.71 Is a lease with the Secretary the only method available to

recover the types of cost described in Sec. 900.70?

No. With the exception of paragraph (h) in Sec. 900.70 the same

types of costs may be recovered in whole or in part under section

106(a) of the Act as direct or indirect charges to a self-determination

contract.

Sec. 900.72 How may a tribe or tribal organization propose a lease to

be compensated for the use of facilities?

There are three options available:

(a) The lease may be based on fair market rental.

(b) The lease may be based on a combination of fair market rental

and paragraphs (a) through (h) of Sec. 900.70, provided that no element

of expense is duplicated in fair market rental.

(c) The lease may be based on paragraphs (a) through (h) of

Sec. 900.70 only.

Subpart I--Property Donation Procedures

General

Sec. 900.85 What is the purpose of this subpart?

This subpart implements section 105(f) of the Act regarding

donation of Federal excess and surplus property to tribes or tribal

organizations and acquisition of property with funds provided under a

self-determination contract or grant.

Sec. 900.86 How will the Secretary exercise discretion to acquire and

donate BIA or IHS excess property and excess and surplus Federal

property to an Indian tribe or tribal organization?

The Secretary will give maximum weight to the requests of tribes or

tribal organizations for donation of BIA or IHS excess property and

excess or surplus Federal property, provided that the requesting tribe

or tribal organization shall certify and justify that requested

property is appropriate for use for any purpose for which a self-

determination contract or grant is authorized.

Government-Furnished Property

Sec. 900.87 How does a tribe or tribal organization obtain title to

property furnished by the Federal government for use in the performance

of a contract or grant agreement pursuant to section 105(f)(2)(A) of

the Act?

(a) For government-furnished personal property made available to a

[[Page 2058]]

tribe or tribal organization before October 25, 1994:

(1) The Secretary, in consultation with each tribe or tribal

organization, shall develop a list of the property used in a self-

determination contract.

(2) The tribe or tribal organization shall indicate any items on

the list to which the tribe or tribal organization wants the Secretary

to retain title.

(3) The Secretary shall provide the tribe or tribal organization

with any documentation needed to transfer title to the remaining listed

property to the tribe or tribal organization.

(b) For government-furnished real property made available to a

tribe or tribal organization before October 25, 1994:

(1) The Secretary, in consultation with the tribe or tribal

organization, shall develop a list of the property furnished for use in

a self-determination contract.

(2) The Secretary shall inspect any real property on the list to

determine the presence of any hazardous substance activity, as defined

in 41 CFR 101-47.202(b)(10). If the tribe or tribal organization

desires to take title to any real property on the list, the tribe or

tribal organization shall inform the Secretary, who shall take such

steps as necessary to transfer title to the tribe or tribal

organization.

(c) For government-furnished real and personal property made

available to a tribe or tribal organization on or after October 25,

1994:

(1) The tribe or tribal organization shall take title to all

property unless the tribe or tribal organization requests that the

United States retain the title.

(2) The Secretary shall determine the presence of any hazardous

substance activity, as defined in 41 CFR 101-47.202(b)(10).

Sec. 900.88 What should the tribe or tribal organization do if it

wants to obtain title to government-furnished real property that

includes land not already held in trust?

If the land is owned by the United States but not held in trust for

a tribe or individual Indian, the tribe or tribal organization shall

specify whether it wants to acquire fee title to the land or whether it

wants the land to be held in trust for the benefit of a tribe.

(a) If the tribe or tribal organization requests fee title, the

Secretary shall take the necessary action under Federal law and

regulations to transfer fee title.

(b) If the tribe or tribal organization requests beneficial

ownership with fee title to be held by the United States in trust for a

tribe:

(1) The tribe or tribal organization shall submit with its request

a resolution of support from the governing body of the tribe in which

the beneficial ownership is to be registered.

(2) If the request is submitted to the Secretary of Health and

Human Services for land under the jurisdiction of that Secretary, the

Secretary shall take all necessary steps to effect a transfer the land

to the Secretary of the Interior and shall also forward the tribe or

tribal organization's request and the tribe's resolution.

(3) The Secretary of the Interior shall expeditiously process all

requests in accordance with applicable Federal law and regulations.

(4) The Secretary shall not require the tribe or tribal

organization to furnish any information in support of a request other

than that required by law or regulation.

Sec. 900.89 When may the Secretary elect to reacquire government-

furnished property whose title has been transferred to a tribe or

tribal organization?

When a self-determination contract or grant agreement, or portion

thereof, is retroceded, reassumed, terminated, or expires, the

Secretary shall have the option to take title to any item of

government-furnished property:

(a) whose title has been transferred to a tribe or tribal

organization;

(b) that is still in use in the program; and

(c) that has a value in excess of $5,000.

Sec. 900.90 Does government-furnished real property to which a tribe

or tribal organization has taken title continue to be eligible for

facilities operation and maintenance funding from the Secretary?

Yes.

Contractor-Purchased Property

Sec. 900.91 Who takes title to property purchased with funds under a

self-determination contract or grant agreement pursuant to section

105(f)(2)(A)?

The contractor takes title to such property, unless the contractor

chooses to have the United States take title. In that event, the

contractor must inform the Secretary of the purchase and identify the

property and its location in such manner as the contractor and the

Secretary deem necessary. A request for the United States to take title

to any item of contractor-purchased property may be made at any time. A

request for the Secretary to take fee title to real property shall be

expeditiously processed in accordance with applicable Federal law and

regulation.

Sec. 900.92 What should the tribe or tribal organization do if it

wants contractor-purchased real property to be taken into trust?

The contractor shall submit a resolution of support from the

governing body of the tribe in which the beneficial ownership is to be

registered. If the request to take contractor-purchased real property

into trust is submitted to the Secretary of Health and Human Services,

that Secretary shall transfer the request to the Secretary of the

Interior. The Secretary of the Interior shall expeditiously process all

requests in accord with applicable Federal law and regulation.

Sec. 900.93 When may the Secretary elect to acquire title to

contractor-purchased property?

When a self-determination contract or grant agreement, or portion

thereof, is retroceded, reassumed, terminated, or expires, the

Secretary shall have the option to take title to any item of

contractor-purchased property:

(a) whose title has been transferred to a tribe or tribal

organization;

(b) that is still in use in the program; and

(c) that has a value in excess of $5,000.

Sec. 900.94 Is contractor-purchased real property to which a tribe or

tribal organization holds title eligible for facilities operation and

maintenance funding from the Secretary?

Yes.

Bia and IHS Excess Property

Sec. 900.95 What is BIA or IHS excess property?

BIA or IHS excess property means property under the jurisdiction of

the BIA or IHS that is excess to the agency's needs and the discharge

of its responsibilities.

Sec. 900.96 How can tribes or tribal organizations learn about BIA and

IHS excess property?

The Secretary shall periodically furnish to tribes or tribal

organizations a listing of all excess BIA or IHS personal property

before reporting the property to GSA or to any other Federal agency as

excess. The listing shall identify the agency official to whom a

request for donation shall be submitted.

Sec. 900.97 How can a tribe or tribal organization acquire excess BIA

or IHS property?

(a) The tribe or tribal organization shall submit to the

appropriate Secretary a request for specific property that includes a

certification and justification that the property is

[[Page 2059]]

intended for use in connection with a self-determination contract or

grant. The Secretary shall expeditiously process the request and shall

exercise discretion to donate the property in the manner described in

this subpart I.

(b) If more than one request for the same item of personal property

is submitted, the Secretary shall award the item to the first

requester. if there is a tie, the Secretary shall award the item to the

requestor with the lowest transportation costs. The Secretary shall

make the donation as expeditiously as possible.

(c) If more than one request for the same piece of real property is

submitted, the Secretary shall award the property to the tribe or

tribal organization whose reservation or trust land is closest to the

real property requested.

Sec. 900.98 Who takes title to excess BIA or IHS property donated to a

tribe or tribal organization?

The tribe or tribal organization takes title to donated excess BIA

or IHS property. The Secretary shall provide the tribe or tribal

organization with all documentation needed to vest title in the tribe

or tribal organization.

Sec. 900.99 Who takes title to any land that is part of excess BIA or

IHS real property donated to a tribe or tribal organization?

(a) If a tribe or tribal organization requests donation of fee

title to excess real property that includes land not held in trust for

a tribe, the tribe or tribal organization shall so specify in its

request for donation. The Secretary shall take the necessary action

under Federal law and regulations to transfer the title to the tribe or

tribal organization.

(b) If a tribe or tribal organization asks the Secretary to donate

excess real property that includes land and requests that fee title to

the land be held by the United States in trust for a tribe, the

requestor shall submit a resolution of support from the governing body

of the tribe in which the beneficial ownership is to be registered.

(1) If the donation request is submitted to the Secretary of Health

and Human Services, that Secretary shall take all steps necessary to

transfer the land to the Secretary of the Interior with the tribe or

tribal organization's request and the tribe's resolution. The Secretary

of the Interior shall expeditiously process all requests in accord with

applicable Federal law and regulations.

(2) The Secretary shall not require the tribe or tribal

organization to furnish any information in support of a request other

than that required by law or regulation.

Sec. 900.100 May the Secretary elect to reacquire excess BIA or IHS

property whose title has been transferred to a tribe or tribal

organization?

Yes. When a self-determination contract or grant agreement, or

portion thereof, is retroceded, reassumed, terminated, or expires, the

Secretary shall have the option to take title any item of the property:

(a) whose title has been transferred to a tribe or tribal

organization;

(b) that is still in use in the program; and

(c) that has a value in excess of $5,000.

Sec. 900.101 Is excess BIA or IHS real property to which a tribe or

tribal organization has taken title eligible for facilities operation

and maintenance funding from the Secretary?

Yes.

Excess or Surplus Government Property of Other Agencies

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

agencies?

(a) ``Excess government property'' is real or personal property

under the control of a Federal agency, other than BIA and IHS, which is

not required for the agency's needs and the discharge of its

responsibilities.

(b) ``Surplus government property'' means excess real or personal

property that is not required for the needs of and the discharge of the

responsibilities of all Federal agencies that has been declared surplus

by the General Services Administration.

Sec. 900.103 How can tribes or tribal organizations learn about

property that has been designated as excess or surplus government

property?

The Secretary shall periodically furnish to tribes or tribal

organizations listings of such property as may be made available from

time to time by GSA or other Federal agencies, and shall obtain

listings upon the request of a tribe or tribal organization.

Sec. 900.104 How may a tribe or tribal organization receive excess or

surplus government property of other agencies?

(a) The tribe or tribal organization shall file a request for

specific property with the Secretary, and shall certify and justify

that the property is appropriate for use for a purpose for which a

self-determination contract or grant is authorized under the Act.

(b) The Secretary shall expeditiously process such request and

shall exercise discretion to acquire the property in the manner

described in the Federal Property Management Regulation, 41 CFR Chapter

101.

(c) Upon approval, the Secretary shall immediately request

acquisition of the property from the GSA or the holding agency, as

appropriate. If the tribe or tribal organization informs the Secretary

that a ``freeze'' has been placed on the requested property, the

Secretary shall make every good faith effort to process the request in

order to obtain the property within the ``freeze'' period.

(d) The Secretary shall specify that the property is requested for

donation to a tribe or tribal organization pursuant to authority

provided in section 105(f)(3) of the Act.

(e) The Secretary shall request a waiver of any fees for transfer

of the property in accordance with applicable Federal regulations.

Sec. 900.105 Who takes title to excess or surplus Federal property

donated to a tribe or tribal organization?

(a) Title to any donated excess or surplus Federal personal

property shall vest in the tribe or tribal organization upon taking

possession.

(b) Legal title to donated excess or surplus Federal real property

shall vest in the tribe or tribal organization upon acceptance by the

tribe or tribal organization of a proper deed of conveyance.

(c) If the donation of excess or surplus Federal real property

includes land owned by the United States but not held in trust for a

tribe, the tribe or tribal organization shall specify whether it wants

to acquire fee title to the land or whether it wants the land to be

held in trust for the benefit of a tribe.

(1) If the tribe or tribal organization requests fee title, the

Secretary shall take the necessary action under Federal law and

regulations to transfer fee title to the tribe or tribal organization.

(2) If the tribe or tribal organization requests beneficial

ownership with fee title to be held by the United States in trust for a

tribe:

(i) The tribe or tribal organization shall submit with its request

a resolution of support from the governing body of the tribe in which

the beneficial ownership is to be registered.

(ii) If the donation request of the tribe or tribal organization is

submitted to the Secretary of Health and Human Services, that Secretary

shall take all necessary steps to acquire the land and transfer it to

the Secretary of the Interior and shall also forward the tribe or

tribal organization's request and the tribe's resolution.

(iii) The Secretary of the Interior shall expeditiously process all

requests in accord with applicable Federal law and regulations.

(iv) The Secretary shall not require submission of any information

other

[[Page 2060]]

than that required by Federal law and regulation.

Sec. 900.106 If a contract or grant agreement or portion thereof is

retroceded, reassumed, terminated, or expires, may the Secretary

reacquire title to excess or surplus Federal property of other agencies

that was donated to a tribe or tribal organization?

No. Section 105(f)(3) of the Act does not give the Secretary the

authority to reacquire title to excess or surplus government property

acquired from other agencies for donation to a tribe or tribal

organization.

Property Eligible for Replacement Funding

Sec. 900.107 Is property that a tribe or tribal organization obtains

title under this subpart eligible for replacement funding?

Yes. Government-furnished property, contractor-purchased property

and excess BIA and IHS property dona

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