§ 450j–1 TITLE 25—INDIANS Page 162

Subsec. (c)(1)(B). Pub. L. 101–644, §203(c), amended

subpar. (B) generally. Prior to amendment, subpar. (B)

read as follows: ‘‘for an indefinite term in the case of

a mature contract.’’

Subsec. (d). Pub. L. 101–644, §203(d), amended subsec.

(d) generally. Prior to amendment, subsec. (d) read as

follows:

‘‘(1) No later than fiscal year 1990, the Secretary shall

begin using the calendar year as the basis for contracts

and agreements under this Act except for instances

where the Secretary and the Indian tribe or tribal organization agree on a different period.

‘‘(2) The Secretary shall submit a report to the Congress within ninety days of October 5, 1988, on the

amounts of any additional obligational authority needed to implement this subsection in fiscal year 1989.’’

Subsec. (f)(2), (3). Pub. L. 101–644, §203(e), inserted ‘‘or

real’’ after ‘‘personal’’.

1988—Subsec. (a). Pub. L. 100–472, §204(b), (c), substituted ‘‘section 450f’’ for ‘‘sections 450f and 450g’’ and

inserted proviso relating to nonapplication of Office of

Federal Procurement Policy Act to self-determination

contracts.

Subsec. (b). Pub. L. 100–472, §204(d), which directed

the amendment of subsec. (b) by substituting ‘‘sections

450f and 450h’’ for ‘‘sections 450f, 450g, and 450h’’ was executed by substituting the new language for ‘‘section

450f, 450g, or 450h’’ as the probable intent of Congress.

Subsec. (c). Pub. L. 100–472, §204(e), added subsec. (c)

and struck out former subsec. (c) which read as follows:

‘‘Any contract requested by a tribe pursuant to sections 450f and 450g of this title shall be for a term not

to exceed one year unless the appropriate Secretary determines that a longer term would be advisable: Provided, That such term may not exceed three years and

shall be subject to the availability of appropriations:

Provided, further, That the amounts of such contracts

may be renegotiated annually to reflect factors, including but not limited to cost increases beyond the control

of a tribal organization.’’

Subsec. (d). Pub. L. 100–472, §204(e), added subsec. (d)

and struck out former subsec. (d) which related to revision or amendment of contracts or grants at request or

with consent of tribal organization and effective date

for retrocession of contracts.

Subsec. (e). Pub. L. 100–472, §204(e), added subsec. (e)

and struck out former subsec. (e) which authorized the

Secretary to permit tribal organizations to use existing

school buildings, hospitals, and other facilities and

equipment therein in carrying out grants or contracts.

Subsec. (f). Pub. L. 100–472, §204(e), added subsec. (f).

Former subsec. (f) redesignated (g).

Subsec. (g). Pub. L. 100–472, §204(f), redesignated

former subsec. (f) as (g) and substituted ‘‘section 450f’’

for ‘‘sections 450f and 450g’’. Former subsec. (g) redesignated (h).

Subsec. (h). Pub. L. 100–472, §204(g), (h), redesignated

former subsec. (g) as (h), substituted ‘‘sections 450f and

450h’’ for ‘‘sections 450f, 450g, and 450h’’, and ‘‘Health

and Human Services’’ for ‘‘Health, Education, and Welfare’’. Former subsec. (h), which related to minimum

amount of funds under terms of contracts, was struck

out.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 450b, 450j–1,

450k, 450l, 458cc, 458ff, 2008, 2504, 2508, 3307 of this title.

§ 450j–1. Contract funding and indirect costs

(a) Amount of funds provided

(1) The amount of funds provided under the

terms of self-determination contracts entered

into pursuant to this subchapter shall not be

less than the appropriate Secretary would have

otherwise provided for the operation of the programs or portions thereof for the period covered

by the contract, without regard to any organizational level within the Department of the Interior or the Department of Health and Human

Services, as appropriate, at which the program,

function, service, or activity or portion thereof,

including supportive administrative functions

that are otherwise contractable, is operated.

(2) There shall be added to the amount required by paragraph (1) contract support costs

which shall consist of an amount for the reasonable costs for activities which must be carried

on by a tribal organization as a contractor to

ensure compliance with the terms of the contract and prudent management, but which—

(A) normally are not carried on by the respective Secretary in his direct operation of

the program; or

(B) are provided by the Secretary in support

of the contracted program from resources

other than those under contract.

(3)(A) The contract support costs that are eligible costs for the purposes of receiving funding

under this subchapter shall include the costs of

reimbursing each tribal contractor for reasonable and allowable costs of—

(i) direct program expenses for the operation

of the Federal program that is the subject of

the contract, and

(ii) any additional administrative or other

expense related to the overhead incurred by

the tribal contractor in connection with the

operation of the Federal program, function,

service, or activity pursuant to the contract,

except that such funding shall not duplicate any

funding provided under subsection (a)(1) of this

section.

(B) On an annual basis, during such period as

a tribe or tribal organization operates a Federal

program, function, service, or activity pursuant

to a contract entered into under this subchapter, the tribe or tribal organization shall

have the option to negotiate with the Secretary

the amount of funds that the tribe or tribal organization is entitled to receive under such contract pursuant to this paragraph.

(4) For each fiscal year during which a self-determination contract is in effect, any savings

attributable to the operation of a Federal program, function, service, or activity under a selfdetermination contract by a tribe or tribal organization (including a cost reimbursement construction contract) shall—

(A) be used to provide additional services or

benefits under the contract; or

(B) be expended by the tribe or tribal organization in the succeeding fiscal year, as provided in section 13a of this title.

(5) Subject to paragraph (6), during the initial

year that a self-determination contract is in effect, the amount required to be paid under paragraph (2) shall include startup costs consisting

of the reasonable costs that have been incurred

or will be incurred on a one-time basis pursuant

to the contract necessary—

(A) to plan, prepare for, and assume operation of the program, function, service, or activity that is the subject of the contract; and

(B) to ensure compliance with the terms of

the contract and prudent management.

(6) Costs incurred before the initial year that

a self-determination contract is in effect may
Page 163 TITLE 25—INDIANS § 450j–1

not be included in the amount required to be

paid under paragraph (2) if the Secretary does

not receive a written notification of the nature

and extent of the costs prior to the date on

which such costs are incurred.

(b) Reductions and increases in amount of funds

provided

The amount of funds required by subsection

(a) of this section—

(1) shall not be reduced to make funding

available for contract monitoring or administration by the Secretary;

(2) shall not be reduced by the Secretary in

subsequent years except pursuant to—

(A) a reduction in appropriations from the

previous fiscal year for the program or function to be contracted;

(B) a directive in the statement of the

managers accompanying a conference report

on an appropriation bill or continuing resolution;

(C) a tribal authorization;

(D) a change in the amount of passthrough funds needed under a contract; or

(E) completion of a contracted project, activity, or program;

(3) shall not be reduced by the Secretary to

pay for Federal functions, including, but not

limited to, Federal pay costs, Federal employee retirement benefits, automated data

processing, contract technical assistance or

contract monitoring;

(4) shall not be reduced by the Secretary to

pay for the costs of Federal personnel displaced by a self-determination contract; and

(5) may, at the request of the tribal organization, be increased by the Secretary if necessary to carry out this subchapter or as provided in section 450j(c) of this title.

Notwithstanding any other provision in this

subchapter, the provision of funds under this

subchapter is subject to the availability of appropriations and 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

subchapter.

(c) Annual report

The Secretary shall provide an annual report

in writing on or before May 15 of each year to

the Congress on the implementation of this subchapter. Such report shall include—

(1) an accounting of the total amounts of

funds provided for each program and budget

activity for direct program costs and contract

support costs of tribal organizations under

self-determination contracts during the previous fiscal year;

(2) an accounting of any deficiency of funds

needed to provide required contract support

costs to all contractors for the current fiscal

year;

(3) the indirect costs rate and type of rate

for each tribal organization negotiated with

the appropriate Secretary;

(4) the direct cost base and type of base from

which the indirect cost rate is determined for

each tribal organization;

(5) the indirect cost pool amounts and the

types of costs included in the indirect cost

pools; and

(6) an accounting of any deficiency of funds

needed to maintain the preexisting level of

services to any tribes affected by contracting

activities under this subchapter, and a statement of the amount of funds needed for transitional purposes to enable contractors to convert from a Federal fiscal year accounting

cycle to a different accounting cycle, as authorized by section 450j(d) of this title.

(d) Treatment of shortfalls in indirect cost recoveries

(1) Where a tribal organization’s allowable indirect cost recoveries are below the level of indirect costs that the tribal organizations should

have received for any given year pursuant to its

approved indirect cost rate, and such shortfall is

the result of lack of full indirect cost funding by

any Federal, State, or other agency, such shortfall in recoveries shall not form the basis for

any theoretical over-recovery or other adverse

adjustment to any future years’ indirect cost

rate or amount for such tribal organization, nor

shall any agency seek to collect such shortfall

from the tribal organization.

(2) Nothing in this subsection shall be construed to authorize the Secretary to fund less

than the full amount of need for indirect costs

associated with a self-determination contract.

(e) Liability for indebtedness incurred before fiscal year 1992

Indian tribes and tribal organizations shall

not be held liable for amounts of indebtedness

attributable to theoretical or actual under-recoveries or theoretical over-recoveries of indirect costs, as defined in Office of Management

and Budget Circular A–87, incurred for fiscal

years prior to fiscal year 1992.

(f) Limitation on remedies relating to cost disallowances

Any right of action or other remedy (other

than those relating to a criminal offense) relating to any disallowance of costs shall be barred

unless the Secretary has given notice of any

such disallowance within three hundred and

sixty-five days of receiving any required annual

single agency audit report or, for any period

covered by law or regulation in force prior to

October 19, 1984, any other required final audit

report. Such notice shall set forth the right of

appeal and hearing to the board of contract appeals pursuant to section 450m–1 of this title.

For the purpose of determining the 365-day period specified in this paragraph, an audit report

shall be deemed to have been received on the

date of actual receipt by the Secretary, if, within 60 days after receiving the report, the Secretary does not give notice of a determination

by the Secretary to reject the single-agency report as insufficient due to noncompliance with

chapter 75 of title 31 or noncompliance with any

other applicable law. Nothing in this subsection

shall be deemed to enlarge the rights of the Secretary with respect to section 476 of this title.

(g) Addition to contract of full amount contractor entitled; adjustment

Upon the approval of a self-determination contract, the Secretary shall add to the contract

the full amount of funds to which the contractor
§ 450j–1 TITLE 25—INDIANS Page 164

is entitled under subsection (a) of this section,

subject to adjustments for each subsequent year

that such tribe or tribal organization administers a Federal program, function, service, or

activity under such contract.

(h) Indirect costs for contracts for construction

programs

In calculating the indirect costs associated

with a self-determination contract for a construction program, the Secretary shall take into

consideration only those costs associated with

the administration of the contract and shall not

take into consideration those moneys actually

passed on by the tribal organization to construction contractors and subcontractors.

(i) Indian Health Service and Bureau of Indian

Affairs budget consultations

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 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).

(j) Use of funds for matching or cost participation requirements

Notwithstanding any other provision of law, a

tribal organization may use funds provided

under a self-determination contract to meet

matching or cost participation requirements

under other Federal and non-Federal programs.

(k) Allowable uses of funds without approval of

Secretary

Without intending any limitation, a tribal organization may, without the approval of the

Secretary, expend funds provided under a selfdetermination contract for the following purposes, to the extent that the expenditure of the

funds is supportive of a contracted program:

(1) Depreciation and use allowances not

otherwise specifically prohibited by law, including the depreciation of facilities owned by

the tribe or tribal organization.

(2) Publication and printing costs.

(3) Building, realty, and facilities costs, including rental costs or mortgage expenses.

(4) Automated data processing and similar

equipment or services.

(5) Costs for capital assets and repairs.

(6) Management studies.

(7) Professional services, other than services

provided in connection with judicial proceedings by or against the United States.

(8) Insurance and indemnification, including

insurance covering the risk of loss of or damage to property used in connection with the

contract without regard to the ownership of

such property.

(9) Costs incurred to raise funds or contributions from non-Federal sources for the purpose

of furthering the goals and objectives of the

self-determination contract.

(10) Interest expenses paid on capital expenditures such as buildings, building renovation,

or acquisition or fabrication of capital equipment, and interest expenses on loans necessitated due to delays by the Secretary in providing funds under a contract.

(11) Expenses of a governing body of a tribal

organization that are attributable to the management or operation of programs under this

subchapter.

(12) Costs associated with the management

of pension funds, self-insurance funds, and

other funds of the tribal organization that provide for participation by the Federal Government.

(l) Suspension, withholding, or delay in payment

of funds

(1) The Secretary may only suspend, withhold,

or delay the payment of funds for a period of 30

days beginning on the date the Secretary makes

a determination under this paragraph to a tribal

organization under a self-determination contract, if the Secretary determines that the tribal organization has failed to substantially carry

out the contract without good cause. In any

such case, the Secretary shall provide the tribal

organization with reasonable advance written

notice, technical assistance (subject to available

resources) to assist the tribal organization, a

hearing on the record not later than 10 days

after the date of such determination or such

later date as the tribal organization shall approve, and promptly release any funds withheld

upon subsequent compliance.

(2) With respect to any hearing or appeal conducted pursuant to this subsection, the Secretary shall have the burden of proof to establish by clearly demonstrating the validity of the

grounds for suspending, withholding, or delaying

payment of funds.

(m) Use of program income earned

The program income earned by a tribal organization in the course of carrying out a self-determination contract—

(1) shall be used by the tribal organization to

further the general purposes of the contract;

and

(2) shall not be a basis for reducing the

amount of funds otherwise obligated to the

contract.

(n) Reduction of administrative or other responsibilities of Secretary; use of savings

To the extent that programs, functions, services, or activities carried out by tribal organizations pursuant to contracts entered into under

this subchapter 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 subsection (a) of this section, 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.

(o) Rebudgeting by tribal organization

Notwithstanding any other provision of law

(including any regulation), a tribal organization

that carries out a self-determination contract

may, with respect to allocations within the ap-
Page 165 TITLE 25—INDIANS § 450k

proved budget of the contract, rebudget to meet

contract requirements, if such rebudgeting

would not have an adverse effect on the performance of the contract.

(Pub. L. 93–638, title I, §106, as added Pub. L.

100–472, title II, §205, Oct. 5, 1988, 102 Stat. 2292;

amended Pub. L. 101–301, §2(a)(8), (9), May 24,

1990, 104 Stat. 207; Pub. L. 101–644, title II,

§203(a), Nov. 29, 1990, 104 Stat. 4666; Pub. L.

103–413, title I, §102(14)–(19), Oct. 25, 1994, 108

Stat. 4257–4259.)

PRIOR PROVISIONS

A prior section 106 of Pub. L. 93–638 was renumbered

section 105 by Pub. L. 100–472 and is classified to section

450j of this title.

AMENDMENTS

1994—Subsec. (a)(1). Pub. L. 103–413, §102(14)(A), inserted before period at end ‘‘, without regard to any organizational level within the Department of the Interior or the Department of Health and Human Services,

as appropriate, at which the program, function, service,

or activity or portion thereof, including supportive administrative functions that are otherwise contractable,

is operated’’.

Subsec. (a)(2). Pub. L. 103–413, §102(14)(B), inserted

‘‘an amount for’’ after ‘‘consist of’’.

Subsec. (a)(3). Pub. L. 103–413, §102(14)(C), added par.

(3) and struck out former par. (3) which read as follows:

‘‘Any savings in operation under a self-determination

contract shall be utilized to provide additional services

or benefits under the contract or be expended in the

succeeding fiscal year as provided in section 13a of this

title.’’

Subsec. (a)(4) to (6). Pub. L. 103–413, §102(14)(C), added

pars. (4) to (6).

Subsec. (c). Pub. L. 103–413, §102(15)(A), substituted

‘‘May 15’’ for ‘‘March 15’’ in introductory provisions.

Subsec. (c)(1), (2). Pub. L. 103–413, §102(15)(B), substituted ‘‘contract support costs’’ for ‘‘indirect costs’’.

Subsec. (c)(6). Pub. L. 103–413, §102(15)(C)–(E), added

par. (6).

Subsec. (f). Pub. L. 103–413, §102(16), inserted after

second sentence ‘‘For the purpose of determining the

365-day period specified in this paragraph, an audit report shall be deemed to have been received on the date

of actual receipt by the Secretary, if, within 60 days

after receiving the report, the Secretary does not give

notice of a determination by the Secretary to reject

the single-agency report as insufficient due to noncompliance with chapter 75 of title 31 or noncompliance

with any other applicable law.’’

Subsec. (g). Pub. L. 103–413, §102(17), added subsec. (g)

and struck out former subsec. (g) which read as follows:

‘‘Upon the approval of a self-determination contract

and at the request of an Indian tribe or tribal organization, the Secretary shall add the indirect cost funding

amount awarded for a self-determination contract to

the amount awarded for direct program funding for the

first year and, subject to adjustments in the amount of

direct program costs for the contract, for each subsequent year that the program remains continuously

under contract.’’

Subsec. (i). Pub. L. 103–413, §102(18), added subsec. (i)

and struck out former subsec. (i) which read as follows:

‘‘Within one month after October 5, 1988, the Secretary

is mandated to establish a team in each area of the Bureau of Indian Affairs which consists of agency personnel (area personnel in the Navajo Area and in the case

of Indian tribes not served by an agency) and tribal representatives for the purpose of analyzing the ‘Indian

Priority System’ and other aspects of the budgeting

and funding allocation process of the Bureau of Indian

Affairs for the purpose of making a report to Congress

with appropriate recommendations for changes and legislative actions to achieve greater tribal decision-making authority over the use of funds appropriated for the

benefit of the tribes and their members. The report

along with the analysis, findings and recommendations

of the area teams shall be submitted to Congress within

six months of October 5, 1988. The Secretary may submit to Congress separate comments on the information

and recommendations on the report.’’

Subsecs. (j) to (o). Pub. L. 103–413, §102(19), added subsecs. (j) to (o).

1990—Subsec. (e). Pub. L. 101–644 substituted ‘‘1992’’

for ‘‘1988’’.

Subsec. (f). Pub. L. 101–301, §2(a)(8), substituted

‘‘prior to enactment of chapter 75 of title 31’’ for ‘‘prior

to enactment of the Single Agency Audit Act of 1984

(chapter 75 of title 31)’’, which for purposes of codification was translated as ‘‘prior to October 19, 1984’’, requiring no change in text.

Subsec. (i). Pub. L. 101–301, §2(a)(9), substituted

‘‘agency personnel (area personnel in the Navajo Area

and in the case of Indian tribes not served by an agency)’’ for ‘‘agency personnel’’.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 13a, 450b, 450c,

450f, 450j, 450l, 2508 of this title.

§ 450k. Rules and regulations

(a) Authority of Secretaries of the Interior and of

Health and Human Services to promulgate;

time restriction

(1) Except as may be specifically authorized in

this subsection, or in any other provision of this

subchapter, the Secretary of the Interior and

the Secretary of Health and Human Services

may not promulgate any regulation, nor impose

any nonregulatory requirement, relating to selfdetermination contracts or the approval, award,

or declination of such contracts, except that the

Secretary of the Interior and the Secretary of

Health and Human Services may promulgate

regulations under this subchapter relating to

chapter 171 of title 28, 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

450h of this title, property donation procedures

arising under section 450j(f) of this title, internal agency procedures relating to the implementation of this subchapter, 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.

(2)(A) The regulations promulgated under this

subchapter, including the regulations referred to

in this subsection, shall be promulgated—

(i) in conformance with sections 552 and 553

of title 5 and subsections (c), (d), and (e) of

this section; and

(ii) as a single set of regulations in title 25

of the Code of Federal Regulations.

(B) The authority to promulgate regulations

set forth in this subchapter shall expire if final

regulations are not promulgated within 20

months after October 25, 1994.

(b) Conflicting laws and regulations

The provisions of this subchapter shall supersede any conflicting provisions of law (including