Opinion ID: 216353
Heading Depth: 1
Heading Rank: 2

Heading: Did the BIA have Contract Authority for Contract-Support Costs?

Text: Plaintiffs contend that Congress granted the Secretary contract authority to enter into ISDA contracts when it directed the Secretary to pay in full the contract-support costs on ISDA contracts (regardless of the adequacy of appropriations for those costs). They acknowledge the following language of 25 U.S.C. § 450j-1(b) that limits the provision of funds to what is appropriated: Notwithstanding any other provision in this subchapter [the entire ISDA], 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. (Emphasis added). They argue, however, that this language does not limit the government's financial obligation for contract-support costs. To begin with, Plaintiffs remind us that the ISDA's legislative history reflects congressional intent that tribes not be penalized by government underpayment of contract-support costs. See S. Rep. 100-274, as reprinted in 1988 U.S.C.C.A.N. at 2628 (the Committee believes strongly that Indian tribes should not be forced to use their own financial resources to subsidize federal programs.). They then point to two ISDA provisions suggesting a categorical government obligation. The first is § 450j-1(a)(2), which states: There shall be added to the amount required by paragraph (1) [ (the Secretarial amount)] 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. (Emphases added). The other is § 450j-1(g) (added to the ISDA six years after enactment of the subject-to-availability language of § 450j-1(b)), which speaks of contract-support costs as an entitlement: Upon the approval of a self-determination contract, the Secretary shall add to the contract the full amount of funds to which the contractor 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. (Emphasis added). [6] In light of this mandatory language, Plaintiffs contend that the subject-to-availability restriction on the provision of funds under this subchapter, § 450j-1(b), must limit only payments by the Secretary, not the government's ultimate liability. Under their construction of the statute,  payment of the full amount by the Secretary is subject to available appropriations to make those payments, but if such appropriations are not available then the underpaid contract obligation remains in place and the government remains liable in damages. Aplt. Br. at 49-50. Plaintiffs' argument is interesting, but unpersuasive. They do not explain why there would be any reason to include in the ISDA a provision saying that the Secretary cannot pay out money that has not been appropriated. Such a provision would seem superfluous. If such payments are not barred by the Constitution's Appropriations Clause, then the Anti-Deficiency Act should do the trick. One could also wonder what good Congress thought it would accomplish by restricting payments by the Secretary but not the liability of the government. The effect on the overall federal budget would be the same whether the money comes from the Secretary's budget or from the fund used to pay judgments for the government's breach of contractual duties. See 31 U.S.C. § 1304 (judgment fund). When Congress says that the provision of funds under this subchapter [the ISDA] is subject to the availability of appropriations, 25 U.S.C. § 450j-1(b), it must mean that the government's obligation on ISDA contracts is limited by the amount appropriated. As for the addition of § 450j-1(g) several years after enactment of the subject-to-availability language in § 450j-1(b), if subsection (g) were intended to limit the reach of that language in subsection (b), one would expect Congress to have been explicit about it, as required by 31 U.S.C. § 1301(d) (contract authority must be specifically state[d]). Yet Congress did not bother to amend § 450j-1(b) to say that the subject-to-availability provision that otherwise applies to the entire ISDA does not apply to contract-support costs. Most importantly, Plaintiffs' construction of the subject-to-availability provision is contrary to the Supreme Court's view. Referring to § 450j-1(b), Cherokee Nation said: Language of this kind is often used with respect to Government contracts. This kind of language normally makes clear that an agency and a contracting party can negotiate a contract prior to the beginning of a fiscal year but that the contract will not become binding unless and until Congress appropriates funds for that year. It also makes clear that a Government contracting officer lacks any special statutory authority needed to bind the Government without regard to the availability of appropriations. 543 U.S. at 643, 125 S.Ct. 1172 (citations omitted; emphasis added). I therefore conclude that the Secretary did not have contract authority to bind the government to pay full contract-support costs regardless of the adequacy of appropriations. I now turn to Plaintiffs' argument that there were available funds to pay each tribal organization's contract-support costs in full.