The U.S. Supreme Court is again being asked to review a federal funding policy that tribes say treats them as second class citizens.

Over the last 30 years, tribes have exercised greater control of their affairs by taking over programs that were once managed by the government. But they say the federal agencies aren't providing tribes with enough funds to administer the services properly.

"If the U.S. has a contractual relationship with anybody out there in the U.S., it honors those contracts," Ron Allen, chairman of the Jamestown S'Klallam Tribe of Washington, said recently. "Today, the U.S. is not honoring the full contracts that it has with existing tribes."

Under the Indian Self-Determination and Education Assistance Act, tribes enter into contracts to manage Indian Health Service and the Bureau of Indian Affairs programs. The law, passed in 1975, requires that the tribes receive no less than the amount the government would have spent on the programs.

The law also requires the government provide tribes with additional funds, known as contract support costs, needed to carry out the contracts. A dispute has arisen, though, over just how much is needed.

According to the National Congress of American Indians, the dispute is costing tribes millions of dollars. For the current year, NCAI estimates the shortfall for contract support costs at the IHS is $94 million while the shortfall at the BIA is $48 million.

In a brief to the high court, the Department of Justice says the federal agencies can't award full contract support cases to tribes due to two limitations imposed by Congress. The first is the amount Congress appropriates for the contracts. The second is a restriction on "reprogramming," or shifting other funds, to cover the shortfalls.

"Those limits reflect the fact that self-determination agreements are not government procurement contracts -- they are not purchases for the federal government," the brief states. "Instead, they are governmental funding arrangements under which the tribes are substituted for a federal agency both in furnishing governmental services and in receiving federal funding for that purpose."

Two federal appeals courts have agreed with this interpretation. In separate decisions, the 9th Circuit and the 10th Circuit were sympathetic to tribal complaints but said the agencies were restricted by Congress.

"As this case demonstrates, the adequacy of the funding provided for tribal indirect costs has proven to be a recurring and troublesome issue," wrote 10th Circuit Judge Stephen H. Anderson in a unanimous November 2002 decision against the the Cherokee Nation of Oklahoma and the Duck Valley Shoshone-Paiute Tribe of Nevada. The 9th Circuit case involved the Shoshone-Bannock Nation of Idaho.

The Federal Circuit, however, arrived at a different conclusion. In July 2003, the court said the Cherokee Nation was owed full contract support costs for administering IHS programs. "We cannot agree that the Secretary had discretion to refuse to reprogram to meet his contractual obligations," wrote Judge Timothy B. Dyk in a unanimous ruling.

The tribe had already appealed the 10th Circuit ruling when the Federal Circuit ruling came down against the government. In response, the Department of Justice said it did not oppose Supreme Court review of the 10th Circuit case, and then filed a petition to review the Federal Circuit case. A conference is scheduled March 19 to review both cases, after which the justices will announce whether to hear them.

NCAI is urging members of Congress to amend existing law in order to fund self-determination contracts fully. "It is time to change the system for funding these government contracts," NCAI president Tex Hall wrote in a November 7 letter to the Senate Indian Affairs Committee and the House Resources Committee. "Indian tribes should no longer be treated as 'second class' contractors."

"Let's pay these contracts 100 percent," said Allen, who spoke about the issue at NCAI's recent winter session. Allen serves as NCAI's treasurer.

Get the Decision:
Thompson v. Cherokee Nation (July 3, 2003)

Relevant Documents:
Docket Sheet No. 03-853: Thompson v. Cherokee Nation | Docket Sheet No. 02-1472: Cherokee Nation v. Thompson | Department of Justice Petition No. 03-853 | Department of Justice Supplemental Brief No. 02-1472

Related Decisions:
10th Circuit: Cherokee Nation v. Thompson, No. 01-7106 (November 26, 2002) | 9th Circuit: Shoshone-Bannock v. Thompson (October 16, 2001) | 9th Circuit: Navajo Nation v. HHS, No. 99-16129 (April 8, 2003)

Relevant Links:
Contract Support Costs, NCAI - http://www.ncai.org/main/pages/issues/
governance/contract_support.asp