02-300. Distribution of Fiscal Year 2002 Contract Support Funds

AGENCY:

Bureau of Indian Affairs, Interior.

ACTION:

Notice of method of distribution and use of FY 2002 contract support funds.

SUMMARY:

The purpose of this announcement is to issue the Bureau of Indian Affairs (BIA) administrative instructions for implementing Public Law 93-638, as amended. These administrative instructions are designed to provide BIA personnel with assistance in carrying out their responsibilities when distributing Contract Support Funds (CSF). These instructions are not regulations establishing program requirements.

DATES:

The CSF Needs Report for ongoing/existing contracts and annual funding agreements are due on July 15, 2002. The CSF Needs Reports for new and expanded contracts and annual funding agreements are due periodically throughout the year as the need arises. All new and expanded contracts and annual funding agreements starting between October 11, 2001 and January 1, 2002, will be considered to have a January 1, 2002, start date.

ADDRESSES:

Send the CSF Needs Report to Jim Thomas, Bureau of Indian Affairs, Division of Self-Determination Services, 1849 C Street, NW., MS-4660-MIB, Washington, DC 20240.

FOR FURTHER INFORMATION CONTACT:

Jim Thomas, Chief, Division of Self-Determination Services, Telephone [phone].

SUPPLEMENTARY INFORMATION:

A total of $133,209,000 is available for contract support requirements (excluding construction requirements) during FY 2002. Congressional language allows the use of $130,209,000 in FY 2002 to pay costs of ongoing/existing self-determination and self-governance awards for programs under contract/compact before FY 2002 and $3,000,000 for the Indian Self-Determination Fund (ISD) to be used for new and expanded contracts/compacts. Each BIA Regional Office and the Office of Self-Governance (hereinafter office) has the responsibility for tribes located within their respective region to work with the tribes in identifying new and expanded contracts and annual funding agreements and reporting this information to the Division of Self-Determination Services as mentioned in this announcement. CSF will be added to awards made under section 102 and title IV of the Indian Self-Determination and Education Assistance Act, as amended. Awards made under section 103 of this Act will not receive CSF to meet indirect costs.

Basis for Payment of CSF

The BIA may only pay indirect costs attributable to programs included in the BIA's Public Law 93-638 awards. Awards by the BIA with funds originating from other agencies which have been transferred to the BIA for award under Public Law 93-638 are not eligible for CSF appropriated to the BIA. Contract support/indirect costs requirements for these awards must be met from within the amounts transferred. (One example would include funds transferred to the BIA from the Department of Transportation for roads construction.) BIA will use tribal indirect cost rates to determine the amount of CSF to be paid to contracting tribes and tribal organizations and self-governance tribes and tribal consortia. In determining legitimate indirect cost requirements each area and self-governance director should fund only those contracting or compacting tribal organizations that have an approved indirect cost rate or indirect cost proposal currently under consideration by the Office of Inspector General. In those instances where a tribe or tribal organization has more than one approved rate or a current proposal under consideration by the Office of the Inspector General, the director should use the most current rate or a pending proposal in determining the amount to award. For those tribes who are unable to negotiate an indirect cost rate because of circumstances beyond their control (i.e., which do not have the administrative capability to negotiate a rate), awarding officials may negotiate reasonable lump sum amounts with these tribes.

Indirect Cost Computation

The following steps must be followed by BIA personnel when computing contract support annual funding requirements:

(1) Determine total current year program funds.

(2) Subtract exclusions (See indirect cost agreements). Examples of exclusions include capital expenditures and pass through funds (those programs requiring minimal administrative effort). Exclude other agency appropriations awarded by the BIA (i.e., roads construction funds transferred from the Department of Transportation).

(3) Direct cost base (results of steps 1 and 2).

(4) Multiply indirect cost rates against base determined in step 3.

(5) Results of step 4 equals indirect costs amount at 100 percent.

(6) Multiply current year CSF funding percentage against step 5.

(7) The result of step 6—The amount of current year CSF funding to be added to contract.

Ongoing/Existing Contracts/Annual Funding Agreements—Method of Distribution

Each office will send CSF Needs Report to the Central Office for ongoing contracts and annual funding agreements by July 15, 2002. A final determination of contract support will be made on or about July 31, 2002. If these reports show that $130,209,000 will not be enough to cover the entire need, this amount will be distributed pro rata, so that all contractors and compactors receive the same percentage of their reported need.

Should the amount provided for these existing contracts and annual funding agreements prove insufficient, a tribe or group of tribes may wish to reprogram funds to make up deficiencies necessary to recover full indirect costs. This tribal reprogramming authority is limited to funds from their Tribal Priority Allocation (TPA), or annual funding agreement. Congressional appropriations language does not provide authority for the BIA to reprogram funds from other Bureau programs to meet any CSF shortfalls.

For programs other than TPA, tribes are not constrained from recovering full indirect costs from within the overall program and contract support funds awarded for each program.

Each office should initially award 65 percent of required contract support to each contract/annual funding agreement meeting the criteria established below.

All contractors and self-governance tribes/consortia with either an approved indirect cost rate, current indirect cost proposal, or FY 2002 approved lump sum amount, are immediately eligible to be paid 65 percent of their need. On approximately July 31, 2002, all contractors and self-governance tribes/consortia should receive their pro rata share of all remaining CSF.

An ongoing/existing contract or annual funding agreement is defined as a BIA program operated by the tribal contractor or compactor on an ongoing basis which has been entered into before the current fiscal year. An increase or decrease in funding from year-to-year for such contracts or annual funding agreements would not affect the designation of such contracts or annual funding agreements as ongoing. An assumption of additional BIA program responsibilities would be required to trigger a change in designation.

Indian Self-Determination Fund—New and Expanded Contracts/Compacts and Start-Up Costs

Each office will send CSF Need Reports to the Central Office for new and expanded contracts and annual funding agreements periodically throughout the year as new contracts or annual funding agreements are awarded or existing contracts or annual funding agreements are expanded. Funds will be provided to the offices as these reports are received and will be taken from the $3,000,000. These funds will be distributed on a first-come, first-served basis at 100 percent of need using the office reports.

If the $3,000,000 is depleted, new or expanded contracts or annual funding agreements awarded after this fund has been exhausted will not be provided any CSF during this fiscal year. Requests received after this fund has been exhausted will be considered first for funding in the following year, from funds appropriated for this purpose.

The Indian Self-Determination Act defines the term start-up cost (Sec. 106(a)(5)) as follows:

Subject to paragraph (6) of section 106, during the initial year that a self-determination contract is in effect, the amount required to be paid under paragraph (2) will include start-up costs consisting of the reasonable costs that have been incurred or will be incurred on a onetime basis under the contract necessary to:

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

(b) Ensure compliance with the terms of the contract and prudent management.

For specific guidance, including examples of start-up costs, see the BIA web site under Tribal Services/Self-Determination Services.

Priority of Funding for New and Expanded Contracts/Annual Funding Agreements

Contract support will be awarded from the ISD fund to all new and expanded contracts/annual funding agreements based on the start date of the award, and the application date, on a first-come, first-served basis. An Indian Self-Determination Fund “applicant roster” will be maintained, which will list, in order of priority, the name of the tribe or tribal organization, the name of the program, the start date, the application date, the amount of program funds, the program cost code(s), the amount of contract support funds required, and the date of approved indirect cost rate agreement or lump sum agreement.

“Start date” means the date or beginning of operation of the new or expanded portion of the contract or annual funding agreement by the tribe/consortium or tribal organization. However, because the Self-Determination Act provides that contracts/annual funding agreements will be on a calendar year basis unless otherwise provided by the tribe, any start date on or before January 1 of each year will be considered a January 1 start date.

“Application date” means the date of the request by the tribe, which includes:

(1) A tribal resolution requesting a contract or annual funding agreement;

(2) A summary of the program or portion of that to be operated by the tribe/consortium or tribal organization; and

(3) A summary identifying the source and amount of program or services funds to contracted or included in an annual funding agreement and contract support requirements.

If two tribes or tribal organizations have the same start date and application date, the next date for determination of priority will be the date the fully complete application was received by the BIA.

If all are equal, and if funds remaining in the ISD fund are not enough to fill the entire amount of each award's contract support requirement, then each will be awarded a proportionate share of its requirement and will remain on the Indian Self-Determination Fund roster in appropriate order of priority for future distributions.

New contract/annual funding agreement is defined as the initial transfer of a program, previously operated by the BIA to the tribe/consortium or tribal organization.

An expanded contract/annual funding agreement is defined as a contract/annual funding agreement which has become enlarged, during the current fiscal year through the assumption of additional programs previously performed by the BIA.

Criteria for Determining CSF Need for Ongoing/Existing Contracts/Annual Funding Agreements

CSF for ongoing and existing contracts/annual funding agreements will be determined using the following criteria:

(1) All TPA contracted programs or those programs included in annual funding agreements in FY 2001 and continued in FY 2002, including contracted or annual funding agreement programs moved to TPA in FY 2002.

(2) Direct program funding increases due to inflation adjustments and general budget increases.

(3) TPA programs started or expanded in FY 2002 that are a result of a change in priorities from other already contracted/annual funding agreement programs.

(4) CSF differentials associated with tribally-operated schools that receive indirect costs through the application of the administrative cost grant formula. These differentials are to be calculated by using the criteria prescribed in the Choctaw decision dated September 18, 1992, issued by the Contracting Officer, Eastern Area Office. Copies of this decision can be obtained by calling the telephone number provided in this announcement.

(5) CSF will be distributed to the Office of Self-Governance for ongoing annual funding agreements, on the same basis as regional offices.

(6) Funds available for Indian Child Welfare Act (ICWA) programs or reprogrammed from ICWA to other programs will be considered ongoing for payment of contract support costs.

(7) The use of CSF to pay prior year shortfalls is not authorized.

(8) Programs funded from sources other than those listed above that were awarded in FY 2001 and are to be awarded in FY 2002 are considered as ongoing.

This notice is published under the authority delegated by the Secretary of the Interior to the Assistant Secretary—Indian Affairs by 209 Departmental Manual 8.1.

Dated: December 19, 2001.

Neal A. McCaleb,

Assistant Secretary—Indian Affairs.