Court Says Equitable Tolling Does Apply in ISDA Contract Support Cost Dispute

In a contract support claim against the Indian Health Service, the Civilian Board of Contract Appeals’ dismissal of several plaintiffs’ contract claims was affirmed in part and reversed in part by the U.S. Court of Appeals Federal Circuit yesterday. The case involved Arctic Slope Native Association; Confederated Tribes of Coos, Lower Umpqua, and Siuslaw Indians and the Metlakatla Indian Community.

The Civilian Board of Contract Appeals had dismissed the claims against the IHS on the ground that the appellants had failed to present them to a contracting officer within six years after the claims accrued, as required by section 605(a) the Contract Disputes Act (“CDA”), 41 U.S.C. § 605(a).

The plaintiffs argued that the CDA’s six-year presentment period was subject to equitable tolling. They pointed out that the Supreme Court had delayed all pending contract support litigation while it considered Cherokee Nation v. Leavitt, and that the statute of limitations should not apply to those cases. The Board of Contract Appeals held that the CDA’s presentment period is a jurisdictional requirement that is not subject to tolling, either equitable or legal.

The court held that the six-year presentment period is (emphasis added) subject to equitable tolling and remanded the case to the board to determine whether it satisfies the requirements of the equitable tolling doctrine.

For more information contact richard.phelps@falmouthinstitute.com

Indirect Cost Alert – ARRA Awards do Include Overhead Costs

There has been some confusion over the ability of tribes to collect indirect costs from funding received under the American Recovery and Reinvestment Act (ARRA). Contrary to previous statements made to tribal leaders, overhead costs may be covered with ARRA funds. Even though the contract support costs will not be added onto the ARRA awards, tribes can apply their approved IDC rate to these funds to determine how much of the money can be allocated for overhead. However, if you receive ARRA funding through an existing or new program which places a cap on indirect costs, then the cap will still apply.

Here is a link to a document from Health and Human Services that might prove helpful. For more information, contact Richard Phelps, 1-800-992-4489, extension 101.

Indirect Cost Rates and the Stimulus Funds

Increased funding from the Indian Health Service and the Bureau of Indian Affairs, together with the inflow of money from the stimulus package, could mean that for the first time in decades, tribal governments may be able to recover the total amount of the costs associated with the administration of federal programs under P.L. 93-638 contracts. 

The Indian Health Service is slated for a 13 percent increase in funding to cover contract support costs and the Bureau of Indian Affairs will receive a significant increase in funding for this item as well. These budget increases and the increased availability of federal funds from the stimulus package, present tribal governments with a tremendous opportunity and challenge.

An inflow of funds from the stimulus bill could expand the funding base for tribes significantly, thereby driving down the indirect cost rate by as much as 30 to 40 percent.  While increased funding is a great development for Indian Country, the consequences of a reduced indirect cost rate could be quite negative unless the additional overhead costs of administering these new programs are taken into consideration.

Each organization should be conducting an analysis as to how much of the stimulus funding is being devoted to construction as opposed to services. As a general rule construction funds carry a reduced amount of overhead burden, because much of the work is contracted out. This might not be the case if the tribe has its own construction company. In that case the indirect costs associated with the project can be high as the general contractor (the tribe) must incur the same overhead as other contractors.

For more information on indirect costs and how the stimulus package may impact your rate, contact Richard Phelps.

CBCA Rules on Indirect Cost Disputes

The Civilian Board of Contract Appeals in July ruled on claims submitted by tribal governments or Alaska Native villages with awards under the Indian Self Determination Act. A number of these claims were dismissed because the statute of limitations had run out, but in the claims that were not dismissed, the main issue focused on t he payment of contract support from the Indian Health Service. The board ruled that the IHS must demonstrate that it has actually paid the full amount of ISD contract support dollars allocated to it by Congress for the years in questions. If the IHS cannot document that it has paid the full allocation, then the tribes will have a claim against the agency.

NBC Will Drop Challenge to Council Expenses, for Now

The National Business Center will not challenge the inclusion of expenses related to the tribal council as part of indirect cost negotiations. Previously the NBC had said it would only agree to those council expenses that can be documented and that are allowable in OMB Circular A-87 (see section 19), which meant it would not allow council stipends and salaries. However, according to an August 26 letter from James Cason, of the Department of Interior, Interior will defer implementation of that provision until 2010. In the meantime, Interior will be consulting with tribal governments on the provision and will be consulting with legal experts on the applicability of OMB Circular A-87 to tribal governments.

Listen and Learn: Multiple Indirect Cost Rates

In the May issue of American Indian Report, Falmouth CEO Richard Phelps offers a brief overview of multiple indirect cost rates.

EPA Questions $1.7 Million in Indirect Costs Charged by Grantee

In a just released audit report, the United States Environmental Protection Agency has questioned $1.7 million in indirect costs charged by a non profit grantee. The report recommends that the EPA disallow all the indirect costs charged as the grantee had no approved indirect cost agreement in place. The report also states that the organization used an inequitable method for allocating indirect costs to various EPA awards. We are aware that the EPA has been warning grantees without approved IDC agreements not to charge indirect cost to their EPA grants.