Free Motion to Dismiss - Rule 12(b)(1) - District Court of Federal Claims - federal

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ALASKA TRIBAL HEALTH COMPACT
BETWEEN

CERTAIN ALASKA NATIVE TRIBES
AND T~

U~rs~ S~:A~S O~ A_~mCA
OCTOBER 1, 1994

AMENDED AND.RESTATED

OCTOBER 1, 1996

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PAGE

BI~I~TOL BAY ~ ~[EALT~[ COI~POI~kTION on Behalf of Itself and Cer£~%~ Ai~ske i~at~ve 'q~z'ibes, Identified in ExhiBiZ A

Sally
l~r~sident

DATE:

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i~ 'dUN ~ 0 Igg6
"~e~ ~ ." ~

CEKTAI~ ~S~ NATI~ TRIBES IN T~ ...... "'" BRISTOL BAY ~ THE SEC~T~Y OF H~TH ~ ~. SERVICES OCTOBER i, 1996
This ~ual ~nding Agreement is entered into by and between certaim Alaska tribes in the Bristol Bay regi6n a~ identified on the signature page herein and the .Secreta~ of the Degartment of Healt~ and H~an Services. ~. Th~S~, tribes have authorized the 9ristol 9ay Area Health co~oration 'to sign this , ~ua! Funding Agreement for them and to be responsible for and ear~ing out the te~s of this ~ual Funding Agreement. Seotio~ I - O~l~gat~o~s of t~e IHS. This ~ual Agreement¯ ( "Agreement" ) obligates ¯ the" Indian ~ Health ¯ Servi~e-. to. provide funding and services identified herei~ and as provided the Alaska Tribal Health Compact ("Compact") between the Bristol Bay Area-Health~..Co~oration (BBAHC) a~ G@;taln other Co~Signe~s thereof and the United States in Fisca! Year A Memorandum of Understanding regarding Continuing. Services Plan Transition will be executed on or before September 30, 1996 among the Co-Signers and the IHS Area Office to reflect the understanding of the parties regarding transition of services. In addition, although funds are provided from Headquarters and Area Office in support of this Compact, the Indian Health Service will agree . to continue to make available tO this'..Co-Signer .services, activities, functions and programs from both Area Office and Headquarters unless I00~ of the total tribal shares for these services, activities, functions and programs have been specifically ~included in thisAgreement. In cases where a portion of a triba! share is provided there may be some diminishment of the level of services, activities, functions and programs"~p~bvided by IHS. Furthermore, the Indian HealthService wil~ reorganize both Headquarters and the Area Office to. continue to provide the remainin~ functions which have not bee~ included ~n this Agreement in the most effective and efficient mariner possible, provided that decisions about the array and level of services, activities, functions and programs to be offered by the Indian Health Service shall be made in consultation with Alaska Tribes. The Indian Health Service programs, services, functions, and activities not negotiated into or listed in Appendices A and B will be the responsibility of the Indian Health Service. -BRISTOL BAY AREA HEALTH CORPORATION ANNUAL FUI~DING- AGREEMENT OCTOBER I, 1996 - PAGE 1

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ALASKA TRIBAL HEALTH

COMPACT
B ETW BEN

CERTAIN AI~ASI(A NATIVE TRIBES
AND "1"1-1 E

UNITED STATES OP" AM.ER.ICA

-OCTOBER 1, 1994

AMENDED AND RESTATED

OCTOBER 1, 1997

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ALASKA TRIBAL HEALTH COMPACT - OCTOBER 1, 1997

PAGE

UNITED STATES OF AMERICA SECRETARY OF DEPARTMENT OFHEALTH AND I-IUMAN SERVICES

DfRECTOR, IN"fAN HEALTH Sg~rICE

DATE:.

AUB 2 6 1991'

BRISTOL BAY AREA HEALTH -CORPORATION On Behalf ofItself and Certain Alaska Native Tribes, Identified in Exhibit A. H:SALLY S~ICH -CHAIRMAN DATE: .~

ROBERT J. C~RK CHIEF EXECUTIVE OFFICER DATE:

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ANNUAL -FUNDING AGREEMENT BETWEEN CERTAIN ~KA NATIVE TRIBES IN THE BRISTOL BAY ARF~ REGION AND THE SECRETARY OF HEALTH AND HUMAN SERVICES ' OCTOBER 1, 1997 This Annual Funding Agreement is entered into by and between certain Alaska tribes in the Bristol Bay region as identified on the signature page herein and the Secretary of the Department of Health and Human Services. These tribes have authorized the Bristol Bay Area Health Corporation to sig~ this Annual Funding Agree~nent for them and to be responsible for and carrying out the terms of this Annual Funding Agreement. Section 1' Obligations of the IHS. This A_uaual Funding Agreement ("Agreement") obligates the Indiin Health Service to provide funding and services identified herein and as provided in the Alaska T~ibal Health Compact ("Compact") between the Bristol Bay Area Health Corporation ~BBAHC) an~l certain other Co' Signers thereof and the United States in Fiscal Year 1998.
.A 'lV!emorandum of Understanding regarding Con~_auing Services Plan for the Area Office of the Alaska Native Health Service for FY98" among the Co-Signers and the Alaska Area Native Health Sexwice to reflect the understanding of the parses !'egardiag services, ' attached as Appendix E, is hereby incorporated by reference. In addition, although ~nds are provided from Headquarters and Area Office in support of this Compact, the Indian Health Se~ce will agree to continue to make available to tl-is Co-Signer services, activities, functions and progran~, s from both _Area Office an~l Headquarters unless I00.% of the total tribal shares for these services,, activities, functions and programs have been specifically included in this Agreement. iu cases where a po~ion of a tr.[bal share is provided there may be some dininishmen.t...of the level of services, activities, functions and programs provided by IHS. Furthermore, the Indian Health Service will reorganize both Headquarters and ~he Area O~ce to continue to provide the remaining functions which have not been included in-this Agreement in the most effective and.efficient manne~' possible, provided that d~cisions about the an'ay andlevel of services, activities, functions and programs to be offered by the Indian Health Service shall be made in consultation with Alaska Tribes. The Indian Health Service programs, services, functions, and activities not negotiated into this agreement or listed in Appendix A will be the responsibility of the ludian Health Service.

ANNUAL FUNDING

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UNITED STATES OF AIVIERICA SECRETARY OF DEPARTNfENT OF ITEALTH AND HUM_AN SERVICES BY: .DIRECTOR DATE.:_ SERVICE

AUGII 1997

BRISTOL BAY AREA HEALTH CORPORATION ON BEHALF OF ITSELF AND CERTAIN ALASI<_A NATIVE TRIBES, IDENT]9"~D IN EXHIBIT A OF TiTE COiVIPACT

P~SIDENT

BY:, ~ CH]]gF EXECUTIVE OFFICER

I~ISTOL BAY' AREA HEALTH L~DEIPORATION ANNUAL FUNDING AGREEMENT OCTOBER 1, 1£97 - PAGE 311

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ANNUAL FUNDING AGREEMENT-- OCTOBER 1, 1994

ANNUAL FUNDING AGREEMENT BETWEEN CERTAIN ALASKA NATIVE TRIBES IN THE BRISTOL BAY AI~A REGION THE SECRETARY OF HEALTH AND HUMAN' SERVICES October 1, 1994 This Annual Funding Agreement is ~ntered into by and between certain Alaska tribes in the Bristol Bay region as identified on the signature page herein. These tribes have authorized the Bristol Bay Area Health Corporation to sign this Annual Funding Agreement for them and to be responsible for and carrying out the terms of this Annual Funding Agreement. ~ Section I - Obligations of the IHS. This Annual Funding Agreement ("Agreement") obligates the Indian Health Service to provide funding and services identified herein and as provided in the Alaska Tribal Health Compact ("Compact") between the Bristol Bay Area Health Corporation and certain other Co-Signers 4hereof and the United States in Fiscal Year 1995. In addition, although funds are provided from Headquarters and Area Office fi~ support of this compact, the Indian Health Service will agree to continue to make available to this Co-Signer. services from both Area Office and Headquarters unless the funding for these services and functions have been specifically included in this Agreement. Furthermore, Inch'an Health Service may reorgarfize both Headquarters and the Area Of~ce to continue to provide the remaining funclons which have not been included in this Agreement in the most effective and efficient manner possible. The Indian Health Service programs, services, functions, and activities, not Degotiated into or l{sted in Attachment I are presumed to be the responsibility of the Indian Health Service. The Alaska Native Medical Center (ANMC) will continue, subject to appropriations available, to provide the services and functions which have historicaD.y been provided to Bristol Bay Area Health Corporation when operating under a Title I P.L. 93-638 contract. This is to include accepting a~ referrals of Alaska Natives from the Kanakanak Hospital; providing specialty care field clinics, consultation to Bristol Bay Area Health Corporation physicians, pathology, radiology, and laboratory

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A~NUAL FUNDING AGREEMENT-- OCTOBER 1, 1994

death and disability from injuries. 11. 12. Audiology provides full scope of audiology services. HaemoDhilus Influenzae t.vpe B(HIB) vaccination program Infant Learning Program Identifies and provides services for children from 0-S who are experiencing developmental difficulties Other programs/services funded on non-recurring basis

13.

1. Tobacco Cessation Project 2. Baby Bottle Tooth Decay 3. Tobacco Intervention
D. Other programs/services funded 1. Any new health care program funded during FY95 including, but not limited to programs identified in the Indian Health Care Improvement Act. 2. Any new health care program resulting from the reallocation of funds and redesign of programs during FY95 which will be in accordance with the terms of the Compact. b) The applicability of FTCA shall be pursuant to Article V, Section 3 of the Alaska Tribal Health Compact. Section 4 - Announts available in Fiscal Year 1995. a) The follow~ng amohnts are available to the Bristol Bay Area Health Corporation pursuant to the Compact and Title III of the Indian Self Determiuation and Education Assistance Act, as amended, and are subject to reductions only in accordance with Section I06 of that Act during the term of this Annual Fundflug Agreement. 1. Recurring base: $15,217,160 (thru modification #71, FY 94) 2. Non-recurring funds: $540,278 (fihru modification #7t, FY 94)

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ANNUAL FUNDING AGREEMENT-- OCTOBER 1, 1994

3. Alaska Area Tribal Shares (subject to Annual Intertribal reallocation): $343,714 4. Special Funds: (Program formula pending August negotiations~ 5. H-IS Headquarters Tribal Shares: headquarters active user pool $284,728 These amounts are subject to additions for new funds received during the term ofth~s Agreement. b) Subject to Congressional appropriation, an additional lump sum amount sha~ be added to this Agreement for the Bristol ]~ay Area Health Corporation under ISDIV[ 92-2 or its successor. The amount shall be based upon the Bristol Bay Area Health Corporation's indirect cost agreement and applicable law and wil! be added to this Agreement as soon as available through appropriations, indirect costs shall be negotiated for this Annual Funding Agreement in compliance with Section 106 (d)(~) and 106(e) of the Indian Self-Deternination and Education Act, as amended. I. Ind~ect!contract support funds: $590,428

(c) An additional lump sum of funds iu an amount to be negotiated pursuant to Article 5, Section 12 may be provided to the Bristol Bay Area Health Corporation by the Indian Health Service to assist in defraying star,up costs. (pendiug negotiations) I. Startup funds: (pending August, 1994 negotiations)

(d) We agree that the amount reflected in the Annual Funding Agreement is a portion of the full tribal share for the Area as negotiated. We agree to continue negotiations to define the maximum amount available to fund tbAs Annual Funding Agreement in FY95. (e) We agree that the amount reflected in this Annual Funding Agreement for the Indian Health Service (IHS) Headquarters tribal share is a portion of the full tribal share. It does not reflect any amount based on program'fo~mula calculation or the final user population. We agree to continue negotiations to define the appropriate methodology to determine the maximum amount available to fund tiffs Annual Funding Agreement Lu FY95. Section 5 - 1VIethod of Payment. As allowed by federal apportionment

7

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ADDENDUM TO ........................ ANNUAL FUNDING AGREEMENT ............. .... BETWEEN CERTAIN ALASKA NATIVE TRIBES SERVED BY THE BRISTOL BAY AREA HEALTH CORPORATION AND THE SECRETARY OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES October 1, 1994 This Addendum is intended to amend the Annual Funding Agreement which was entered into by and between certain Alaska Tribes in the Bristol B~y region and the Secretary df the Department of Health and Human Services on June 22, 1994. These Tribes have authorized the Bristol Bay Area Health Corporation to sign the Annual Funding Agreement to be responsible for carrying out the terms of this Agreement_ The following provisions of the Annual Funding Agreement shall be amended as fot!ows:
Section 1 1) The second paragraph of Section 1 shall be replaced with the following paragraph:

In addition, although funds are provided from Headquarters and Area Office in Support of this Compact, the Indian Health Service wilI agree m continue to makd available to this Co-Signer services, activities, .functions and programs from both Area Office and Headquarters unless 100% of the total tcibal shares for these services, activities, functions and programs have been specifically included in this Agreement. In cases where a portion of a tribal share is provided there may be some dirninishment of the level of services, activities, functions and programs provided by 12-IS. Furthermore, the Indian Health Service may reorganize both Headquarters and the Area Office to continue to provide the remaining functions which have not been included in this Agreement in the most effective and efficient manner possible, provided that decisions about the array and IeveI of services, activities, functions and programs to be offered by the Indian Health Service shal! be made in consultation with Alaska Tribes. The Indian Health Service programs, services, functions, and activities not negotiated into or listed in Appendix A are presumed to be the responsibility of the Indian Health Service.
BRISTOL BAY AREA HEALTH CORPORATION
ADDENDUM TO ANNUAL FUNDING AGREEMENT OCTOBER I, 1994 - PAGE 1

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2)

The following provision shall replace the provision presently set forth in Section 4(b):

(b) Indirect/Contract Support amounts shah be included in this Agreement, subject to Cong-J:essional appropriation under ISDM 92-2 or its successor. The amount shall be based upon BristoI Bay Area Health Corporation's indirect cost agreement and applicable taw and sha~ be added to this Agreement as soon as available through appropriations. Indirect costs shall be negotiated for this Annual Funding Agreement in compliance with section 106(d)(1) and 106(e) of the Indian Self-Determination and Education Assistance Act, as amended. The Indirect!Contract Support amount shall be : $ 787,396.4 3) The foliowing provision shall be substituted for the provision presently set forth in

Section 4(c):
(c) An additional lump sum of funds in an amount m be: negotiated pursuant to Article V, Section 12 of the Alaska Tribal Health Compact and in accordance with .procedures in ISDM 92-2 may be provided to the Bristol Bay Area Health Corporation by the Indian Health Service to assist in defraying startup costs. The Bristol Bay Area Health Corporation has estimated its start-up costs as: $350,000.

4)

The following provision shall replace Section 4(d):

(d) The funds from Headquarters provided under this Agreement have been negotiated using :the same residual and categorical line-item assumptions ufiliz~ in F'f 94. The parties have agreed to review the determination of Headquarters residual resources and agree that the funds provided based upon residual may change in FY 96.

5)

Section 4(e) shall be replaced with the following provision:

(e) The amounts available from Area for tribal shares reflect the transition plan agreed upon by the parties and does not reflect the full amount that will be available in future years.

methodology. The total A_laska Area tribal share was then reallocated to each Co-Signer according to the agreed upon Alaska Area methodology, which is identified speci~cally for each line in Appendix A.

4 This amount is made up of Indirect on B-PIG $52,000, Startup Costs $12I-7,000, High Risk OB $15,330, Alaska Tribal Shares $216,002, and Headquarters Tribal Shares $357,064.
BRISTOL BAY AREA HEALTH CORPORATION ADDENDUM TO ANNUAL ~UNDING AGREEMENT

OCTOBER 1, 1994 - PAGE 3

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DEPARTMENT OF HEALTH AND HUMAN SERVICES Public Health Service .. Indian Health Service Refer to: OTA Rockville, Maryland 20857 INDIAN SELF-DETERMINATION MEMOKANDUM NO. 92-2

CONTRACT SUPPORT.COST POLICY

Sec.

1. Background 2. Purpose 3.. Definitions 4. New and Expanded Contracts 5. Procedure for Computing Amount of Contract Support Costs 6. Ongoing Contracts 7. Subsequent Years Considerations 8. Supersession

~ACKGROUND The development of this,policy is in response to section 106(a) of Public Law 93-638, as amended, the hadian Sel£-Detennination Act, which states: Section 106. (a)(1) '"The amount of funds provided under the terms of selfdetem~.ation contracts entered into pursuant to this Act shall not be less than the appropriate Secretary would have otherwise provided for the operation of the program or portions thereof for the period covered by the contract.
(2) There shall be added to the amount required by paragraph (1) contract support costs which shall consist of 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 carded 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."

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INDIAN SELF-DETERMINATION MEMORANDLrM 92-2

.............. establish the Indian Health Service (IHS) policy for 1) identifying amounts ,. To ) required for direct and indirect contract support funds; and 2) allocath~g contract support funds for all Public Law. (P.L.) 93-638 contracts. All funds for contract support costs are subject to the availability of funds made available for this purpose. This policy outlines the procedures to be used to determine the need for contract support costs, and to guide the allocation of these ftmds.

Contract Support Costs are:. Reasonable costs for activities which must be carried on by the Indian tribe or tribal organization as a contractor to ensure compliance with the terms of the contract and prudent management butwhich normally are notcarried on by the Secretaryin his direct operation of the Program, or are provided by the Secretary in support of the program ~om resources other than those under contract; and ¯ osts which are reasonable, necessary and allowable costs of the.contractor, which are C allocable to the contract based on applicable Federal cost principles; and

Costs which are not provided for under the allocation of program funds available for the co,~tract as defined in P.L. 93-638, as amended, Section 106 (a)(1); and D. Treated as either dixect or indixect by the contractor based on applicable cost principles and -the contractor's cost allocation policy.
NEW AND EXPANDED CONTRACTS A. The Indian Self-Determination (ISD) Fund will cover certain costs of P.L. 93638 awards when the award is:

(I) an initial transfer of a program previously operated by the IHS to the tribe or tribal organization, or (2) to expand current tribal operations through the assumption of additional programs previously operated by LEIS, or
(3) to provide initial contract suppon funding for a!! new and expanded 638 contracts, including the assumption of progrsans previously operated by other tribes, tribal organ~ations, Indiau contractors, and for newly recognized tribes. Distribution: PDS 557 Tab D, Tribes, Tribal Organizations

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Page 3

SELF-DETERMINATION MEMORANDUM 92-2

INS will award funds for contract support costs for new and expanded contracts in the following two categories:

(i) Direct Contract Support. Costs:
Non-recurring direct contract support costs are costs which are of a non-recurring nature, are otherwise allowable direct contract support costs, and are required for the program to begin operations. These are also referred to as start up costs, but are not intended to. be an additional cost .category. b. Recurring direct contract supporf costs are costs which are of a recurring nature and associated directly with the Operation of the program..These funds shall be awarded on a recurring basis. (2) Indirect or Indirect Types of Costs: Costs incurred for a common or joint purpose benefitting more than one contract objective, or which are not .readily assignable to the contract objectives specifically benefitted without effort disproportionate to the results achieved, and which are not funded by other direct costs, and are incorporated in the Indian tribe's or tribal organization's indirect costs rehnbursement procedure as negotiated annually with the cognizant Federal agency. For contractors without negotiated indirect cost rotes, indirect-type costs consist of costs wlfich are normally fom~d in indirect cost pools of contractors with.rates, and which are negotiated between the contractor and the Area Office using principles of reasonableness, alJowabflity and allocability (see attachment A).

These funds shall be awarded "non-recurring" subject to negotiation in each subsequent year. Those conl~actorswith a surplus of indirect cost support funds wiB not be allocated additional funds until the need is indicated by the most current negotiated indirect cost rate. (See page 7, Section 6, for spe.cial procedures for contracts that have received indirect cost funds as recurring funds). The following illustrations Show: i) total funding for the first year of the contract, and 2) contract costs for subsequent years. Totat funding for first year of the contract
Program Funding Base
( I IK~ a)( 1 ) ,~mount)

Direct Contract Support Costs
(Recurring)

Indirect Contract Support costs
(n~n-r~currlng)

Contract support costs provided from ISD .fund

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Contract Costs for Subsequent Years

Direct Costs

Receive mandatory increases

Indirect Costs
(non-r~corrlng)

Recomputed each year

(3) In subsequent years, direct contract support funds wit1 be considered part.of the recurring
base of the contract, and will receive mandatory cost increases as do the direct program funds. Amount of indirect contract support ftmds must be justified each year based on negotiated amounts and any shortfalls are reported to IHS Headquarters for inclusion in the An.nuN Report to Congress on implementation of P.L. 93-638.

c. (1) Funds for new and expanded contracts wii1 be allocated by IHS Headquarters from the
ISD fund on a monflfly basis until expended. If pemfitted by appropriations act, any funds that remain at the end of the fiscal year will be added to any ISD Funds av~aiiable in flae subsequent year. If funds are exhausted at any point in the fisc!l year, requests received thereafter will be considered first for funding in the subsequent year from funds appropriated for this purpose.

(2) Area Offices w~ make requests after receiving proposals for new .and expanded contracts. Areas are encouraged to begin discussions with the proposing tribe or tribal organization early to identify the amount of need for contract support costs ¯ . according to pmcedu.res detailed in Section 5 of this policy.
Once the amount of need has been identified, and before the end of the 60-day Proposal review period, a request for this amount wil! be submitted to flae IHS Office of Tribal Activities, Division of Self-Determination Services to determhae ff funds are available for thLs purpose. The Office of Tribal Activities will respond immediately to advise ff the funds are available.

While a CSC need ~nay be requested which is greater than the amount determined to be available, the available amount wi!l be the basis for consideration Of approval or declination of proposals, aud any subsequent award. Deficiencies for existing contracts will be included in the am~ual report to Congress required by Section 106(c) ot the Act.

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INDIAN SELP-DETER~ATION.MEMORANDUM 92-2

Page

(3) The requested amount will be the total of indirect and direct contract support costs for each project. (4) If funds from the ISD Fund are inadequate to fully fund all requests, then requests to be funded that month will be selected based on the earliest receipt date.

5. PROCEDURE FOR COMPUTING AMOUNT OF CONTRACT SUPPORT COSTS
A. Direct Contract Support Costs For new and expanded contracts, Area Offices will identify the amount needed for direct contract support costs in accordance with the following: A detailed budget will be prepared for first-time contractors (new and expanded) detailing amounts to be considered as direct program funds, indirect and indirect type contract support costs, and direct contract support costs.

The amount of recurring direct contract support cost~ will be determined by negotiation between the recipient and the Area Office (see definitions section for direct contract support costs), Qnly categories of cost, which are not contained in either the indirect cosl pool or the amount computed pursuant to Section !06(a~(1) can be considered as direct ~gntract suvport costs. The Area Offices and recipients must agree on the mnount of direct contract support costs which wili be recurring in future years.
¯"Recurring" dixect contract support costs which may not 1~ in a conttactor:s indirect cost .pool are: ..... ~ .Unemployment tax on direct program salaries. .,.: "- .. .Workers compensation insurance on direct progiam salaries. ,Cost of retirement and other fringe benefits for direct program personnel in excess of amount.funded within P.L. 93-638, as amended, Section 106 (a)(1). ¯Long distance telephone charges. .Postage allocable to direct programs. .Discipline specific training for direct program personnel not funded in the ¯106 (a)(i) amount.

The Area Office will also work with the contractor to identify non-recurring direct contract support costs necessary as one time start up costs. These must be required to beg..in operations. They are not intended to be a program enhancement, and cannot be items of cost included in the 106(a)(1) amount. Examples may include the following:

Distribution: PDS 557 Tab D, Tribes, Tribal Organizations

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INDLAN SELF-DETER.MLNA'lqON M~EMORANDUM 92-2

¯Purchase of computer hardware and software. ¯Required training and staff development. .Systems development. ¯Equipment and furniture. Items listed above as examples of recurring and non-recurring direct contract support costs must be justified as such and negotiated with the Area Office. Items not included as examples above, but requested and justified by contractors shall be submitted by the Area Office to lq-IS Headquarters, Division of Self-Determination Services, for approval. This will contribute to greater consistency from Area to Area. A single item of cost to be funded shall not be accounted for both in the computation of direct costs, n,ld also in the computation of indirect or indlrect-type costs. However, a type of cost may be either direct or indirect depending on the level or function of the organization to which it applies. The Area Office shall ensure that costs are reasonable, necessary, and not dhpiicative.

To the extent thai the Area Office and the contractor cannot agree on an item(s) of cost, the disputed items shall be submitted to the Director, LHS, through the iiis Office of Tribal Activitie.s, Division of Self-Detemfi.nation Services. The following is a description of the methodology to be used in computing the amount required for indirect contract support costs.

B. Jaldirect or Indirect Type Costs For all contractors, Area Offices will identify the amount required for indirect.costs of awards (12 months of operation) for each contract as follows:
(1) Recipients with Established Indirect Cost Rates

The amount of indirect costs expected to be incurred under awards by recipients with rates which have been negotiated or are being neg.otiated with the cognizant Federal agency will be deterrnined by applying the negotiated rate(s) to the direct cost base amount for tiffs purpose.
(2) Recipients without Established Indirect Cost Rates Indirect types of costs may be computed by negotiating amounts for the following examples of "indirect-types of costs" listed on the following page. These examples are those most commonly found in the indirect cost pools of recipients with rates.. The total amount negotiated for these items wilI be considered as the recipient's indirect cost for purposes of fltis allocation procedure.

Distribution: PDS 557 Tab D, Tribes, Tribal Organizations

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INDIAN SELF-DETERMINATION MEMOKANDUM 92-2

C~_neyal Set'rico ~nd F_,xt~nsea Imunmee and Borodin8 Legal Services Audit Gnneml Support Services

Guidelines for the Principles involved in Negotiating indirect Cosis A plan for allocation of indirect costs will be required to support the distribution of any indirect costs related to the contracted program. All indirect costs included in the plan will be supported by accounting records which will substantiate the propriety.of the indirect co~ts. The a~ocation plan should cover all indirect costs of the contractor, and contain, but not necessarily be lhnited to 1) the nature and extent of se.rvices provided and their relevance to the contracted program, 2) the items Of expense to be included in the .indirect cost pool, and 3) the methods to be used in distributing cost. The Office of Management and Budget (OMB), Circular No. A-87, Cost Principles for ¯ State and Local Govemments~ establishes principles and standards for detemlining indirect costs applicable to contractors (local governments and federally recognized Indian tribal governments), Further, the circular discusses allowable and unallowable indirect costs.

The amount of indirect contract support funds representing the previous year's base will be distributed to Areas "recurring" to fund each Area'%'~direet cost need..~: ..~_.~.~ ..~,..-L=~..-~., . - Each.contr.actar.'s need for indirect contract support shall be deterrrfined by calculating change~,"~f."a~ty;.m redirect cost rates, bases, and pools..If funds available in the Area's indirect cost base are not adequate to meet total requirements, then the amount available shall be distributed according 1o each contractor's proportion of total need. These funds will be ~warded to the contractor ~ ~aon-r.e~urring funcls. (See 4.A(3)for treatment 0f direct contract support costs.) Each year, Areas are required to report additional needs for indirect contract support funds beyond the amount provided in their previous year's recurring base, or any surplus of funds provided in their recurring base based on.current year needs.

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INDIAN SELF:DETEtLMINATION MEMORANDUM 92-2

Transition Period So~ne Area~ha.vc..pr.e~:i~:~!y "..~.!ecated ~,~,~a-,,ot ,-,~,~tr, ct ._~_.,..trp. Oft .fimds as re.cutting funds to _cgn.tr__a.e.t_or~....~p.w.ev.~r..,- ~a..e2u_rt?.o_2_e.. of_t)~_p.0!!~y_..~ to establish a uniform allocation process for indirect contract support funds, and Wii! result in ~i~se r-tih~ts-b~iiq~ gll6catetl ~ nonrecurring funds to contractors Agency wide. It is not intended for Areas to reduce contract amounts of indirect contract support fun~l~ previously allocated as recurring funds without the approval of the contractor, Those contractors with a surplus of indirect contract support funds will not be allocated additional indirect contr'act support funds until tlieir most current negotiated indirect cost rate indicates an additional requirement for these funds. Mandatory.increases for self-determination contracts should be provided only on the recurring base amount (exclud.tng indirect contract support) since actual needs will be negotiated each year for the indirect cost amounts. 7. ~UBSEOUENT YEARS CONSIDERATIONS

A. Areas shall maintaina histo.rical record of funds awarded in each of the fo!lowing categories:
a) direct program funds b) direct contract suppon funds c) .indirect cost funding d) indirect-type cost funding Federal indirect cost negotiators should be requested to higlflight changes, if any, in the contractor's annual cost allocation plan (treatment of items of cost) a~ an exh2bit to the negotiated indirect cost agreement. c.C0ntractors and Area Offices must re-negotiate the contractors indirect type cost budget annually if fl~e contractor does not have a formal n.egofiated indirect cost rate.

D.The same cost allocation rules applying to those contractors with formally negotiated hadirect cost agreements will be applicable to those contractors wifl~out fon'nally negotiated indirect cost rates.
SUPERSESSION This issuance supercedes any policies or instructions previously issued regarding the aI.location of Contract Support Funds.

/4._.l~r~ff R ."Rlio a~te s, M.D.' Assistant Surgeon General Director
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INDIAN SELF-DETERMINATION MEMORANDUM 92-2

ATrA CHMENT A P~NCIPLES OF REASONABLENESS, ALLOWABILITY AND ALLOCABIL~Y

~EASONABLE COSTS
A cost is reasonable ifi in its nature or amount, it does not exceed that which would be incurred b.y a prudent person under the circumstances prevail~g~ at the time the decision was made to incur the cost. The question of the reasonabieness of specmc costs must be scrutinized with particular care in connection with contractors or separate progrmns thereof which receive the preponderance of their support from awards made by Federal agencies. In deterrnhaing the reasonableness of a given cost, consideration shall be given to:

a. Whether the cost is of a type generally recognized as ordinary.and necessary for the operation of the contractor dr the performance of the contract. b. The.restraints or requirements imposed by such factors as generally accepted sound business practices, arms length bargahfi.ng, Federal mad State laws and regulations, and terms and conditions of the contract.
Co

Whether the individuals concerned acted with prudence in the circumstances, considering their responsibilities to the contractor, its members, employees, and clients, and the Government. Significant deviations from the established practices of the contractor which may unjustifiably increase the contract costs.

ALLOCABLE COSTS A cost is allocable to a particular cost objective in accordance with the relative benefits received. A cost is allocable to a contractor ff it is treated consistently with other costs incurred for the same purpose h~ Like circumstances and ff it:

1) Is incurred specifically for the contract. 2) Benefits both the contract and other work and can .be distributed in reasonable proportion to the benefits received. 3) Is necessary to the overall operation of the contract, although a direct relationship to any par!.icutar cost objective cannot be shown.
Any cost allocable to a particular contract or other cost objective Under these principles may not be shifted to other Federal contracts to overcome funding deficiencies, or to avoid restrictions imposed by law or by the term~ of the contract.

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EXHIBIT D

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1 2

Parry Grover Ted Wellman D_A_V~ W~IGHT TREMAINE 550 W. 7th Ave., Suite 1450 Anchorage; Al~ska 99501 (907) 257-5300
Local Counsel for Bristol Bay Amea ~ealth Corporation, and Southeast Alaska Regional Health Corporation

Douglas Pope POPE & YJiTCHER 421 W. ist Ave., Suite 220 Anchorage, Alaska 99~01 (907) 272-8577
Local counsel for Maniilaq Association

5 6 7 8

Jerry C. Straus Geoffrey D. Strommer HOBBS, STRAUS, DEAN & W~_LKER 0225 SW Montgomery St., Ste. I0 Portland, Oregon 97201 (503) 242-1745
Counsel for Bristol Bay ltr~a Health Corporation, Southeast2ilaska Regional Health Corporation, and M~niilaq Assmciation

JUL 07 1995 UNI'fI~I) sr~iS"k'lllOT

IO

~2

IN THE ~ITED STATES DISTRICT COURT FOR ~HE DISTRICT OF/LLAS~ BRISTO~ BAY AREA HEALTH CORPO~LATION, ~9 5 an Alaska corporation; SOUTHE3iST ~iJ~SKAB/~GION~ HEALTH CORPOB3&TION, Case No. A95an Alaska corporation; and ~IILAQ' ASSOCIATION, an Alaska corporation; Plaintiffs, DO~ E. S~, Secretary of Health mnd Human Services, and DR. MIC~L TKUJILLO, Director of Indian Health Service, the DEP~T~NT OF ~TH~ ~ SERVICES, ~nd the I~I~N H~TH SERVICE, Defendants.

(CIV) (

)

17 18

21 22

COMP~INT

2#

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DESCRIPTION OF ACTION I. This is an action for breach of contract and to.compel 3 the Secretary of the Department of Health and Human Services (DHHS) and the Director of the Indian Health Service (iHS) to pay 5 the Plaintiffs Bristol Bay Area Health Corporation (BBAHC), Southeas~ Alaska Regional Health Consortium~ (SEAKHC) and 7 8 9 Maniilaq Association (Maniilaq) funds and interest on such funds which are due and owing under the termS'of the A~aska Tribal Health Compact (Compact) and Annual Fundin~ Agreements (/~As) negotiated thereunder. The Plaintiffs and the Secretary of DHKS 11 negotiated and signed the Compact and AFAs in June and September o5 1994. In the Compact and'AFAs the Plaintiffs aq~eed to assume certain responsibilities Zor the delivery of health care to Alaska Nitives and American indians located in their respective qeograpMic areas and the Secretary agreed to transfer e sum ~7 certain to carry out those responsibilities to the Plaintiffs. The Plaintiffs have assumed all of the responsibilities set out in the Compact and AFAs,.but the Secretary has failed to pay the ~0 amounts due and owing under the Compact and AFAs in accordance with the provisions of those agreements.

2,* 25
in 1994, when the/%laska Tribal Health Co~pact was ne~otia~ed and signed, the Southeast Alask~ Beg±onal Health C~nsoz~ium wa~ called the Southeast A!ask~ Reqlonal Health Corpormtion.

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1 2 3

PAI~TIES 2. Blaintiff B~AHC is a non-profit Alaska corpQration located in Dillingham, Alaska. BBAHC is a Tribal Organization under 25 U.S.C. § 450b(i) which is sanctioned by 32 federally-

5

reco~ized Indian Tribes in the Bristo! Bay ~nd Calista regions to contract and/or compadt with the DHHS to provide health care

7

to Alaska Natives and American Indians located in those regions. 3. Plaintiff Maniilaq is a non-profit Alas~a corporation locate~ in Kotzebue, Alaska. Maniilaq is a Tribal Organization

to iunder 25 U.S.C. § 450b(i) which is sanctioned by 12 federally11 recognized Indian Tribes in the Northwest Arctic Borough and ~2 Point Hope to contract and/or compact with the DPIHS to provide 13 health care services to. Alaska Natives and ~merican Indians 14 located in the Borough and Point Hope. 15 4. Plaintiff SEAKHC is a non-profit Alaska corporation ~7 18 !ocated in Juneau, Alaska. SEARHC is a Tribal Organization under 25 U.S.C ~ 450b(i), which is sanctioned by 19 federally-

19 recognized Indian Tribes in Southeast Alaska to contract and/or 20 compact with the DHHS to provide health care to Alaska Natives 2.1 and Indians located in the region. 5. Defendant Donna E, Shalala is the Secretar~ for the 23 DHI~S. Secretary Shalala is responsible for the overall administration of Title III of the Indian Self-Determination and 25 iEducation and Assistance Act (Title !f! of the ACt), the Tribal COMPLAINT - 3 \41079\I\COM~LAI2. N]~W

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~005

1 2

Self-Governance Demonstration Project Act. P.L. 100-472 as amendld by P.L. 102-184 and P.L. 102-573. 6. Defendant Dr. Michael Trujillo is the Director of the

4 5 6 7 s 9 i0 Ii 12 13

iHS, a division of the DHHS. Dr. Trujillo is responsible for overseeing the implementation oZ Title III of the ~ct dnder the supervisian and direction of Secretary Shala!a. 7. 8. Defendant DHHS is e department of the United States. Defendant IHS is an agency"within the DHHS whic~ is

responsible for overseeing the delivery of health care to eiigible 7t~erican Indians and Alaska Natives in the United States. JUI%ISDICTIONAND VENLTE 9. This Court has jurisdiction under 28 U.S.C. §§ 1331,

16

1361, 1362, and 2201, and as permitted'by election by 25 U.S.C.
15

~ 450m-I and Section 303(d) of Title III qf the Act. Venue is
17 IS 19 20

proper in this Court pursuant to 28 U.S.C. ~ !391(e) . CAUSE OF ACTION The Alaska Tribal Health Compact i0. The indian Self-Determination and Education Assistance Act was enacted by Congress in 1975 and has since been amended on a number of

occlsions. 'Title I of the Act gives Indian Tribes

and Tribal Organizations th~ right to contract with the Department of the Interior (Interior) and DEHS for the operation
~5

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of programs and services provided to American Indians a~dAlaska Natives by those Ageneies~ Under Title I, Interior and DHHS 3 retain a significant amount of oversight and monitoring 4 responsibilities over the programs and services included in 5 Title I. contracts. ii. The Tribal Self-Governance Demonstration Project was 6 7 enacted by Congress in 1988 as Title III of the Act. The Project 8 was designed to give Indian Tribes th~ option of entering into 9 government-to-government agreements (compacts and annual funding I0 agreements (AFAs)) with the Secretary of the Interior for the 11 operation of Interior programs for American Indians and Alaska iz Natives. Participation in the Project offered a number of
13

advantages over contracting under Title I of the Act, including: decreased oversight by the Bureau of Indian Affairs (BTA), the right to assume responsibilities for functions and activities at all levels of the BIA, the right to receive additional funds (commonly refer~ed to as tribal shares) if a Tribe opts to assum~

15
16

18 19 20 2~ 2Z 23 2425

additional responsibilities previously performed by th~ BIA, and the right to receive all funds identified in a compact or AFA in one lump sum payment at the beginning of the fiscal year. Under section 303(a) (9) of the Act,. al! compacts and AFAs are required to be submitted to Congress ninety days i~ advance of the proposed effective date of the agreements for review.

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\ 4 ~079\I\COI~LAI2 .NEW

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12. !n 1991 and 1992, Title III of the Act was amended by Congress. Among other things, the amendments dimected DHHS to implement a Self-Governance Demonstration'Project with selected Tribes and negotiate and enter into compacts and AFAs with such Tribes for the operation of IHS programs for' Alaska Natives and American Indians. 13. On February 25, 1994, the Alaska Native Health Board (ANHB) submitted a proposal under Title III for an All-Alaska Self Governance Compact on behalf of a consortium of Alaska Tribes and Tribal Organizations. The proposal contemplated that there would be one compact in Alaska that all eligible Tribes in the state could sign (either directly or as members of an eligible Trib~l Or.ganization) if they chose to do so. Each compact co-signer Would have. a separate AFA that would spell out the details of the co-signer's relationship with the IHS. For example, the AFA~ would identify the responsibilities that the co-signer would assume and provide for the transfer of funds from the IHS and to the co-signer to perform those responsibilities 14. On March 29, 1994, the IHS approved ~NHB's proposal and on April 4, 1994, ANHB was informed of the approval. Shortly thereafter compact and AFA language negotiations began between potential.co-signers and th~ IHS. Negotiations were completed on June 30, 1994, and the Alaska Tribal Health Compact (Compact) and AFAs were signed by the Director of the IHS and the first two coCOMPLAINT - 6
\41079\I\COMPLAI2.N~W

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~3008

1 Z

signers (BBA~C and Norton sound Health Corporation) on that date and the appropriate documents were submitted to Congress in accordance with Title III. The Compact became effective for the first two co-signers on October I, 1994. The Compact became

S 6 7 8 9 I0 ii 12

effective for the balance of the co-signers (including SEARHC and Maniilaq) on January i, 1995. 15. Article iI, Section 3 of the Compact describes the funding amounts that are to be paid by the Secretar~ to all cosigners as follows: Section 3 -- ~unding Araount. Subject only to the appropriations of funds by the Congress of the United States and to adjustments pursuant to § 106(b) of the Indian SelfDetermination and Education Assistance Act, as amended, the Secretary shall provide [each co-signer] the tota! .amounts specified in the Annual Funding Agreements. Congres~ appropriated funds by means of a ~eneral appropriation sufficient to fund the Alaska Tribal Health Compact and other compacts negotiated u~der Title III of the Act fo~ the 1995 fiscal year on September 30, 1994. See P.L. 103-332. 16. ~ticle II, Section 4(a) of the Compact auth.orizes all

14 15 16 17" 18

20 21 22

Compact co-signers to elect how they wish to be paid and it describes when such payments are to be maie by ~he Secretary: (a) Payment Schedule. Payment shall be made as expeditiously as possible and shall include financial arrangements to cover funding during periods under continuing resolutions to the extent permitted by such resolutions. For each fiscal year covered by the Compact, the Secretary shall make CO~PLAINT - 7 \41079\I\COMPLAI2.NEW

24

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2 3

5

7

available the funds specified for that fiscal year under th~Annual Funding Agreements by paying the respective total amount ~s provided for in each Annua~ ~unding Agreement in advance lump sllm, as. permitted by law, or such other payments as provided in the schedule set forth in each Annual Funding Agreement. The first payment shall be ma~e o~ or before ten calenda~ days after the date on which the Office of Management and Budgetapportions the appropriations for that fiscal year for the prog~ams, activities, function~ and ~ervices subject to the Compact. OMB apportioned the 1995 fiscal year appropriations for

9

distribution on Nover£ber 14, 1994. 17. Article II, Section 4(b) of the Compact explains how

1l 1.2 13 14

interest earned on funds paid by the IHS to Compact co-signers kay be used: (b) Interest on Advances. Co-signers receiving funds under applicable Annual funding Agreements pursuant to this Compact shall be permitted to retain interest earned on funds advanced pending disbursement as authorized by law. Interest earned on advances shall not diminish the amount of funds the co-signer is authorized to receive under its Annual Funding Agreement in the year earned or in any subsequent fiscal year[ 18. Article II, Section i0 of the Compact addresses how disputes between the parties are to be resolved. The provision incorporates the dispute resolution mechanisms available to Title I contractors under 25 U.S.C. § 450m-l(d), which includes

16 17 18, 19 20 21

23 24 25

the Cogtract Disputes Act of 1978, 41 U.S.C. ~ 601 et seq.
(CDA).

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Section 611 of the CDA provides that: Interest on amounts found due to contractors on claims shall be paid to the contractor from the date the contracting officer receives the claim pursuant to section 605(a) of this title from the contractor until payment thereof. The interes~ provided for in this section shell be paid at the rate established by the Secretary of the Treasury pursuant to Public law 92-41 (85 Stat. 97) for the Kenegotiation Board. U.S.C; ~ 611. B. Bristol Bay A_re~ Health Corporation 19. BBAHC was a member of the consortium on behaif of whom ANHB submitted the all-Alaska compact proposal to the IHS. BBP~HC participated in the negotiations with IHS and signed the Compact on behalf of the 32 federally-recognized Tribes in the Bristol

5 6 7 8 9 i0 II IZ 13

15 16 17 18 19 2O 21

Bay and Calista regions on June 30, 1994, The Compact was submitted to Congress on June 30, "1994 and became effective for BBAHC on October l, 1994. 20. BBAHC negotiated and entered into an AFA with the Director of the [HS on June 30r 1994. The AFA was submitted to Congress on June 30, 1994 and bec~me effective for BBAHC on October i, 1994. The AFA transfers specific responsibilities and funds to carry out those responsibilities from the IHS to BBAKC

24 25

for the delivery of health care to Alaska Natives and American Indians in the Bristol Bay and Calista regions.

COMPLAINT - 9
\ 41079 \I\COM?LAI2 .~EW

75

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I z

21. On September 29, 1994 BBAHC negotiated and" signed ~n Addendum to the AFA. 22~ BBAHC elected to have funds due under its AFA and Addendum paid in one annual lump sum payment. Section 5(a)'of

5 6 7

the A~ddendum provides that, with the exception of certain specifically identified ~mounts, all funds identified in Section 4 of the Addendum shall be paid in accordance with ~hrticle .!l, Section 4 (a) of the Compact in one annual lump sum

9 10 11 12 la

payment to be made by check or wire transfer. 23. Section 4 of BBAHC's Addendum identifies' the amount of fund's that the IHS is obligated to pay BBAHC. Section 4 (a) lists five categories ~f funds and specific amounts of funds .which IHS is required to pay the Corporation: Recurring Base ($15,465,949.00), Non-Recurring' Funding ($371,701.00), Alaska ~hrea Tribal Shares ($514,291.00), Special Funds' ($0), and Headquarters Tribal Shares ($850,151.00) . 24. In Secti6n 4(b) of BBAHC's Addendum the IHS agreed to pay the Corporation $640,396.002 in contract support costs. 25. Sections 4 (a) and (b) of BBAHC's Addendum thus require

21

the IHS to pay BBAHC a total of $17,842,488.00. From this amount is deducted $I,539~489.20, an amount which the I~S is entit-led to

The figure identified in the Addendum includes $147,000.00 for contract support associated with "st~-~t-up costs." stsrt-up costs are provided for in section 4(c) of the Addendum bat have not been negotiated yet. Consequently ]!47,000.00 has been deducted from the amount set out in this paragraph.

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retain under Sections 5(b) and (c) of the Addendum. Thus, the total amount that the IHS is obligated to pay BBAHC in one annual lump sum payment under the Compact, AFA and Addendum is $16,302,998.80. 26. The IHS awarded BBAHC three months funding on

6 7 8 9 io ii 12

November 30, 1995, for the period of October I, 1994 through Decembe~ 30, 1994 in the amount of $4,145,400.00. On January 6, 1995, the IHS paid BBA!{C one lump sum payment of $10,106,554.00 ~nd on January i0, 1995, the IHS made a payment of $148,696.00. On June 9, 1995, the IKS paid BBA/~C $993,848.00, a payment that. iincluded amounts due for tribal 'shares. The total amount which remains due and owing by the ~HS to BB~a_HC in a lump sum payment under the te~ms of the Compact, AFA and Addendual is $908,500.80.

i

27. On December 8, 1994, BBAHC filed ~ claim under the CDA requesting that all funds remaining due and owing, including

16

interest on such funds, be immediately paid to BBAHC and a
17

written decision on the claim in the event the cl~i!a was denied.
18 19 20 ¯ 21 22 23 24 25

28. On January 6 and 10, 1995, after the CDA claim was filed by BBAHC, the IHS paid the Corporation a portion of the funds due under the Addendum. On June 9, 1995, the IHS paid BBA/~C a. portion of the funds identified in Section 4(a) of the Addendum as Alaska and Headquarters tribal sharas. The IHS has'yet to pay BBAHC any funds identified in Section 4(b) of the Addenduall or as contract support costs on tribal sha~es.
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29. On February 24, 1995 the Director of the IKS responded to the claim filed by BBAHC under the CDA. In his letter the Directo.r confirmed that the IHS would pay BBAHC al! Tribal Shares remaining due and owing. He also stated that he was interested

5 6 7

in re-negotiating any commitments that the IHS made to pay BBAKC contract support costs on tribal shares, but he made it clear that "[i]n the absence of any renegotiations, the IHS will honor any commitments made by the Agency .... "

9 IO Ii. 12

30. On Marc/q 3, 1995, shortly after receiving the Director's February 24, 1995 letter BBAHC declined in writing to ~enegotiate any of the amounts set out in the AFA and Addendum. BBAHC made clear .that it expected to be paid all amounts due under the AFA and Addendum, including all contract support costsr Alaska and

14 15

Headquarters tribal shares, as well as al! interest due on unpaid amounts and amounts paid late, as provided for unde~ the CDA.

16 17 18 ~9 2o 21 22 23 24 2~

Southe~stAl~sk~ ~egion~l Health C~rporation 31. SEARHC was a member of the consortittm on behalf of whom ANHB submitted the All-Alaska compact'proposal to the IES. SEARHC participated in the negotiations with IHS and signed the Compact on behalf of the 19 federally-recognized Tribes in Southeast ~hlaska that sanction it as a Tribal Organization on September 21, 1994. The compact .was submitted to Congress on October 30, 1994, and became effective for SEARHC on January i, 1995. COMPLAINT- 12
\4 i079\I \COMPLAI2 .NEW

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~ ui4

i

32. SE!h~J~C negotiated and entered into an AFA with the Director of the IHS on June 30, 1994. On September 21~ 1994, after re.negotiations with the IHS, SE~C signed a revised AFA.'

4 5 6 ?

The revised AFA was submitted to Congress on October 30, ig94, and bec~me effective for SEAKKC on January !, 1995. The revised AFA transfers specific responsibilities and funds to carry out those responsibilities from the IHS to SEAP~HC for the delivery of health care to Alaska Natives and American Indians in Southeast Aiaska.

I0

33. SEARHC elected to have funds due under its rivised A2A paid in one annual lump sum payment. Section 5 of the revised

12

AFA provides thatl with the exception Qf certain specifically identified ~!~ounts, a~l ftu~ds identified in Section 4 shall be paid in accordance with Article II, Section 4(a) of the Compact

16 I? 18

in one annual lu!~p sum payment to be made by check or wire transfer. 34. Section 4 of SEARHC's revised A IrA identifies the amount of funds that the IHS is obligated to pay SE~IKHC. Section 4(A) lists five categories of funds and specific amounts of funds

~ ~_. 21

which IHS is required to pay the Corporation. When calculated for a nine month period (January i, 1995 to September 30, 1995), the amount that the IHS was required to pay SE/~RI~C was as follows: Recurrin~ Base and Non-Kecurring F~nding ($21,264,853.00), Alaska !irea Tribal Shares ($i,476,441.00),
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~..I U.t b

1 z 3

Headquarters Tribal Shares ($830,448.00) and Contract Support on Tribal Shares ($297,912.00). 35.'Section 4 of SEARHC's~AFA requires the IHS to pay SEAKHC a total of $22,680,654.00. From this amount is deducted $5,680,000.00, an amount which the IHS is entitled to retain

6 under. Sections 4(B) and (C) of the revised AFA. Thus, the tota!
? 8

l~ump sum payment under the Compact and AFA is $20,189,654.00. 36. On January 27, 1995, the IHS paid SEAKHC one lump sum payment of $18,479,836.00 On May 18, 1995, the IHS paid SEARHC

i0

$1,146,776.00 a payment that included amounts due for triba! shares. Th~s, the total ~mount due SEARHC in one annual lump sum

!2 13

under the Compact and revised AFA is $563,'042.00.

"

37. On January 26, 1995, SEARHC filed a claim ~nder the CDA requesting that all funds remaining due and owing, including interest on such funds, be immediately paid to SEARHC and a

!? 18

written decision on the claim in the event the claim was denied. 38. On January 27, 1995, after the CDA claim was filed by SEARHC, the IHS paid the corporation a portion of the funds due under the revised AFA. On May 18, 1995 the IHS paid SEARHC a portion of the funds identified in Section 4 of the AFA as Alaska and Headquarters triba! shares. The IHS has yet to pay SEARHC any funds identified in Section 4 of the AFA as contract support on tribal shares.

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\~I079\I\COMPLAI2.~W

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1 2 3

D.

Maniilaq Association 39. Maniilaq was a member of the consortium on behalf of

whom ANHB submitted the All-Alaska compact proposal to the IHS. Maniilaq participated in the negotiations with IHS and signed the

5 6

Compact on behalf of the 12 federally-recognized Tribes in the Northwest Arctic Borough an~ Point Hope that sanction it as a Tribal Organization on September 29, 1994. The compact was ~submitted to Congress on October 30, 1994 and became effective

9 1o
11

for Maniilaq on January I, 1995. 40. Maniilaq negotiated and entezed into an AFA with the !Director of the IHS on September 29, 1994. The AFA was submitted to Congress on October 30, 1994, and became effective for Maniilaq on January I~ 1995. The AFA transfers specific responsibilities and funds' to carry out those responsibilities

iZ
13

15

from the IHS to Maniilaq for the delivery of health care to
16 17

Alaska Natives and American Indians in ~he Northwest Arctic Borough and Point Hope. 41. Maniilaq elected to have funds due under its AFA paid in

18
19

zo
21 22

one annual lump sum payment. Section 5(A) of the AFA provides that, with the exception of certain specifically identified amounts, el! funds identified in Section 4 of the AFA shall be )aid in accordance with Article II, Section 4(ai of the Compact Ln one annual lump sum payment to be made by check or wire transfer~
COMPLAINT - 15 \ 41079\!\COM2LAI2 .NEW

23
24

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42. Section 4 of Maniilaq's AFA identifies the amount of funds that the IHS is obligated to pay Maniilaq. .Section 4(A)
3

lists five categories of funds and specific amounts of funds which IHS is required to pay the Corporation: Recurring Base

5

($10,771,330.00), Non-Recurring Funding ($248,500.00), Alaska Area Tribal Shares ($343,611.00), Special Funds ($1,102,000.00)

7 and Headquarters Tribal Shares ($609,429.00).
9 10 1.1. 12 13

contract support costs in the amount of $1,643,626.00. 44. Sections 4(A) and (B) ofManiilaq's AFA require the IHS ito pay Maniilaq a total of $14,718,496.00. From this amount is deducted $2,235,332.00, an amount which the IHS is entitled to retain under Sections 5(B) and (C) of the AFA. Thus, the tota! amount that the IHS is obligated to pay Maniilaq in one annua!

"15

lump sum payment udder the Compact and AFA is $12,483,164.00. 45. The IHS awarded Maniilaq funds for the period of

17

October I, 1994 through December 30, 1994, in the amount of
!9 2O

$4,204,983.00. These funds were paid to Maniilaq in a Title I contract, as Manii!aq's AFA only became effective on January i, 1995. On February 7r 1995, the IHS paid Maniilaq one lump sum payment of $4,517,878.00.3 On Ma~ 30, 1995, the IHS paid

22

23 2 25 This payment included $1,992,400 for staffing of a new hospital in Kotzebue, Alaska. This amount was not included in Section 4(A) and (B) of Msniilaq's AFA as an amount that the IHS was obligated to pay Man£ilaq I one lump sum payment. The $1,822,400 has been deducted from the kotal payment amount identified in this paragraph.

COMPLAINT - 16

\ 41079\i \COMI~LA~2 .NE~

Case 1:07-cv-00725-MMS

Document 11-2

Filed 01/26/2008

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1

Maniilaq $638,0194. Thus, the total amount due Nanii!aq in one annual.lump sum under the Compact and AFA i's $3,122,284.

3 4 5 6 ? 8 9 I0

:

46. On January 16, 1995, Maniilaq filed a claim under the

CDA requesting that all funds remaining due and pwing, including interest on such funds, be immediatelypaid to Maniileq and a written decision on the claim in the event the claim was denied. 47. On February 7, 1995, and May 30, 1995, after the CDA claim was filed by Maniilaq, the IHS paid the.Corporation a portion of the funds due under the AFA. The IHS failed, however, to pay Maniilaq any funds identified in Sections 4 (A) and (B) o~ the AFA as special funds or contract support on tribal shares. 48. On March 7, 1995, the Director of the IHS responded to

13 ~4

the claim filed by Maniilaqunder the CDA. In

his letter the

Director confirmed that the IHS would pay Maniilaq all tribal shares remaining due and owing. He also stated that he was 16 interested in re-negotiating any commitmeits that the IHS made to
17

18

pay Maniilaq contract support costs on tribal shares, but he made

'19 it clear that "[i]n the absence of any renegotiations, the IHS 20 will honor any commitments made by the Agency .... " The Director Z1 2Z did not, however, respond directly .to Maniilaq's request for immediate payment of the special funds.

25

The actual payment was $644,219.00. The IHS has not to date provided a written 5reakdown of the funds which make up this payment. However, the Agency did provide Maniilaq ~n oral breakdown of the funds, and Maniilaq believes that the Agency unilaterally and improperly reduced the amognts due by the IHS in the Agreement by approximately $6,200.00.

COMPLAINT - 17
\41079\I\COM~LAI2.NEW

Case 1:07-cv-00725-MMS

Document 11-2

Filed 01/26/2008

Page 44 of 61
~]019

1

¯ 49. On March 17, 1995, shortly after receiving the Director's March 7, 1995 letter, Mah~ilaq declined in writing to renegotiate ~ny of the ~mounts set out in the /LFA. Mani~laq stated that it expected to be paid al! amounts due under the AFA,

5 6

including all contract support costs, Alaska and headquarters tribal shares, special funds, as "well as all interest due on unpaid amounts and amounts paid late, as provided for under the

8 9 Io
11

CDA. E. IHS' Actions re: A_laska!~re~ ~nd He~dciuarters Triba! Shares and Specia! Funds 50. At no time has IHS contested that BBAHC, SEAP~C, and Maniilaq have B legal right under the Compact, AFAs and Addenda to be paid all Alaska and Headquarters tribal shares and specia! funds that are identified in those agreements in one lumap su~m payment in accordance with Art±cle If, section 4(a) of the Compact. 51. In his February 24, 19.95. a_~.d March 7, 1995, responses to

12. 13
14

15
16

18 19

BBAHC's and Maniilaq's CDA claims the Director oZ the IHS confirmed that the IHS would pay the Alaska /Lrea and Headquarters tribal shares due under the A FAs and Addenda. In addition, IHS persoD_nel on a nu/~ber of occasions promised to the Plaintiffs that the tribal shares would be paid immediately: (i) On November 30, 1994, in Albuquerque, New Mexico,

the IHS Director met with representatives of BBA/~C, SF~HC,

¯ COMPI~INT - 18 \41079\~\COMPLAI2 .NEW

Case 1:07-cv-00725-MMS

Document 11-2

Filed 01/26/2008

Page 45 of 61

1 2

Maniilaq and other co-signers