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Babbitt v. Oglala Sioux Tribal Public Safety Department

October 27, 1999


Before Michel, Plager, and Gajarsa, Circuit Judges.

The opinion of the court was delivered by: Plager, Circuit Judge

Appealed from: Department of Interior Board of Contract Appeals.

Opinion for the court filed by Circuit Judge PLAGER. Additional views filed by Circuit Judge GAJARSA.

The United States Department of the Interior Board of Contract Appeals ("IBCA" or "Board") granted summary judgment against Bruce Babbitt, Secretary of the Interior ("Government" or "Interior"), and in favor of Oglala Sioux Tribal Public Safety Department ("Oglala"). See Appeal of Oglala Sioux Tribal Pub. Safety Dep't, IBCA No. 3680-97, 98-2 BCA 29,833 (Interior B.C.A. June 24, 1998). In its appeal to the Board, Oglala claimed entitlement to all of its indirect (contract support) costs on its 1995 fiscal year self-determination contracts under the Indian Self-Determination and Education Assistance Act ("ISDA"), 25 U.S.C. §§ 450-450n (1994); Interior had provided only about 92% of the contract amount for such costs due to a shortage in congressional appropriations. The IBCA concluded that Oglala was entitled to full funding. The Board reasoned that Interior was legally bound to provide Oglala with full indirect costs notwithstanding Congress's reduced lump sum appropriation for ISDA contracts and an express congressional cap on funds for indirect costs. Because the ISDA explicitly makes funding of ISDA contract indirect costs subject to the availability of appropriations, and because Interior had no choice but to comply with the statute, we reverse the decision of the Board and remand the case.


This appeal is one of a number of disputes stemming from the ISDA. The ISDA's stated purpose is to allow Native American tribes to operate their own federal programs directly. Under the ISDA, a tribe and the Secretary of the Interior enter into a "self-determination contract," which incorporates the provisions of the model contract contained in the ISDA text. See 25 U.S.C. § 450l(a), (c) (1994). The ISDA requires the Department of the Interior's Bureau of Indian Affairs ("BIA") to fund programs (base funding) and to fund indirect costs to self-determination contractors. The indirect cost rate is determined by annual negotiations with the Department of the Interior's Office of the Inspector General. The resulting rate is multiplied by the total direct cost base of a contractor's contracts for a particular fiscal year to calculate the indirect cost amount. Funding of ISDA contracts is dependent upon congressional appropriations.

Appellee, Oglala Sioux Tribal Public Safety Department, is a tribal organization which operates an ISDA contract for public safety on the Pine Ridge Reservation in South Dakota for the Oglala Sioux Tribe. Oglala has a multi-year ISDA contract with the BIA. For fiscal year 1995, Oglala incurred indirect costs of $1,313,840. Some of these indirect costs were expended prior to congressional appropriations for the fiscal year.

For fiscal year 1995, Congress appropriated $1.5 billion for the operation of Native American programs, "of which not to exceed $95,823,000 shall be for payments . . . for contract support costs" for contracts authorized by the ISDA. See Interior Appropriations Act of 1995, Pub. L. No. 103-332, 108 Stat. 2499, 2511 (1994). Due to the cap in funding of contract support costs, the Secretary implemented a plan to allocate the available funds. See Distribution of Fiscal Year 1995 Contract Support Funds, 59 Fed. Reg. 55318 (1994). In the end, tribes that submitted timely proposals all received 91.74% of their indirect costs. Oglala received 91.74%, which was $108,506 less than the originally negotiated amount. After the contracting officer denied Oglala's claim for full funding of indirect costs, Oglala appealed to the IBCA.

The IBCA granted summary judgment to Oglala after the Government failed to show cause why this case differed from Appeals of Alamo Navajo Sch. Bd., Inc. & Miccosukee Corp., IBCA No. 3463, 98-2 BCA 29,832 (Interior B.C.A. Dec. 4, 1997), which involved the same legal issue.*fn1 In Miccosukee, the IBCA concluded that Interior was legally bound by the ISDA contracts to provide full indirect cost funding, despite specific congressional limitations on appropriations for indirect costs. See Miccosukee, No. 3464, slip op. at 45. The IBCA reached this Conclusion on the basis of its reading of the ISDA and case law, independent of the Government's trust responsibilities to Native Americans. See id. at 51-52. Although Oglala's indirect costs suit involves a different fiscal year than that in Miccosukee, the IBCA reasoned that minor factual differences between the two cases failed to raise a genuine issue of material fact that would preclude summary judgment against the Government based on Miccosukee. See Appeal of Oglala Sioux Tribal Pub. Safety Dep't, No. 3680-97, slip op. at 2.

The Government appeals the IBCA's grant of summary judgment for Oglala. We have jurisdiction to hear this appeal under 28 U.S.C. § 1295 (1994).


The grant of summary judgment is reviewed as a matter of law, to determine that no genuine issues of material fact exist when the record is read in the light most favorable to the non-moving party, and that the moving party is otherwise entitled to judgment on the law. See Confederated Tribes of Colville Reservation v. United States, 964 F.2d 1102, 1107 (Fed. Cir. 1992). Conclusions of law are reviewed independently and without deference, see Orlando Helicopter Airways, Inc. v. Widnall, 51 F.3d 258, 262 (Fed. Cir. 1995); though, of course, we give careful consideration to the Board's legal Conclusions in recognition of its "considerable expertise in construing government contracts," West v. All State Boiler, Inc., 146 F.3d 1368, 1371 (Fed. Cir. 1998).

On appeal the Government argues that Oglala has no statutory or contractual right to additional funding for its contract support costs because under the ISDA the requirement to fund such costs is subject to the availability of appropriations. As in any case of statutory interpretation, we begin with the language of the statute, specifically, 25 U.S.C. § 450j-1 (1994), entitled "Contract funding and indirect costs." Subsection (a) describes the amount of funds to be provided. For example, Interior is obligated to provide direct costs "not less than the appropriate Secretary would have otherwise provided for the operation of the programs . . . for the period covered by the contract." 25 U.S.C. § 450j-1(a)(1) (1994). In addition, Interior must supply "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 . . . ." Id. § 450j-1(a)(2). The following subsection, 450j-1(b), describes reductions and increases in the amount of funds provided. This subsection concludes with the unequivocal statement that: "Notwithstanding any other provision in this subchapter, the provision of funds under this subchapter is subject to the availability of appropriations . . . ." Id. § 450j-1(b) (emphasis added).

The language of § 450j-1(b) is clear and unambiguous; any funds provided under an ISDA contract are "subject to the availability of appropriations." The clause preceding this limitation, "[n]otwithstanding any other provision in this subchapter," further clarifies that other statutory language in the ISDA relied upon by Oglala, see, e.g., § 450j-1(f) ("Upon the approval of a self-determination contract, the Secretary shall add to the contract the full amount of ...

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