CONTRACT FUNDING AND INDIRECT COSTS.

SEC. 205. CONTRACT FUNDING AND INDIRECT COSTS. Title I of the Indian Self-Determination and Education Assistance Act is further amended by adding the following new section 106: “Sec. 106. (a) (1) The amount of funds provided under the terms of Self-Determination contracts entered into pursuant to this Act shall not be less than the appropriate Secretary would have otherwise provided for the operation of the programs 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 carried 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. 102 STAT. 2293 “(3) Any savings in operation under a Self-Determination contract shall be utilized to provide additional services or benefits under the contract or be expended in the succeeding fiscal year as provided in section 8 of this Act. “(b) The amount of funds required by subsection (a)— “(1) shall not be reduced to make funding available for con-tract monitoring or administration by the Secretary; “(2) shall not be reduced by the Secretary in subsequent years except pursuant to— “(A) a reduction in appropriations from the previous fiscal year for the program or function to be contracted; “(B) a directive in the statement of the managers accompanying a conference report on an appropriation bill or continuing resolution; “(C) a tribal authorization; “(D) a change in the amount of pass-through funds needed under a contract; or “(E) completion of a contracted project, activity, or program; “(3) shall not be reduced by the Secretary to pay for Federal functions, including, but not limited to, Federal pay costs, Federal employee retirement benefits, automated data processing, contract technical assistance or contract monitoring; “(4) shall not be reduced by the Secretary to pay for the costs of Federal personnel displaced by a Self-Determination contract; and “(5) may, at the request of the tribal organization, be in-creased by the Secretary if necessary to carry out this Act or as provided in section 105(c). Notwithstanding any other provision in this Act, the provision of funds under this Act is subject to the availability of appropriations and the Secretary is not required to reduce funding for programs, projects, or activities serving a tribe to make funds available to another tribe or tribal organization under this Act. “(c) The Secretary shall provide an annual report in writing on or before March 15 of each year to the Congress on the implementation of this Act. Such report snail include— “(1) an accounting of the total amounts of funds provided for each program and budget activity for direct program costs and indirect costs of tribal organizations under Self-Determination contracts during the previous fiscal year; “(2) an accounting of any deficiency of funds needed to provide required indirect costs to all contractors for the current fiscal year; “(3) the indirect costs rate and type of rate for each tribal organization negotiated with the appropriate Secretary; “(4) the direct cost base and type of base from which the indirect cost rate is determined for each tribal organization; and “(5) the indirect cost pool amounts and the types of costs included in the indirect cost pools. “(d) (1) Where a tribal organization’s allowable indirect cost recoveries are below the level of indirect costs that the tribal organizations should have received for any given year pursuant to its approved indirect cost rate, and such shortfall is the result of lack of full indirect cost funding by any Federal, State, or other agency, such shortfall in recoveries shall not form the basis for any theoretical over-recovery or other adverse adjustment to any future 102 STAT. 2294 years’ indirect cost rate or amount for such tribal organization, nor shall any agency seek to collect such shortfall from the tribal organization. “(2) Nothing in this subsection shall be construed to authorize the Secretary to fund less than the full amount of need for indirect costs associated with a Self-Determination contract. “(e) Indian tribes and tribal organizations shall not be held liable for amounts of indebtedness attributable to theoretical or actual under-recoveries or theoretical over-recoveries of indirect costs, as defined in Office of Management and Budget Circular A–87, incurred for fiscal years prior to fiscal year 1988. “(f) Any right of action or other remedy (other than those relating to a criminal offense) relating to any disallowance of costs shall be barred unless the Secretary has given notice of any such disallowance within three hundred and sixty-five days of receiving any required annual single agency audit report or, for any period covered by law or regulation in force prior to enactment of the Single Agency Audit Act of 1984 (chapter 75 of title 31, United States Code), any other required final audit report. Such notice shall set forth the right of appeal and hearing to the board of contract appeals pursuant to section 110. Nothing in this subsection shall be deemed to enlarge the rights of the Secretary with respect to section 16 of the Indian Reorganization Act of June 18, 1934 (48 Stat. 984; 25 U.S.C. 476). “(g) Upon the approval of a Self-Determination contract and at the request of an Indian tribe or tribal organization, the Secretary shall add the indirect cost funding amount awarded for a self-determination contract to the amount awarded for direct program funding for the first year and, subject to adjustments in the amount of direct program costs for the contract, for each subsequent year that the program remains continuously under contract. “(h) In calculating the indirect costs associated with a self-determination contract for a construction program, the Secretary shall take into consideration only those costs associated with the administration of the contract and shall not take into consideration those moneys actually passed on by the tribal organization to construction contractors and subcontractors. “(i) Within one month after enactment of this section, the Secretary is mandated to establish a team in each area of the Bureau of Indian Affairs which consists of agency personnel and tribal representatives for the purpose of analyzing the ‘Indian Priority System’ and other aspects of the budgeting and funding allocation process of the Bureau of Indian Affairs for the purpose of making a report to Congress with appropriate recommendations for changes and legislative actions to achieve greater tribal decision-making authority over the use of funds appropriated for the benefit of the tribes and their members. The report along with the analysis, findings and recommendations of the area teams shall be submitted to Congress within six months of enactment of this provision. The Secretary may submit to Congress separate comments on the information and recommendations on the report.”.