Congress Expands Buy Indian Act Procurement Authority: 7 Key Changes Native American Businesses Should Watch

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PilieroMazza PLLCA law passed by Congress at the end of 2020 seeks to expand contracting opportunities under the Buy Indian Act (Act). Through the Indian Community Economic Enhancement Act of 2020, Congress amended the Act to expand the scope of the authority of the Department of the Interior (DOI) and the Department of Health and Human Services (HHS) to make acquisitions subject to preferences for Indian labor and Indian industry under the Act. It is unclear how DOI or HHS will apply these new statutory provisions to its acquisitions. However, federal contractors owned and controlled by Indian tribes should keep apprised of developments, as new set-aside opportunities may arise under the Act.

Prior to this amendment, the Act provided scant detail on how Indian set-aside procurements were to be conducted. The Act simply stated that “[s]o far as may be practicable Indian labor shall be employed, and purchases of the products (including, but not limited to printing, notwithstanding any other law) of Indian industry may be made in open market in the discretion of the Secretary of the Interior.” In addition, in a separate statute, the Indian Health Service (IHS), an agency of HHS, was given the authority to use set-aside procurement procedures for Indian labor and industry under the Act. Under the prior version of the Act, it was understood that these procurement procedures were generally reserved to IHS and, with limited exceptions, did not apply to any other HHS agency. Similarly, set-asides or preferences under the Act within DOI were generally reserved to the Bureau of Indian Affairs (BIA).

The Act, as amended, includes several key changes.

  1. Use of Indian Set-Asides Requirement
    The Act now states that, unless determined by the DOI Secretary and the HHS Secretary (Secretaries) to be “impracticable and unreasonable,” “Indian labor shall be employed.” The previous version of the Act provided that “[s]o far as may be practicable Indian labor shall be employed . . .” The new language requiring the employment of Indian labor is similar in most respects to the prior version of the Act, but arguably more expansive because the Secretaries are now affirmatively required to make a determination that the use of Indian set-asides is “impracticable” and “unreasonable” in a particular case.
  2. Open-Market Purchasing Expansion
    The Act now provides that “purchases of Indian industry products (including printing and facilities construction, notwithstanding any other provision of law) may be made in open market by the Secretaries.” Unlike the previous version of the BIA, which only identified printing as a specific type of product of Indian industry that may be made in the open market, the amended version of the Act now indicates that facilities construction is authorized under the Act.
  3. Set-Aside Authority Extension
    While previously the authority to set aside procurements for Indian labor or industry products under the Act was (with certain exceptions) restricted to the BIA and the IHS, the Act no longer restricts the ability to set aside procurements for Indian labor or Indian industry products to the BIA or IHS. It is thus possible that other agencies that are components of HHS and DOI could utilize these set-aside procedures.
  4. Assistance Eligibility Restrictions Reduction
    The Act provides that participation in or receipt of assistance pursuant to a developmental assistance agreement under the Department of Defense (DOD) Mentor-Protégé Program does not render any individual or entity involved in the provision of Indian labor or Indian industry products ineligible to receive assistance under the Act. Additionally, the Act provides that, for purposes of the Act, no affiliation may be found between a mentor and a protégé under the DOD Mentor-Protégé Program as a result of any form of developmental assistance provided pursuant to a mentor-protégé agreement under that program. Both provisions were substantively included in the previous version of the Act.
  5. Outreach Requirements
    In order to implement the above-discussed provisions, the Act requires the Secretaries to conduct outreach to Indian industrial entities, provide training, and promulgate regulations in accordance with the Act and with regulations that harmonize the procurement procedures of DOI and HHS. It also requires:
    • BIA regional offices and the Indian Health Services to aggregate data on compliance with the Act;
    • both departments to undertake procurement management reviews, including a review of their implementation of the Act; and
    • consultations with Indian Tribes, Indian industrial agencies, and other stakeholders regarding compliance with the Act and other small business procurement goals.
  1. Reporting Requirements
    The Act would now require each of the Secretaries to submit a report (on first an annual and then a biennial basis) to the Senate Committee on Indian Affairs and the House Committee on Natural Resources describing their implementation of the Act. Among other matters which are to be set forth in these reports, the Secretaries are required to include the names of each agency under the jurisdiction of the Secretaries’ respective departments to which procurement procedures under the Act have been applied and efforts made by additional agencies under their departments to use these procurement procedures. This requirement provides further evidence that Congress intended DOI and HHS to expand their use of set-asides under the Act for agencies other than BIA or IHS. The reports are also required to set forth a summary of the types of purchases made from and contracts award to, Indian economic enterprises as well as the total number and value of all purchases made of and contracts awarded for supplies, services, and construction to Indian economic enterprises and non-Indian economic enterprises.
  2. Compliance Goals
    The Act now requires each agency to set annual minimum percentage goals for compliance with the Act.

While it is unclear how much procurement authority under the Act will be expanded beyond BIA and IHS practically, the recent amendment to the Act is a sign that expanded set-aside opportunities will gradually become more available for Indian-owned or controlled business concerns. At the very least, this amendment shows that Congress desires more widespread use of set-aside procurements under the Act and will more closely scrutinize the extent to which such set-asides are used.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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