Are Appropriations That Have Already Been Spent Available to Pay a Government Contract (11-551)
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Are Appropriations That Have Already Been Spent
Available to Pay a Government Contract?
CASE AT A GLANCE
By law, the federal government must contract with Indian tribes to administer government programs
on reservations and must include in the contracts an amount for the overhead the tribes incur. The
government's obligation to pay the overhead is, however, subject to the availability of appropriations, and
Congress has capped the amount available every year since 1994. The Supreme Court must decide if the
tribes are entitled to the full amount of overhead provided in the contracts despite the cap.
Salazar v. Ramah Navajo Chapter
Docket No. 11-551
Argument Date: April 18, 2012
From: The Tenth Circuit
by Daniel Thies
United States District Court for the Northern District of Illinois
ISSUE
Is the government required to pay all of the contract support
costs incurred by a tribal contractor under the Indian Self-
Determination and Education Assistance Act, 25 U.S.C. §§ 450 to
458ddd-2, where Congress has imposed an express statutory cap
on the appropriations available to pay such costs and the Secretary
of the Department of the Interior cannot pay all such costs for all
tribal contractors without exceeding the statutory cap?
FACTS
In our system of separation of powers, the government cannot spend
unless Congress first appropriates funds. U.S. Const. art. I, § 9, cl. 7.
Because most appropriations cover no more than a year at a time,
the executive branch sometimes must enter into contracts before
Congress has appropriated the necessary funds. To do so without
violating the Appropriations Clause, contracting officers make the
government's obligations in a contract subject to the availability
of appropriations. See 2 U.S. Gen. Accounting Office, Principles of
Federal Appropriations Law 6-55 to 6-66 (3d ed. 2006) [hereinafter
GAO Redbook]. That phrase ensures that a contract cannot bind the
government until Congress has appropriated funds.
But what does it mean for appropriations to be available?
That is the question Salazar v. Ramah Navajo Chapter presents,
in the context of the Indian Self-Determination and Education
Assistance Act (ISDA), 25 U.S.C. §§ 450 to 458ddd-2. The ISDA
authorizes Indian tribes to manage programs and services that the
federal government would otherwise provide, including law enforce-
ment, courts, education assistance, land management, probate
assistance, natural resource services, employment assistance,
child welfare assistance, emergency youth shelters, and juvenile
detention services. To effectuate the ISDA, Indian tribes enter self-
determination contracts obligating government agencies to provide
the tribes with the amount the agency would otherwise spend on a
particular program, plus additional contract support costs (CSCs).
CSCs cover the overhead necessary to administer the program.
Although the ISDA requires the agencies to include in self-determi-
nation contracts an amount for CSCs, it also twice specifies that the
provision of funds is subject to the availability of appropriations.
That same phrase must appear in every contract an agency makes
with an Indian tribe. (model agreement § 1(b)(4)). Since the imple-
mentation of this system in 1987, the tribes have negotiated annual
contracts requiring the government to fully fund CSCs.
The scheme worked well until, as often happens, Congress tired
of paying the bill. Rather than repealing the ISDA's requirement
that the agencies pay CSCs, however, Congress began capping the
amount of funding available to pay CSCs. Starting in 1994 and in
every year thereafter, Congress included a provision in the relevant
annual appropriations act stating that payment for CSCs is not to
exceed a certain amount. Consequently, each year the Secretary
of the Interior (the secretary) has had insufficient funds for CSCs,
forcing him to pay each tribe only a percentage of the amount to
which the tribe is entitled under the contracts. Between 1994 and
2004, the tribes received between 77 and 93 percent of their CSCs
each fiscal year. From 1994 to 1999, for example, plaintiff Ramah
Navajo Chapter was underpaid a total of $1,040,918.
The plaintiffs here brought a class action claim seeking the money
for CSCs that the secretary failed to pay them from 1994 onward.
According to the plaintiffs, the ISDA and their contracts require the
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Are Appropriations That Have Already Been Spent Available to Pay a Government Contract (11-551)
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