Indian Affairs Proposes Rules to Remove Barriers in Buy Indian Act Contracting Opportunities

The Department of the Interior (DOI) proposes to revise regulations implementing the Buy Indian Act, which provides the Department with authority to set aside procurement contracts for Indian-owned and controlled businesses. The proposed rule is to revise current procurement regulations that have created barriers to Indian Economic Enterprises (IEEs) from full participation in the DOI’s procurement process. The proposed rule is here.

The Buy Indian Act was signed into law in 1910 and was intended to require the Department of the Interior, Bureau of Indian Affairs to provide funding and procurement preference to Indian owned or operated businesses. The Buy Indian Act states 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” by the government. Indian Affairs (IA) first implemented the “Buy Indian” program in 1965, and over 100 years after the Buy Indian Act became law, the U.S. Department of the Interior adopted final rules to fully implement the law in 2013. Upon a review of the rules the DOI identified various aspects of Department of the Interior Acquisition Regulations (DIAR) that are barriers to equal opportunity for Indians and Indian Tribes in the DOI procurement process. The DOI found that these barriers inhibit job creation, are inefficient in promoting economic development, and limit Indian country from fully participating in procurements subject to the BIA. The proposed rule supplements the Federal Acquisition Regulation (FAR) and revises the DIAR to address those issues. The key provisions of the proposes rule would revise the DIAR  in the following ways as explained below: eliminate the restriction on IEEs from competing on certain construction contracts, expand IEEs’ ability to subcontract work consistent with other socio-economic set-aside programs, simplifies regulations giving preference to IEEs, and gives greater preference to Indian Economic Enterprises when a deviation from the Buy Indian Act is necessary, and clarify applicability of the Act. 

Elimination of Restriction for “Covered” Construction Contracts

The current language of the DIAR restricts IEE set-asides to construction for road facilities on or related to Indian-owned land as ”covered construction.” The proposed rules remove all references to covered construction throughout the regulation. Removal of this language will allow for the ability to set aside construction contracts to IEEs.

Expansion of Indian Economic Enterprises’ Ability To Subcontract

The proposed revisions removing references to covered construction and allow for set-asides of construction contracts to IEEs, as discussed above, exposed restrictions on IEEs with respect to subcontracting that exceed restrictions in other government socio-economic set-aside programs. Current regulations restrict IEEs from subcontracting more than 50% of the work to firms other than IEEs. This regulation is inconsistent with FAR regulations applicable to other socio-economic set-aside programs which have a higher threshold for limitation on subcontracting for construction awards. The change will allow IEEs to subcontract up to 75% for construction by special trade contractors and 85% for general construction. The proposed rule does not change the 50% subcontract limitation for supplies and services which is consistent with the subcontracting limitations in FAR. This rule ensures that the limitations on subcontracting applicable to IEEs are consistent with the limitations on subcontracting applicable to other socio-economic set-asides. 

Preference for Indian Small Business Economic Enterprises

The proposed rule revises the regulations giving preference to IEEs to clarify and simplify these preferences under the Buy Indian Act. Under the current regulations, Contracting Officers are directed to solicit purchases as an unrestricted small business set-aside open to any Small Business Economic Enterprise firm when the Contracting Officer determines two or more Indian Small Business Economic Enterprises would not provide competitive offers and the relevant agency approves the particular solicitation as an exception to the requirement of using the Buy Indian Act (deviation). The proposed rule would delete existing language determined to not be fully compliant with the Buy Indian Act and add language requiring the Contracting Officer to give priority to Indian Small Business Economic Enterprise firms through set-asides for all purchases subject to the Buy Indian Act, including acquiring supplies, general services, architect and engineering services, and construction.

Also, the language in current regulations only gives preference to Indian Small Business Economic Enterprises when the purchase is commercial or a simplified acquisition. The proposed revisions add language that requires the Contracting Officer to give priority to IEEs if the Contracting Officer determines that there is not a reasonable expectation of obtaining competitive offers. In addition, the updated language would allow sole source awards to an Indian Small Business Economic Enterprises or IEE authorized under FAR to be compliant with the Buy Indian Act.

Updates to Thresholds and Process for Deviations

In its review, the Department of Interior determined that the existing process for handling deviations are burdensome in implementation and not fully compliant with the Buy Indian Act. The proposed rule clarifies the deviation process by identifying acquisitions that do not require a deviation and streamlining the actions taken after a deviation is approved. Under the proposed rules, if a contract follows the requirements of FAR 6.3 or is subject to a previously approved deviation, the contract no longer requires an approved deviation. The proposed revisions simplify this process and provide that acquisitions made under an authorized deviation from the Buy Indian Act must follow the FAR and DIAR unless specified otherwise.

Companies who are looking to go after these types of awards should review the proposed new rules and consider providing comments by the December 27, 2021 deadline.

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