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Highlights

What GAO Found

The Department of the Interior's (Interior) Bureau of Indian Affairs (BIA) and the Department of Health and Human Services' Indian Health Service (IHS) have requirements in place to implement the Buy Indian Act. Through supplements to the Federal Acquisition Regulation, both BIA and IHS have policies and procedures to implement key requirements:

  • Indian-owned status . Eligible firms must be 51 percent Indian-owned. The agencies rely on firms to self certify that they are Indian-owned and interested parties may challenge a firm's self-certification.
  • Indian preference . The agencies require that contractors give preference to Indians in employment and training opportunities, and use a contract clause to implement this requirement.
  • Subcontracting . The agencies require contractors to give preference to Indian firms in the award of any subcontracts.

However, BIA and IHS have limited insight into implementation of the Buy Indian Act at their regional offices, where the contracts are generally awarded. For example, officials at both agencies' headquarters had little knowledge as to how often challenges to self-certifications of Indian-owned status occur on contracts awarded at the regional offices. Neither agency collects data from regional offices on use of the Buy Indian Act, and neither agency includes a specific review of Buy Indian Act contracts in its regular procurement review process. Therefore, the agencies may be missing opportunities to maximize the intended benefits of the Act in terms of growth and development of Indian firms.

Use of the Buy Indian Act comprises a small percentage of the two agencies' annual contract obligations. However, these agencies also award contracts to Indian-owned firms using other authorities, thus increasing the percentage of obligations awarded to Indian-owned firms.

Total Annual Contract Obligations

Total Annual Contract Obligations

Note: Numbers may not add to 100 percent due to rounding.

Why GAO Did This Study

The Buy Indian Act of 1910 and agencies' implementing regulations allow Interior's BIA and the Department of Health and Human Services' IHS to award federal contracts to Indian-owned businesses without using the standard competitive process. Among other requirements, eligible firms must be at least 51 percent Indian-owned and give preference to Indians in employment, training, and subcontracting.

GAO was asked to review the implementation of the Buy Indian Act. This report identifies (1) the policies and procedures at BIA and IHS to implement the Act; and (2) the funds obligated by BIA and IHS using the Buy Indian Act procurement authority.

GAO reviewed the Buy Indian Act, the Federal Acquisition Regulation, and agency policies and regulations. GAO also analyzed data from the Federal Procurement Data System-Next Generation on BIA and IHS's contract obligations under the Act between fiscal years 2010 and 2014 and met with agency officials.

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Recommendations

GAO recommends, among other things, that Interior and Health and Human Services enhance their oversight of execution of the Act at regional offices by collecting additional data on key requirements and including Buy Indian Act contracts in procurement reviews. Interior and Health and Human Services agreed with GAO's recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Health and Human Services To ensure consistent implementation of the Buy Indian Act procurement authority across the agencies and to enhance oversight of implementation of the Act at regional offices, the Secretaries of the Interior and Health and Human Services should direct the Bureau of Indian Affairs and Indian Health Service respectively, to clarify and codify their policies related to the priority for use of the Buy Indian Act, including whether the Buy Indian Act should be used before other set-aside programs.
Open
The Department of Health and Human Services concurred with this recommendation. The Indian Health Service (IHS) informed GAO that in order to clarify and codify the policies related to priority for use of the Buy Indian Act, formal rulemaking was required. HHS published the IHS Buy Indian Act Notice of Proposed Rulemaking in the Federal Register on November 10, 2020. The rule would formalize an administrative procedure for all IHS acquisition activities and locations to ensure uniformity for offers submitted by Indian labor and industry under solicitations set aside under the Buy Indian Act. The proposed rule also states that contracting officers should give priority to Indian Small Business Economic Enterprises for all purchases, regardless of dollar value, by utilizing the set aside for these enterprises to the maximum extent practicable. The comment period on the Buy Indian Act proposed rule closed on June 21, 2021. IHS is currently reviewing all comments and anticipates finalizing the rule by December 31, 2021.
Department of the Interior To ensure consistent implementation of the Buy Indian Act procurement authority across the agencies and to enhance oversight of implementation of the Act at regional offices, the Secretaries of the Interior and Health and Human Services should direct the Bureau of Indian Affairs and Indian Health Service respectively, to clarify and codify their policies related to the priority for use of the Buy Indian Act, including whether the Buy Indian Act should be used before other set-aside programs.
Closed - Implemented
The Department of the Interior has addressed this recommendation. On August 30, 2016 the Department of the Interior issued an update to its Indian Affairs Manual. The update is intended to ensure compliance with the Buy Indian Act and to ensure that acquisitions made to Indian Economic Enterprises are maximized to the fullest extent allowed by the Act. The manual states that all acquisitions made by Indian Affairs shall be made under the Buy Indian Act set-aside authority whenever the use of the authority is authorized and practicable and includes templates for documenting deviations from the Buy Indian Act.
Department of Health and Human Services To ensure consistent implementation of the Buy Indian Act procurement authority across the agencies and to enhance oversight of implementation of the Act at regional offices, the Secretaries of the Interior and Health and Human Services should direct the Bureau of Indian Affairs and Indian Health Service respectively, to collect data on regional offices' implementation of key requirements, such as challenges to self-certification.
Open
The Department of Health and Human Services (HHS) concurred with this recommendation. HHS's Indian Health Service (IHS) informed GAO that in order to clarify and codify policies related to priority for use of the Buy Indian Act, formal rulemaking was required. HHS published the IHS Buy Indian Act Notice of Proposed Rulemaking in the Federal Register on November 10, 2020, and IHS anticipates finalizing the rule by December 31, 2021. IHS officials told us that once IHS has promulgated its new Buy Indian Act rule, IHS will revisit how to collect data on regional/area offices' implementation of key policy requirements, including monitoring authentication of contractor credentials.
Department of the Interior To ensure consistent implementation of the Buy Indian Act procurement authority across the agencies and to enhance oversight of implementation of the Act at regional offices, the Secretaries of the Interior and Health and Human Services should direct the Bureau of Indian Affairs and Indian Health Service respectively, to collect data on regional offices' implementation of key requirements, such as challenges to self-certification.
Closed - Implemented
The Department of the Interior (DOI) has addressed this recommendation. In January 2016, DOI issued an interim policy memorandum that required quarterly reporting of any deviations from use of the Buy Indian Act as well as quarterly reporting of any challenges to authenticate Indian Economic Enterprises ownership. In accordance with this policy, in the first and second quarters of fiscal year 2016, DOI collected data from its regional offices on deviations from the Buy Indian Act. For example, in the second quarter of fiscal year 2016 all thirteen regional offices reported on reasons why the Buy Indian Act could not be applied in specific situations, as applicable. In addition to the reasons provided, other data such as the name of the contractor and date and dollar amount of the award were also provided. In August 2016 this interim policy was finalized and included in an updated version of DOI Indian Affairs Manual.
Department of Health and Human Services To ensure consistent implementation of the Buy Indian Act procurement authority across the agencies and to enhance oversight of implementation of the Act at regional offices, the Secretaries of the Interior and Health and Human Services should direct the Bureau of Indian Affairs and Indian Health Service respectively, to include Buy Indian Act contracts as a part of their regular procurement review process.
Closed - Implemented
The Department of Health and Human Services (HHS) concurred with this recommendation. As of fiscal year 2019, HHS began including a review element related to Buy Indian Act contracts in its annual acquisition management reviews of area offices. Specifically, the annual reviews include a question as to whether or not Indian Small Business Economic Enterprise or Indian Economic Enterprise set-asides were utilized as a part of the pre-solicitation process. If a set aside was not utilized, the review element includes a follow-up question as to whether an exception was documented in the contract file.
Department of the Interior To ensure consistent implementation of the Buy Indian Act procurement authority across the agencies and to enhance oversight of implementation of the Act at regional offices, the Secretaries of the Interior and Health and Human Services should direct the Bureau of Indian Affairs and Indian Health Service respectively, to include Buy Indian Act contracts as a part of their regular procurement review process.
Closed - Implemented
The Department of the Interior (DOI) has addressed this recommendation. An August 2016 update to DOI's Indian Affairs Manual states reviews of Buy Indian Act contracts must be included as part of the Department's regular procurement review process. DOI also incorporated Buy Indian Act acquisitions into its latest annual review, and a template was developed to guide the reviews of Buy Indian Act acquisitions. This template is included in the update to the DOI Indian Affairs Manual.

Full Report