WASHINGTON — Oklahoma tribes hope an update to a century-old law will spur tribal economies and create a uniform approach to contracting procedures.
The Buy Indian Act was created in 1910 to set aside government procurement contracts for Indian-owned businesses. The Bureau of Indian Affairs and the Indian Health Service are the sole federal departments to which the act applies. Still, in 2015, the Government Accountability Office reported that only 12 to 15 percent of IHS contracts went to Indian-owned businesses. The report suggested sweeping reform was needed to increase contract opportunities.
Sen. John Hoeven (R-ND) sponsored the Indian Community Economic Enhancement Act of 2020, which amended three federal economic laws. It required the IHS and BIA to create a uniform approach to Buy Indian Act procurement procedures and to “reduce red tape that limits Indian business promotion.” The bill also expanded access to capital for tribes and increased opportunities for Native business promotion.
On Jan. 13, the IHS released its final rule on the Buy Indian Act in response to the BIA’s final rule, which was released in December 2021. The IHS final rule would expand the Buy Indian Act to all construction activities, remove regulatory burdens by allowing Indian economic enterprises to increase subcontracts, remove construction restrictions for these enterprises and clarify the language of the act and its procedures.
Oklahoma tribal leaders say the new regulations and procedures could provide the economic boost they’ve been seeking and energize native businesses.
“These new provisions are a step in the right direction and I believe many tribes, including our business arm, may want to take advantage of the opportunity,” Cherokee Nation Principal Chief Chuck Hoskin Jr. said.
One of the largest updates expands the act to cover all construction activity. This includes construction of health care facilities, personnel quarters, water supply and waste disposal facilities. The final rules by the BIA and IHS also emphasize the commitment to purchasing Native products and hiring Native labor without the typical “competitive process.”
By prioritizing federal contract awards to Indian-owned firms, the Buy Indian Act can fuel job creation and boost economic development across Indian Country,” Hoskin said.
Over the past decade, Cherokee Nation Businesses, which oversees the tribe’s enterprises, generated $728 million. In northeast Oklahoma, the nation and its businesses make an annual economic impact of $2.16 billion. The CNB website states that the tribe is “committed to changing the Oklahoma community through economic growth.”
IHS has estimated that its new rules will generate $200 million in contract opportunities, an estimated $145 million more than last year’s yield of $55.9 million.
Choctaw Nation Chief Gary Batton said he is “pleased with the IHS’s commitment to providing economic opportunities for Indian-owned and controlled businesses.”
The anticipated revenue increase is expected to come from procurement contracts that BIA and IHS will reserve for businesses at least 51 percent owned by tribes and tribal citizens. The new rules from the IHS would also create more opportunities for non-tribal businesses to partner with tribal businesses.
“The Buy Indian Act’s improved regulations will help our Chahtapreneurs (Choctaw business owners) and our tribally-owned businesses to expand and grow, ultimately helping our tribe and its members to thrive,” Batton said.
The Choctaw Nation’s website states that Choctaw businesses “generate hundreds of millions of dollars annually” and “create more than 6,000 jobs for tribal and non-tribal Oklahomans.” The revenue generated by the tribe is dedicated to tribal assistance programs such as health care and education.
In 2020, Harvard researchers estimated that tribes and tribal businesses could lose as much as $50 billion during the COVID-19 pandemic. The pandemic would also put 1.1 million tribal-business workers, native and non-native, at risk of losing their jobs. With the increase in dedicated IHS and BIA Buy Indian contracts, native companies and employees could have a chance to recover from pandemic-related economic losses.
The IHS’s final rule is set to go into effect March 14. The updated policies will allow for collaboration between the IHS and the BIA to effectively enforce the new procedures.