On January 13, 2022, the U.S. Department of Health and Human Services (HHS) issued a Final Rule amending regulations under the Health and Human Services Acquisition Regulation (HHSAR), which supplements the Federal Acquisition Regulation (FAR), that implement the Buy Indian Act (BIA). BIA gives the Indian Health Service (IHS) - an agency within HHS that provides health care to American Indians and Alaskan Natives - the authority to set aside procurements for businesses owned and controlled by American Indians and Alaskan Natives. The Final Rule is intended to provide uniform administration procedures that IHS will use in all of its locations to encourage procurement relationships with American Indian and Alaskan Native labor and businesses.
Currently, the regulations implementing BIA, which are found in HHSAR Subpart 326.6, set out the procedures for making a contract award under BIA in four relatively short paragraphs in 326.604 and 326.605. Specifically, 326.604 requires BIA contracts to be subject to competition among American Indian or Alaskan Native firms to the maximum extent practicable and requires a contracting officer to provide a justification and approval when competition is not practicable. 326.604 also requires a contracting officer to synopsize and publicize BIA solicitations. Meanwhile, 326.605 permits a contracting officer to make a BIA award only if it is determined that the contractor will likely perform satisfactorily and will properly complete or maintain the contracted project or function.
The Final Rule replaces Subpart 326.6 in its entirety with new provisions that set out in far greater detail the procedures that contracting officers must follow when making BIA awards. For example, 326.603-1 now requires IHS to use the negotiation authority of BIA to give preferences to Indian Economic Enterprises (IEE’s), with priority given to Indian Small Business Economic Enterprises (ISBEE’s). 326.603-3 describes the deviation procedures IHS contracting officers must follow when they determine that the application of BIA to an acquisition is inappropriate.
Among the other new provisions set forth under Subpart 326.6 are rules concerning acquisitions of commercial items and simplified acquisitions, notices required to be inserted into solicitations for contracts set-aside for IEE’s and ISBEE’s, and the certifications and representations required to be provided to IHS by IEE offerors.
Contractors that may be eligible for the IHS set-asides under the BIA should take special care to familiarize themselves with the new procedures set forth under the Final Rule, which becomes effective March 14, 2022.