Native Organization Seeks Supreme Court Review on Contract Payment Disputes

The Arctic Slope Native Association is waiting to hear whether the U.S. Supreme court will review a case involving underfunded contract payments between tribally ran medical facilities and the Indian Health Service.

At issue are two circuit court decisions that are in direct opposition. The 10th Circuit court in Denver found earlier this spring in a similar lawsuit over nonpayment of IHS contracts, that a government contractor that has satisfied its contract but is not fully paid, should have legal remedy against the government. The DC Federal Circuit court disagreed, essentially saying, if the federal government does not pay its bills, contractors can’t sue for damages. Attorney Lloyd Miller is handling the case for the Arctic Slope Native Association or ANSA. He says the IHS never asks congress for enough money to fully fund the contracts they award to tribes. For fiscal year 2012, IHS has contracted for $615 million but is seeking $465 million in appropriations.

“That’s not right, they know it, they know what’s going on, the president in the president’s budget, they tell congress straight up, in an honest way, we know this is not enough, we know the total requirement is $615 million, we also know that we’re not requesting $615 million and then they ask for congresses blessing to pay less. This is nuts,” Miller said.

Although Miller says that tribes are the only federal contractors that get short funded, other businesses that contract with the federal government are worried about the conflicting decisions. So much so that the Chamber of Commerce of the United States and the National Defense Industrial Association have filed briefs supporting ANSA’s Supreme court request seeking clarity. Miller says it’s unusual for support briefs to be filed before the court has even agreed to hear the case, but he says it’s an indication of how worried government contractors nationwide are about what the decision could be.

“Because the Federal circuit, that made the decision we’re talking about is the circuit that hears almost all government contract appeals. So if that court got it wrong, as the contractors are concerned they did, it means a whole new regime for government contractors in the country and that’s not an acceptable outcome for them,” Miller said.

Secretary of Health and Human Services Kathleen Sebelius was in Alaska last month. When asked about IHS contract underfunding, she said historically that has been the case, contract services have not been adequately funded.

“And I think there’s no question that the US, historically has never lived up to its treaty agreements. What has happened in this administration is a significant effort to close that gap. We’re still not there,” Sebelius said.

But she says progress has been made, pointing to IHS funding increases each year since she’s been secretary, even as other agencies have been cut. When asked why congressional requests are less than the contracts the agency has committed to, she says it’s because of the gap that has been in place.

“It still doesn’t meet, there was such a huge unmet need, so it’s one of the agencies out of the 11 under the umbrella of health and human services that has had an increase, all three years, but that increase is not enough to make up the historic gap. We’re trying to make up for a lot of lost time,” Sebelius said.

Attorney Lloyd Miller says if the government is running out of money with other federal contractors, such as defense businesses who provide food services or security, they ask congress for a supplemental appropriation. He says this is what should happen with the tribal organizations that are running hospitals in Oklahoma or Alaska.

“But the government never does it, not once in 25 years has the government gone to congress and requested a supplemental appropriation to pay the contracts in full. Not once,” Miller said.

Officials with the Arctic Slope Native Association did not respond to repeated requests for comment. It will likely be October before Supreme Court justices announce whether they will review the case where two different courts of appeals have come to two diametrically opposed answers on the same question.

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Lori Townsend is the News Director for the Alaska Public Radio Network. She got her start in broadcasting at the age of 11 as the park announcer of the fast pitch baseball games in Deer Park, Wisconsin. She has worked in print and broadcast journalism for more than 24 years. She was the co-founder and former Editor of Northern Aspects, a magazine featuring northern Wisconsin writers and artists. She worked for 7 years at tribal station WOJB on the Lac Courte Oreilles Ojibway Reservation in Wisconsin, first as an on-air programmer and special projects producer and eventually News Director. In 1997 she co-hosted a continuing Saturday afternoon public affairs talk program on station KSTP in St. Paul, Minnesota. Radio brought her to Alaska where she worked as a broadcast trainer for Native fellowship students at Koahnic Broadcasting. Following her work there, she helped co-found the non-profit broadcast company Native Voice Communications. NVC created the award-winning Independent Native News as well as producing many other documentaries and productions. Townsend was NVC’s technical trainer and assistant producer of INN. Through her freelance work, she has produced news and feature stories nationally and internationally for Independent Native News, National Native News, NPR , Pacifica, Monitor Radio, Radio Netherlands and AIROS. Her print work and interviews have been published in News from Indian Country, Yakama Nation Review and other publications. Ms. Townsend has also worked as a broadcast trainer for the Native American Journalist’s Association and with NPR’s Doug Mitchell and as a freelance editor. Townsend is the recipient of numerous awards for her work from the Alaska Press Club, the Native American Journalists Association and a gold and a silver reel award from the National Federation of Community Broadcasters. Townsend was the recipient of a Fellowship at the Metcalf Institute for Marine and Environmental Reporting in Rhode Island as well as a fellowship at the Knight Digital Media Center in Berkeley. She is an avid reader, a rabid gardener and counts water skiing, training horses, diving and a welding certification among her past and current interests. ltownsend (at) alaskapublic (dot) org  |  907.550.8452 | About Lori