Federal Contractors Nervous About Indian Tribal Claims for Hospital Costs

December 23, 2013

When the federal government reneged on its agreement to fully compensate the Shoshone-Paiute tribes for running a hospital on the Duck Valley reservation, the Washington contracting world barely noticed.

But after similar contracts were broken with hundreds of other Native American tribes and the debts they were owed snowballed to an estimated $2 billion, federal contractors joined their court battle, alarmed that the practice might eventually ensnare them as well.

Now, more than a year after the U.S. Supreme Court ruled for a second time in favor of the tribes and ordered the government to pay up, the two federal agencies that are on the hook — the Indian Health Service and the Bureau of Indian Affairs — have settled fewer than 1 percent of the claims, agency records show. The Obama administration, meantime, is asking Congress to approve a proposal that would permanently limit how much Native Americans could be paid in the future for certain costs associated with government contracts.

All this has federal contractors on edge again.

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