52.226-1 Utilization of Indian Organizations and Indian-Owned Economic Enterprises
Source: FAR 52.226-1 on acquisition.gov
Contractors can receive a 5% incentive for subcontracting with eligible Indian organizations, but must maximize opportunities, follow verification procedures, and request adjustments before contract completion.
Overview
FAR 52.226-1 requires contractors to maximize opportunities for Indian organizations and Indian-owned economic enterprises to participate in subcontracts. The clause defines key terms and establishes procedures for verifying eligibility, handling challenges, and requesting incentive payments under the Indian Incentive Program. Contractors may receive a 5% adjustment to their contract value for subcontracts awarded to eligible Indian entities, provided they follow the specified procedures and timelines.
Key Rules
- Definitions and Eligibility
- Clearly defines Indian, Indian organization, Indian-owned economic enterprise, Indian tribe, and interested party for the purposes of this clause.
- Best Efforts Requirement
- Contractors must use their best efforts to provide maximum practicable subcontracting opportunities to Indian organizations and Indian-owned economic enterprises.
- Reliance and Challenge Process
- Contractors and Contracting Officers may rely on self-representations unless challenged; challenges are resolved by the Bureau of Indian Affairs (BIA).
- Incentive Payment Procedures
- Contractors may request a 5% contract adjustment for eligible subcontracts, but must prove the amount and request the adjustment before contract completion.
- Payment Authorization
- The Contracting Officer authorizes incentive payments, subject to contract terms and available funds.
Responsibilities
- Contracting Officers: Verify eligibility, handle challenges, and authorize incentive payments.
- Contractors: Maximize subcontracting opportunities for Indian entities, request incentive payments properly, and provide proof of amounts claimed.
- Agencies: Ensure funding is available for incentive payments and follow agency procedures.
Practical Implications
- This clause incentivizes contractors to engage Indian organizations and enterprises, supporting federal socio-economic goals.
- Contractors must be proactive in outreach and documentation to benefit from the incentive program.
- Delays or disputes over eligibility can impact incentive payments, so timely and accurate record-keeping is essential.
As prescribed in 26.104 , insert the following clause:
Utilization of Indian Organizations and Indian-Owned Economic Enterprises (June 2000)
(a) Definitions. As used in this clause:
Indian means any person who is a member of any Indian tribe, band, group, pueblo, or community that is recognized by the Federal Government as eligible for services from the Bureau of Indian Affairs (BIA) in accordance with http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title25-section1452(c)&num=0&edition=prelim" target="_blank">25 U.S.C. 1452(c) and any "Native" as defined in the Alaska Native Claims Settlement Act (http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title43-section1601&num=0&edition=prelim" target="_blank">43 U.S.C. 1601).
Indian organization means the governing body of any Indian tribe or entity established or recognized by the governing body of an Indian tribe for the purposes of 25 U.S.C., Chapter 17.
Indian-owned economic enterprise means any Indian-owned (as determined by the Secretary of the Interior) commercial, industrial, or business activity established or organized for the purpose of profit, provided that Indian ownership constitutes not less than 51 percent of the enterprise.
Indian tribe means any Indian tribe, band, group, pueblo, or community, including native villages and native groups (including corporations organized by Kenai, Juneau, Sitka, and Kodiak) as defined in the Alaska Native Claims Settlement Act, that is recognized by the Federal Government as eligible for services from BIA in accordance with http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title25-section1452(c)&num=0&edition=prelim" target="_blank">25 U.S.C. 1452(c).
Interested party means a prime contractor or an actual or prospective offeror whose direct economic interest would be affected by the award of a subcontract or by the failure to award a subcontract.
(b) The Contractor shall use its best efforts to give Indian organizations and Indian-owned economic enterprises (http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title25-section1544&num=0&edition=prelim" target="_blank">25 U.S.C. 1544) the maximum practicable opportunity to participate in the subcontracts it awards to the fullest extent consistent with efficient performance of its contract.
(1) The Contracting Officer and the Contractor, acting in good faith, may rely on the representation of an Indian organization or Indian-owned economic enterprise as to its eligibility, unless an interested party challenges its status or the Contracting Officer has independent reason to question that status. In the event of a challenge to the representation of a subcontractor, the Contracting Officer will refer the matter to the U.S. Department of the Interior Bureau of Indian Affairs (BIA) Attn: Chief, Division of Contracting and Grants Administration 1849 C Street, NW, MS-2626-MIB Washington, DC 20240-4000.
The BIA will determine the eligibility and notify the Contracting Officer. No incentive payment will be made within 50 working days of subcontract award or while a challenge is pending. If a subcontractor is determined to be an ineligible participant, no incentive payment will be made under the Indian Incentive Program.
(2) The Contractor may request an adjustment under the Indian Incentive Program to the following:
(i) The estimated cost of a cost-type contract.
(ii) The target cost of a cost-plus-incentive-fee prime contract.
(iii) The target cost and ceiling price of a fixed-price incentive prime contract.
(iv) The price of a firm-fixed-price prime contract.
(3) The amount of the adjustment to the prime contract is 5 percent of the estimated cost, target cost, or firm-fixed-price included in the subcontract initially awarded to the Indian organization or Indian-owned economic enterprise.
(4) The Contractor has the burden of proving the amount claimed and must assert its request for an adjustment prior to completion of contract performance.
(c) The Contracting Officer, subject to the terms and conditions of the contract and the availability of funds, will authorize an incentive payment of 5 percent of the amount paid to the subcontractor. The Contracting Officer will seek funding in accordance with agency procedures.
(End of clause)