As implemented, Interior’s  BIA may use the Buy Indian Act procurement authority. BIA and IHS may use the  Buy Indian Act to give preference to Indian-owned businesses when  acquiring supplies and services to meet agency needs and requirements. Both BIA and IHS Have Buy Indian Act Policies in Place, but Insight into Implementation by Regional Offices is Limited

BIA and IHS have policies and procedures in place to implement the Buy  Indian Act and to help ensure contractors’ compliance with key  requirements. Although these regulations are in place, headquarters officials at both  agencies reported limited insight into implementation of these regulations  at their regional offices because they do not collect data concerning the  Buy Indian Act from regional offices, nor does either agency have a  specific review of Buy Indian Act contracts included in its regular  procurement review process. A modified  version of these regulations was later incorporated into the  Department of Health and Human Services Acquisition Regulation. Both agencies’ implementing regulations impose key requirements on  contractors. First, both agencies require eligible firms to be 51 percent  Indian-owned. Second, firms awarded a contract under the Buy Indian Act  must give preference to Indians in employment and training opportunities  under the contract, and to Indian firms in the award of any subcontracts. Specifically, both  agencies’ regulations require that firms awarded a contract under the Buy  Indian Act be at least 51 percent Indian owned, provide a preference to  Indians in employment, training, and subcontracting, and not subcontract  more than 50 percent of the work to other than Indian firms. Both BIA and IHS Rely on Self- Certification of Indian-Owned Status

Both agencies rely on firms to self-certify their status as Indian-owned. IHS handles  challenges according to the protest procedures set out in the Federal  Acquisition Regulation. A Small Percentage of BIA and IHS Obligations Go Towards Acquiring Various Goods and Services through the Act

Use of the Buy Indian Act comprises a small percentage of BIA and IHS  contract obligations. However, both agencies also award contracts to  Indian-owned firms using other authorities, thus increasing the  percentage of obligations awarded to Indian-owned firms. Without knowledge of how the regions are  implementing requirements related to the Act, both agencies may be  missing opportunities to improve use of the Act. Such  information could help ensure that both agencies are maximizing the  benefits intended in terms of the growth and development of Indian  industries. Recommendations for Executive Action

To ensure consistent implementation of the Buy Indian Act procurement  authority across the agencies and to enhance oversight of implementation  of the Act at regional offices, we recommend that the Secretaries of the  Interior and Health and Human Services direct the Bureau of Indian  Affairs and Indian Health Service respectively, to take the following three  actions:  (1) clarify and codify their policies related to the priority for use of the Buy  Indian Act, including whether the Buy Indian Act should be used before  other set-aside programs;  (2) collect data on regional offices’ implementation of key requirements,  such as challenges to self-certification; and  (3) include Buy Indian Act contracts as a part of their regular procurement  review process. We are sending copies of this report to interested congressional  committees; the Secretary of the Interior; and the Secretary of Health and  Human Services.
Why GAO Did This Study

The Buy Indian Act of 1910 and agencies' implementing regulations allow Interior's BIA and the Department of Health and Human Services' IHS to award federal contracts to Indian-owned businesses without using the standard competitive process. Among other requirements, eligible firms must be at least 51 percent Indian-owned and give preference to Indians in employment, training, and subcontracting.
GAO was asked to review the implementation of the Buy Indian Act. This report identifies (1) the policies and procedures at BIA and IHS to implement the Act; and (2) the funds obligated by BIA and IHS using the Buy Indian Act procurement authority.
GAO reviewed the Buy Indian Act, the Federal Acquisition Regulation, and agency policies and regulations. GAO also analyzed data from the Federal Procurement Data System-Next Generation on BIA and IHS's contract obligations under the Act between fiscal years 2010 and 2014 and met with agency officials.

What GAO Found

The Department of the Interior's (Interior) Bureau of Indian Affairs (BIA) and the Department of Health and Human Services' Indian Health Service (IHS) have requirements in place to implement the Buy Indian Act. Through supplements to the Federal Acquisition Regulation, both BIA and IHS have policies and procedures to implement key requirements:
Indian-owned status . Eligible firms must be 51 percent Indian-owned. The agencies rely on firms to self certify that they are Indian-owned and interested parties may challenge a firm's self-certification.
Indian preference . The agencies require that contractors give preference to Indians in employment and training opportunities, and use a contract clause to implement this requirement.
Subcontracting . The agencies require contractors to give preference to Indian firms in the award of any subcontracts.
However, BIA and IHS have limited insight into implementation of the Buy Indian Act at their regional offices, where the contracts are generally awarded. For example, officials at both agencies' headquarters had little knowledge as to how often challenges to self-certifications of Indian-owned status occur on contracts awarded at the regional offices. Neither agency collects data from regional offices on use of the Buy Indian Act, and neither agency includes a specific review of Buy Indian Act contracts in its regular procurement review process. Therefore, the agencies may be missing opportunities to maximize the intended benefits of the Act in terms of growth and development of Indian firms.
Use of the Buy Indian Act comprises a small percentage of the two agencies' annual contract obligations. However, these agencies also award contracts to Indian-owned firms using other authorities, thus increasing the percentage of obligations awarded to Indian-owned firms.

What GAO Recommends

GAO recommends, among other things, that Interior and Health and Human Services enhance their oversight of execution of the Act at regional offices by collecting additional data on key requirements and including Buy Indian Act contracts in procurement reviews. Interior and Health and Human Services agreed with GAO's recommendations.