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News Release


Release No: 109-97
March 07, 1997


The Director of the Office of Small and Disadvantaged Business Utilization (SADBU) in the Department of Defense wants contractors to know that the DoD has two programs specifically intended to assist Indian-owned economic enterprises and Indian organizations.

SADBU director Robert L. Neal, Jr. describes the initiatives as The Indian Incentive Program and the program that allows Credit Toward Meeting Small Disadvantaged Business (SDB) Subcontracting Goals for Work Performed on Indian Lands or by a Qualifying Joint Venture. Based on queries that we have received and the lack of requests for incentive payments, Neal said, it appears that the existence of these two programs is not widely known. Moreover, where the programs are known to exist, they are not well understood.

As outlined in the Federal Acquisition Regulation, the Indian Incentive Program provides for the payment of five percent of the amount subcontracted to an Indian organization or Indian- owned economic enterprise, when authorized under the terms of the contract. Subject to the availability of funds, DoD contracts that contain a requirement for the submission of a small, small disadvantaged, and women-owned small business subcontracting plan are eligible for incentive payments under the program. These type of contracts require contractors to use their best effort to give Indian organizations and Indian-owned economic enterprises the maximum practicable opportunity to participate in subcontracts.

Under the Indian Incentive Program, contracting officers can authorize an incentive payment of five percent of the amount paid to subcontractors that are Indian organizations or Indian-owned economic enterprises. The fiscal year 1997 Appropriations Act makes $8 million available for incentive payments to prime contractors.

The second DoD program that should be noted by contractors is the Credit Toward Meeting Small Disadvantaged Business (SDB) Subcontracting Goals for Work Performed on Indian-Owned Lands or by a Qualifying Joint Venture. As provided for in Title 10, USC 2323a, SDB subcontracting goal credit is given for the value of work performed under a DoD prime contract or subcontract on Indian owned lands when not less than 40 percent of direct workers are Indians. Credit may also be allowed if the prime contractor or subcontractor has an agreement with the tribal government that provides goals for training and development of the Indian workforce and management.

Under this program, DoD prime and subcontractors also are given SDB subcontracting goal credit for contracts and subcontracts performed by a joint venture of which at least 50 percent is owned by an Indian tribe. Credit also is given when a tribally owned corporation manages the performance of the contract or subcontract. The amount of credit allowed for contracts and subcontracts performed by a qualifying joint venture is equal to the contract or subcontract amount multiplied by the percent of the tribe's or tribally-owned corporation's ownership interest in the joint venture.

Additional information on the DoD programs described in this press release may be obtained from Mr. Ivory Fisher in the SADBU office at (703) 697-1688.

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