(CN) – The Department of Health and Human Services may owe more than $2.6 million in contract shortfalls demanded by an Alaskan Native American group, the Supreme Court ruled Monday.
The justices took up the case and summarily reversed in light of a decision last week that the government is liable for contract-support costs promised under the Indian Self-Determination and Education Assistance Act (ISDA). Congress has capped the appropriations since 1994 at a level well below the sum total.
In the related case Monday, Arctic Slope Native Association (ASNA) sued Kathleen Sebelius, secretary of Health and Human Services, for withholding funding in 1999 and 2000 because of the cap. The group argued that the funds could have been awarded if the different tribes of the region sued separately.
Though the secretary paid approximately $1.29 million for fiscal year 1999 and approximately $3 million for fiscal year 2000, ASNA says she should have covered the shortfall, in this case the difference between the amount of support costs specified in the annual funding agreement and ASNA’s actual expenditures.
Sebelius argued that Congress had stipulated the appropriations were “not to exceed” annual funding agreements. Paying the shortfall would reduce funds for programs serving other tribes, she claimed.
The Federal Circuit agreed, but that decision now conflicts with high court precedent.
Justice Sonia Sotomayor wrote last week that resolution lies with Congress.
“When an agency makes competing contractual commitments with legally available funds and then fails to pay, it is the government that must bear the fiscal consequences, not the contractor,” according to that majority decision.
The Arctic Slope is one of 12 regions named in the 1971 Alaska Native Claims Settlement Act. It spans an area larger than Washington state and is the largest municipality in the United States.