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The Indian Incentive Program (IIP) is a congressionally sponsored program that provides a 5% rebate back to the prime contractor on the total amount subcontracted to an Indian-Owned Economic Enterprise or Indian Organization, in accordance with DFARS Clause 252.226-7001. Through the generation of subcontracts, the IIP serves as an economic multiplier for Native American communities. DoD prime contractors with a contract of $500,000.00 or more, that contain the DFARS clause(s), are eligible for incentive payments.
For Native American businesses, there are two primary requirements that must be met in order to participate in the Indian Incentive Program:
1. 51% Native American/Alaskan/Hawaiian Ownership
Indian ownership of the subcontractor or supplier cannot constitute less than 51% of the enterprise.
2. Federally Recognized Tribal Enrollment
HOW TO PARTICIPATE
If you are interested, but not currently participating in the Indian Incentive Program, we recommend you first:
Native American, Native Alaskan, or Native Hawaiian Organization
Submit proof of tribal enrollment (BIA tribal card, Certificate Degree of Indian Blood (CDIB), Hawaiian birth records) and proof of 51% ownership to the Prime contractor. Alternatively, you may complete and sign the Native American/Alaskan/Hawaiian self-certification form. The form must be completed in its entirety.
Prime Contractors submit requests for Indian Incentive Payments to DoD Contracting Officers. Requests must include the following:
1. Copies of certification of 51% ownership from all eligible subcontractors and copies of certification of tribal, Native Alaskan, or Native Hawaiian enrollment from all eligible subcontractors OR completed self-certification form [DOC]
2. Copies of all eligible subcontractors' invoice receipts. The prime must supply an invoice summary sheet that lists invoices by number and explains the 5% rebate amount.
3. Request letter that:
DoD Contracting Officer
Submit requests to OSD OSBP:
1. Collect, review, and verify documents received from Prime Contractor.
2. Complete funding request letter containing:
OSD OSBP Mailing Address
DoD Office of Small Business Programs
Dr. Ruby Crenshaw-Lawrence, Assistant Director
Department of Defense
Office of Small Business Programs
Office of the Under Secretary of Defense
Acquisition, Technology and Logistics (AT&L)
4800 Mark Center Drive
Suite 15G13 - East Tower
Alexandria, VA 22350
For Information call 571-372-6191
Q: What is the average time frame for receipt of the 5% rebate once you have submitted the paperwork?
A: The average time frame for receipt of the 5% rebate depends on many factors including availability of FY funds, number of requests awaiting funds before yours, incomplete requests (requests lacking Indian-Ownership documentation, tribal affiliation, invoice summary sheet, etc.), and other factors. Due to the recent popularity of the program, it is probable that there will be an extensive wait between request submittal and payment.
Q: If the $15 million of appropriated IIP funds is expended before my request is funded, will I have to resubmit another request?
A: All complete and eligible IIP requests not funded in the fiscal year that they were submitted will be rolled over to the next fiscal year.
Q: Should the Subcontractor, Prime Contractor, or Contracting Officer notify OSBP in advance of making this rebate request to ensure that money is set aside?
A: No. Rebate requests that arrive in the OSBP office are processed on a first-come first-served basis. Incomplete requests will not be processed until all required documentation is received.
Q: Is there a time limit on filing "claims" under the Indian Incentive clause?
A: The Prime may request the insertion of DFAR Clause 252.226-7001 and file for the incentive payment any time during the life of the contract. The present 5% rebate program started in FY97. Claims may go back to that period if the contract is open and performance is being made by the Prime. Once the contract is closed, the claim cannot be filed.
Native American / Alaskan / Hawaiian Subcontractor Questions
Q: I own a Native-American, Native Alaskan, or Native Hawaiian business. Am I eligible to participate in the Indian Incentive Program?
A: If you are a business owner, you must be a member of a federally recognized Native American tribe, as listed in Federal Register: August 11, 2009 (Volume 74, #153, Notices), a "Native" as defined by the Alaska Native Claims Settlement Act 43 USC 1602(b), or Native Hawaiian as defined by 25 USC 4221, Sec 9. You must possess 51% of more ownership of the firm. If there is more than one owner, each eligible Native American/Alaskan/Hawaiian, in combination, must equal 51% or more ownership. If the firm is owned and controlled by a tribe or a native village or native group (including corporations organized by Kenai, Juneau, Sitka, and Kodiak), the "Indian" or "Native" entity must be recognized by the Federal Government as eligible for services from the Bureau of Indian Affairs (BIA) in accordance with 25 USC 1452(c).
Q: If I meet the eligibility requirements for the Indian Incentive Program and want to participate in the program, what should I do next?
A: You should first research potential contractors. You may want to explore research methods for doing business with the Department of Defense. Research current DoD Prime Contractors that might make a good match for your products and services. See recent Contractors who have participated in the Indian Incentive Program. Market your firm well. Be sure to plan ahead and have your certification documents ready (federally recognized tribal /Native Alaskan affiliation and proof of 51% ownership) to submit to your Prime.
Prime Contractor Questions
Q: I am a Prime contractor interested in participating in the Indian Incentive Program. How do I find an eligible Native American, Native Alaskan, or Native Hawaiian subcontractor?
A: See recent participants in the Indian Incentive Program. Check www.ccr.gov and search the Small Business Dynamic Search for Native American owned businesses. Check to see if your company has a Native American liaison officer.
Q: As a Prime contractor, can I subcontract to a Native American business that is a subsidiary of my firm?
A: No. When an entity is attempting to "contract" with itself, or with a subsidiary or a parent corporation, this business arrangement does not qualify for the 5% incentive pay. The legislative framers of the program sought to have Prime contractors who are an "arms length" from a sub-contractor receive an "incentive bonus" to contract with an Indian owned business or Indian organization. Historically, these Prime contractors would not normally subcontract with Indian owned businesses or entities.
Q: What are the qualification requirements for payments of Indian Incentives to DoD contractors, at any tier, that subcontract a portion of their DoD work to eligible subcontractors?
A: Reference 25 USC 1544 authorized a contractor of a Federal Agency under any ACT of Congress an additional amount of compensation equal to 5 percent of the amount paid, or to be paid, to a subcontractor or supplier, in carrying out the contract if such subcontractor or supplier is an Indian organization or Indian-owned economic enterprise as defined in reference FAR 52.226-1. Reference FAR 52.226-1, among other things, expanded the IIP to include Native Hawaiian-owned companies.
Contract Officer Questions
Q: When should the contractor forward payrolls and other paperwork with their request for reimbursement of subcontracting expenses?
A: You can request the 5% rebate any time during the year. However, each request must include a complete period of work with a Month/Year start and Month/Year stop dates. Note, Once the contract is closed, you cannot file the claim.
Q: Should the DoD OSBP or anyone else need to be notified in advance of making this request to ensure money is set aside for the contractors
A: No. Rebate requests that arrive in the OSD OSBP are processed on a first-come first-served basis. However, incomplete requests will not be processed until all required documentation is received.
Q: Some subcontracts do not require the submission of invoices. In this case, would a copy of the subcontract (detailing this process) in conjunction with the copy of the check suffice in lieu of the invoices? If not, what should be done in a case like this?
A: A paper trail with documentation and/or a statement by the Prime that the job was paid by check as well as any other reasonable documentation that will pass an IG inquiry is recommended. Remember, it is the contracting officer who signs the memo, attests to the validity of documents submitted, and is ultimately responsible for this action.
Q: Does the Administrative Contracting Officer (ACO) or the Procurement Contracting Officer (PCO) prepare the documentation for the OSBP Office?
A: Either the ACO or PCO may prepare the documentation for the OSBP office.
Q: When the receipt of payment (fee-funds) takes longer than 14 days, is this subject to the Prompt Payment Act?
A: No, incentive program is not subject to the Prompt Payment Act.