United States District Court, D. Alaska
For Southcentral Foundation, an Alaskan corporation, Plaintiff: Lloyd B. Miller, LEAD ATTORNEY, Sonosky, Chambers, Sachse, Miller & Munson, LLP (Anch), Anchorage, AK.
For Yvette Roubideaux, Director, U.S. Indian Health Service, Defendants: Richard L. Pomeroy, LEAD ATTORNEY, U.S. Attorney's Office (Anch), Anchorage, AK.
ORDER RE CROSS-MOTIONS FOR SUMMARY JUDGMENT
Sharon L. Gleason, United States District Judge.
At Docket 44, Plaintiff Southcentral Foundation (SCF) filed a Motion for Summary Judgment. At Docket 48, Defendant Yvette Roubideaux, Director of the Indian Health Service (Defendant or IHS), filed a Cross-Motion for Summary Judgment. IHS filed a single memorandum of law in opposition to SCF's motion and in support of its cross-motion, and SCF filed a reply. For the following reasons, the Court will grant in part and deny in part both motions.
FACTUAL & PROCEDURAL BACKGROUND
This dispute concerns whether the Indian Self-Determination and Education Assistance Act, 25 U.S.C. § 450 et seq. (the ISDA or Act) applies to the funding of the Methamphetamine and Suicide Prevention Initiative (MSPI) and the Domestic Violence Prevention Initiative (DVPI), and whether IHS must provide for direct and indirect contract support costs (CSCs) in addition to any amount included for CSCs in the base funding IHS has provided to SCF for those programs. The dispute concerns one year of funding for the two programs.
I. The ISDA.
The ISDA, enacted in 1975, provides that " [t]he Secretary [of the Department of Health and Human Services (DHHS)] shall establish and carry out a program within [IHS] . . . to be known as the 'Tribal Self-Governance Program' . . . ."  Pursuant to this program, the federal government enters into contracts with Indian tribes, through which those tribes provide programs, functions, services, and activities (PFSAs) that otherwise would have been provided by the federal government. Section 458aaa-4(b)(2)(F) describes the types of PFSAs governed by the Act:
Such [PFSAs] (or portions thereof) include all [PFSAs] (or portions thereof), including grants (which may be added to a funding agreement after an award of such grants), with respect to which Indian tribes or Indians are primary or significant beneficiaries, administered by [DHHS] through [IHS] . . . under the authority of . . . any other Act of Congress authorizing any agency of [DHHS] to administer, carry out, or provide financial assistance to such a [PFSA] (or portions thereof) described in this section that is carried out for the benefit of Indians because of their status as Indians.
With respect to PFSAs, the Act requires that the government provide the " amount of funding that would have been appropriated for the federal government to operate the programs if they had not been turned over to the Tribe" --this portion of funds is
known as the " secretarial amount."  The government must also provide the " full amount" of " contract support costs" (CSCs) incurred by the Indian tribe in performing the contracts. " The Act defines 'contract support costs' as other 'reasonable costs' that a federal agency would not have incurred, but which nonetheless 'a tribal organization' acting 'as a contractor' would incur 'to 'ensure compliance with the terms of the contract and prudent management.'"  The Act further provides that CSCs " shall not duplicate any funding provided" as part of the secretarial amount.
The ISDA provides guidance on how to interpret its provisions. For instance, the Act states that " [e]xcept as otherwise provided by law, the Secretary shall interpret all Federal laws, Executive orders, and regulations in a manner that will facilitate . . . the inclusion of [PFSAs] (or portions thereof) and funds associated therewith, in the agreements entered into under this section."  Moreover, the Act states that " [e]ach provision of this part and each provision of a compact or funding agreement shall be liberally construed for the benefit of the Indian tribe participating in self-governance and any ambiguity shall be resolved in favor of the Indian tribe." 
II. The Initial Congressional Appropriations for MSPI and DVPI.
Congress first appropriated funds for MSPI in fiscal year (FY) 2008. Specifically, in Public Law 110-161, Congress provided:
That $14,000,000 is provided for a methamphetamine and suicide prevention and treatment initiative . . . . Provided further, That notwithstanding any other provision of law, these funds shall be allocated outside all other distribution methods and formulas at the discretion of the Director of [IHS] and shall remain available until expended.
. . .
Provided further, That, notwithstanding any other provision of law, of the amounts provided herein, not to exceed $271,636,000 shall be for payments to tribes and tribal organizations for contract or grant support costs associated with contracts, grants, self-governance compacts, or annual funding agreements between the Indian Health Service and a tribe or tribal organization pursuant to the [the ISDA], as amended, prior to or during fiscal year 2008, of which not to exceed $5,000,000 may be used for contract support costs associated with new or expanded self-determination contracts, grants, self-governance compacts, or annual funding agreements.
In the related House Report, the appropriations committee explained it " expects the Director of [IHS] . . . to distribute this funding outside of the normal formulas
and methodologies to target the areas with the highest needs in Indian Country." 
For FY 2009, Congress again appropriated funds for MSPI, and added funds for DVPI, again to " be allocated at the discretion of the Director of [IHS]," with provisions concerning contract support costs. Appropriations by Congress in later FYs contain similar language. 
III. The IHS Allocation of MSPI and DVPI Funds to SCF in Years Prior to FY 2012.
IHS decided to use a " pilot demonstration project" to distribute the MSPI and DVPI funds through amendments to tribes' existing ISDA contracts. This distribution method was used at the request of the tribes. Funds were to be awarded based on a formula that considered population, poverty burden, and disease burden in the various Indian communities. Prior to receiving MSPI or DVPI funding, tribes were required to submit scopes of work and budgets for the initiatives.
During initial negotiations, IHS made clear that it did not intend ...