The analysis mentions several substantive matters

which are among those under study. One of these is a deficiency in contract rescission regulations regarding rescission for violation of rights or gross negligence or mismanagement. We felt that the technical assistance provided under Section 36.232 would be applicable. However, we agree that the availability of technical services should have been specifically cited and we are making that correction.

Another area discussed in the analysis is the proce-
dures for contract change. Section 106 (d) of the

Act calls for consent by the tribal contractors to
IHS initiated changes, but clause 13 contains no
Our approach was that adequate

such provision.

protection was built in for both parties, but this

was not clear.

Therefore, clause 13 is being revised

to clarify the protections for both parties.

A third issue is a requirement in the grant regulations that the legally established organizations of Indians be nonprofit (Section 36.102(d)), whereas the contract regulations (Section 36.204 (i)) do not require this. It is our intention to amend the regulation to make grants awardable to any tribe or tribal organization regardless of whether it is a profit making entity.

This brings me to an issue that has been raised not just in the analysis, but in the public comments we have received and in the testimony before you. While there has been a significant amount of cooperation between our staff and that of the Bureau of Indian Affairs of the Department of the Interior, the regulations issued by our respective Departments are not sufficiently similar. To be frank, this has resulted simply from different draftsmen working within different organizations, each striving to produce an end-product in keeping with their customary standards. We now realize that what is needed above all is uniformity wherever possible, that is, in every situation where programmatic differences do not require that distinctions be made. This need for uniform language and organization is of great importance because the Indian tribes seeking to benefit from the Act should not be burdened with the problem of reading different texts to derive basically the same information about closely related problems, nor should they have to trace cross-referenced material where this could be avoided. Thus, we intend to overcome these obstacles as soon as possible, and we have asked the Bureau of Indian Affairs to cooperate with us in this endeavor.

Conclusion

Mr. Chairman, this concludes my remarks this morning.
My colleagues and I will be pleased to try to answer

any questions which you or other members of the
Subcommittee may have.

Senator BARTLETT. Mr. Commissioner, we welcome you to the hearings.

STATEMENT OF HON. MORRIS THOMPSON, COMMISSIONER OF INDIAN AFFAIRS, ACCOMPANIED BY HON. HARLEY FRANKEL, DEPUTY COMMISSIONER, BIA; REID CHAMBERS, ASSOCIATE SOLICITOR, DIVISION OF INDIAN AFFAIRS, INTERIOR DEPARTMENT; RALPH REESER, CONGRESSONAL AND LEGISLATIVE AFFAIRS STAFF, BIA; LAFOLLETTE BUTLER, PUBLIC LAW 638 IMPLEMENTING TASK FORCE, BIA; PETER CAMPANELLI, PUBLIC LAW 638 IMPLEMENTING TASK FORCE, BIA; DONALD ASBRA, CONTRACTING STAFF, BIA; AND JUSTIN PATTERSON, ASSISTANT SOLICITOR, PROCUREMENT, INTERIOR DEPARTMENT

Commissioner THOMPSON. Thank you, Mr. Chairman. We have a full prepared statement but in deference to the committee, I will only highlight my statement.

Mr. Chairman and members of the subcommittee, it is with pride and pleasure that I appear before you today to report on the implementation of the Indian Self-Determination and Education Assistance Act by the Interior Department and the Bureau of Indian Affairs.

I am mindful of the historic significance of this act as potentially the most important legislation affecting both Federal-Indian relationship and the development of tribal government since the passage of the Indian Reorganization Act of 1934.

The Indian Self-Determination and Education Assistance Act recognizes and respects the right of Indian tribes to direct their own destinies while at the same time preserving their special rights and special relationships with the U.S. Government.

As Secretary Ottina so ably pointed out, we work very closely with the HEW in both working with Indian tribes to solicit their comments, to inform them of the regulations, and consult with them on draft regulations. I won't go into great depth; I think this was amply covered by him.

I would also like to mention we have had excellent cooperation from congressional staffs through the entire course of the regulation formulation process concerning interpretations of finer points in the legislation. This advice has helped us considerably in assuring adequate sensitivity of the regulations to congressional intent.

Let me take a moment to review the key concept which influenced our frame of reference in developing the regulations.

First: In response to the requests of Indian leaders, our regulations were developed in one comprehensive package to facilitate their use. Thus, the regulations provide a complete picture of the options and opportunities available to tribes under the legislation, and the procedures which must be followed to take advantage of these opportunities.

Second: Pursuant to legislative intent, the regulations recognize the key role of tribal governing bodies as representatives of the Indian people and as decisionmakers in the self-determination process. In addition, the regulations are designed to maximize the applicability of existing tribal processes rather than prescribing new processes that might be in conflict with tribal practices.

Specifically, with regard to the contract provisions, we focused on five issues:

One: Since the legislation directs the Secretary to contract, it has created, in effect, a presumption of tribal entitlement to contract. Thus, the burden of proof in declining to contract is on the Department and only certain limited grounds for declining are authorized by the act. The regulations explicitly recognize the burden-of-proof principle, and substantial evidence is required if the Department is to meet that burden.

Two: We have gone beyond the specific requirements of the legislation that technical assistance be provided or made available when declination actually occurs. It is our belief that, to the extent possible declination should be avoided since it is inconsistent with the intent and spirit of the act. Therefore, the regulations require the Bureau to provide technical assistance to tribal organizations seeking to contract throughout the preapplication and application process.

Three: Recognizing tribal concerns, and in line with specific provisions of the act recognizing the Secretary's continuing responsibility to the Indian people in the area of trust resources, the regulations specifically prohibit contracting where the delegation to a tribe or termination of a trust responsibility would be involved.

Four: Specific parts of the Federal procurement regulations that are not consistent with the purposes of the legislation have been prewaived in the regulations. Thus, many burdensome requirements will not fall on the tribal organizations designated by tribes to take over the programs or services under contracts with the BIA.

The regulations give each tribe the right to plan, redesign and operate BIA programs and services which affect the lives of its people to assure that the programs and services reflect tribal needs, goals, and cultural values. Tribes will also be able to plan programs which the Bureau will operate in the manner which the tribe desires.

Even in a situation where a tribe determines that its best course of action is to retain the BIA as program administrator without changing that program, the tribe will have exercised its right of self-determination option under the act. The regulations recognize a tribal decision not to contract a program to be as much an exercise of a tribe's selfdetermination as a decision to contract. The important thing is that the BIA is not the sole determinant of programs and services provided to Indian tribes.

We have also endeavored to deal in the regulations with one of the most repeated concerns raised by a number of Indian tribes and organizations which grows from their prior experience in dealing with the U.S. Government; that is, the fear that the Self-Determination Act could some day lead to termination of their special rights and trust relationships with the Federal Government. Accordingly, based on the declarations in sections 3(b) and 110 of the act, we have built a number of safeguards into the regulations.

First: In line with section 106 (d) of the act, the regulations contain a definitive procedure for retroceding a contracted program or service should a tribe wish to do so for any reason. The procedures for BIA reassumption of retroceded programs are spelled out. It should also be noted that tribes are given a full participatory role in determining how the Bureau will operate the retroceded program or service.

In addition, we have made provisions for a "position ceiling bank" for use in conjunction with retroceded programs. Should any contracted programs or services be retroceded by tribes, this position ceiling bank will assure that BIA personnel slots will be available from which the Bureau can immediately draw to provide for the personnel required to operate the retroceded programs or services.

Second: We have distinguished in the regulations between the essential trust responsibilities which should remain solely under the Bureau's control, and trust-related activities. While sections 106(f) and 110 of the act clearly provide that the Secretary of Interior retains all his trust responsibilities, the regulations do provide for the contracting of certain functions related to the trust responsibilities in the area of natural resources.

For contracts involving such trust-related activities, tribes would have to demonstrate that the proposed contract would not weaken the Bureau's trust responsibility. Where a proposed contract would vitiate the Secretary's role as trustee, we will decline to enter into the contract.

Third: The regulations contain stipulations which prohibit us from reducing services to tribes as a result of increased contracting with other tribes. No tribe shall be penalized if it chooses to not contract for the operation of any program or service.

Title II of Public Law 93-638 amended the Johnson-O'Malley Act as it relates to contracting for Indian education activities. The major amendment legislatively mandates the important-and expandedrelationships, roles, rights, and responsibilities of the local Indian education committees. These committees of Indian parents have performed admirably. This act and its regulations support and strengthen the committees' collective efforts for the future.

The Congress and the Bureau have been sensitive to the desires of tribal organizations in providing educational alternatives to Indian children apart from Federal, public, and mission schools. We recognize the desirability of tribally controlled and operated schools as a viable learning system in meeting the diverse needs of students. Diversity is the key to excellence in learning and Indian people have a long and commendable history in teaching their children. Under title II and the implementing regulations, the Bureau is authorized to support their efforts, both in terms of operational support and in the construction of sorely needed school facilities.

Title II also provides the Bureau of Indian Affairs with a mandate. from the Congress to support Indian-related public school constructions needs as an adjunct to the HEW program under Public Law 81-815. In line with title II, the regulations provide that this new program will be carried out in cooperation with the Secretary of Health, Education, and Welfare and the tribal bodies affected.

We have submitted to the Congress two research studies which were required under section 203 of the act. Funded by the Bureau, these studies were conducted by Indian professional groups. Let me touch briefly on their findings as they have bearing on the directions that the Bureau and the Congress need to consider for the future.

The National Indian Education Association conducted an indepth analysis of the Johnson-O'Malley aid-to-public school program and the relationships between it and other Federal education assistance.

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