Indian Preference in Engineering & Construction Projects I

Indian Preference in Engineering & Construction Projects
Part I: Vendor Preference

Submitted to AZRE Magazine, May 21, 2013
By Roger Owers, Ph.D., P.E., J.D.

As a sovereign nation, an Indian Tribe has the general power to create and enforce its own rules to govern activities within the Tribe’s jurisdiction.  In this two-part series, we will look at one set of such rules: the preferential treatment of Indians in contracting and in employment.  In this first article, we will look at Indian preference in the context of vendor selection.  The second article will examine Indian preference in the context of employment.  The emphasis in both articles will be on Indian preference as applied in the engineering & construction industry.

Indian preference in vendor selection gives Indian-owned vendors preferential treatment when the Tribe or funding agency is awarding contracts.

If an outside funding source is funding the project (such as the federal government), then the funding agency’s rules typically (but not always) will govern the preference.  However, if Tribal money is funding the project, which is quite common, then the Tribe’s preference rules will typically govern the vendor selection.

There is no “one size fits all” rule for how Tribes use Indian preference in vendor selection.  Because each Tribe is free to establish its own rules for vendor selection, there is variety among Tribes for how this is done.  A Tribe does not have to have an Indian preference policy.  But for those that do, three common elements of Indian preferential treatment in vendor selection can be found.

First, the Tribe can restrict the competition to only Indian-owned businesses.  In this method, the Tribe certifies such businesses after an application process and then allows only those certified businesses to compete.  Second, the Tribe can allow any business to compete, but Indian-owned businesses can be awarded the contract if their bid is within a certain percentage of the low bid from the non-Indian owned business.  This element is often used in the award of construction contracts based solely on price.  Third, a business can be awarded a higher number of points in a proposal if they are Indian-owned.  This element is often used in the selection of architects and engineers.

Some Tribes have no formalized preference policy in place, choosing to deal with it in an informal, relationship-based approach. But other Tribes have in place a written and published procurement policy that details their Indian preference rules.  Tribes that follow such formal policies include the Salt River Pima-Maricopa Indian Community, the Navajo Nation, the Colville Tribes, and the Salish and Kootenai Tribes, to name but a few.

When considering how to approach a potential business opportunity in Indian Country, it is important to understand if and how the policy of Indian preference in selecting the vendor is applied.  Each Tribe can have its own unique set of rules, which may or may not be influenced by an outside funding agency.  Such rules will apply in the Tribe’s selection of the vendor, whether a contractor, architect, engineer, or other business or professional.

This article is intended for general information only.  It should not be construed as legal advice with respect to any particular situation.  Readers should not act upon information contained in this article without first consulting their lawyer.

Roger S. Owers is a commercial real estate professional with Keyser LLC and is a lawyer with the Kaibab Law Offices of Roger S. Owers LLC.  Roger holds a Ph.D. in civil engineering, is a registered professional civil engineer, holds a real estate license, and is a licensed attorney.  He can be reached via e-mail at rowers@kaibabllc.com or www.kaibabllc.com.  He can also be found on LinkedIn at http://www.linkedin.com/in/rogerowers/.

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