The Buy Indian Act: A Work in Progress

thumbnail environmentAmerican Indians and Alaska Natives have a unique legal and political relationship with the federal government that gives the government responsibility for protecting and improving tribal interests. For Native American Heritage Month, we’re taking a look at one law meant to improve economic opportunities for Indian-owned businesses: the Buy Indian Act.

More than 100 years old and still evolving

The Buy Indian Act was signed into law on June 25, 1910, reading, in part:

So far as may be practicable Indian labor shall be employed, and purchases of the products…of Indian industry may be made in open market at the discretion of the Secretary of the Interior.

This was supposed to help Indian-owned businesses by letting certain federal agencies buy goods and services from them without using the normal competitive process. The act applied initially to the Department of the Interior’s Bureau of Indian Affairs. In 1955, the Department of Health and Human Services’ Indian Health Service was added.

Yet the act itself is short on details. In fact, the entire thing is just 44 words.
It wasn’t until 2013—more than 100 years later—that Interior finalized the rules, regulations, and actual processes for buying from Indian-owned businesses. HHS had enacted similar regulations for the Indian Health Service in 1975.

Small use of a small act

Neither the Bureau of Indian Affairs nor the Indian Health Service is using the Buy Indian Act much. In fact, items bought under the act make up a small sliver of what the agencies agree to spend in contracts every year. Though, both agencies do use other means to purchase goods and services from Indian-owned businesses.

GAO-15-588(Excerpted from GAO-15-588)

Moreover, the Bureau of Indian Affairs and the Indian Health Service don’t really know how effectively they’re using the law. For example, they both require that contractors maintain their Indian-owned status to some degree and that at least half of subcontracts go to Indian firms.

However, headquarters for both the Bureau of Indian Affairs and the Indian Health Service don’t collect data to ensure these and other requirements are actually being met. Regional offices handle most of these parts of Buy Indian Act contracts, and neither agency’s headquarters collect data on these requirements from their regional offices.

The Buy Indian Act has been around for more than a century but its implementation is clearly still a work in progress. We have made half a dozen recommendations to help fulfill the act’s purpose of promoting, supporting, and expanding economic development of tribal entities and their individual members.


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