In an effort to boost Native American economic development, Congress authorized Federal contracting agencies to encourage the use of Native American owned subcontractors. The Department of Defense (DoD) Indian Incentive Program (IIP) is an example of this. IIP Brochure

The IIP provides a 5% rebate back to the prime contractor on the total amount subcontracted to an Indian-Owned Economic Enterprise or Indian Organization, Alaska Native Corporations and Native Hawaiian Small Business Concerns, in accordance with DFARS Clause 252.226-7001.

Through the generation of subcontracts to the above mentioned entities, the IIP fulfills its purpose as an economic multiplier for Native American communities. Department of Defense (DoD) prime contractors, regardless of size of contract, that contain the appropriate clause(s) are eligible for incentive payments.

Contracting Activities do not need to provide any funding for this program. The Appropriations Act makes $15 million available for incentive payments. If the $15 million of appropriated IIP funds is expended before end of the fiscal year, all complete and eligible IIP requests submitted on time will be rolled over to the next fiscal year.

This program applies to any business with a DoD prime contract or sub-tier contract of over $500,000 who subcontracts to Indian owned firms. (Only one incentive payment per contract allowed.)

The size of the prime or sub-tier contractor is not a factor in determining eligibility; the size of the business may be small or “large”.

The prime may request these clauses be added at any time during the performance of the contract. Prime contractors must formally request the rebate by submitting a letter to the contracting officer along with supporting documentation proving the amount paid to Indian Organizations/Enterprises or Native Hawaiian Small Business Concern

Claims may be submitted if the contract is still open and performance is being made by the Prime. Once approved, the contract is modified to authorize payment of the incentive. When a contract is closed, claims cannot be filed.

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 and management of the subcontractor or supplier cannot constitute less than 51% of the enterprise. (see DFARS 252.226-7001)

 2. Federally Recognized Tribal Enrollment

Native American: The subcontractor or supplier must be owned by a federally recognized tribe or a member of a federally recognized tribe.

Native Alaskan: The subcontractor or supplier must be owned by a “native”, “native village” or “native group” (including corporations organized by Kenai, Juneau, Sitka, and Kodiak) as defined by the Alaska Native Claims Settlement Act.

Native Hawaiian: The owner of the Native Hawaiian-Owned subcontractor or supplier must be a recognized Native Hawaiian as defined by 23 USC 4221(9).

*Native Owners will need to complete self-certification form. Challenges to ownership are processed in accordance with FAR Subpart 26.1 Indian Incentive Program and 26.103 Procedures.

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