What is a "638" contract? A review of Public Law 93-638

What does it mean in Indian Country when we say “638 contract” or use it as a verb and say that we will “638 it,” and what does it mean for the associated tribal programs and projects?

The History of Public Law 93-638

Looking back at history, the term “638 contract” or more formally a self-determination contract are shorthand for the Indian Self-Determination and Education Assistance Act (ISDEAA) of 1975 (Public Law 93-638), which has been amended in 1988, 1994 and 2000. This law recognizes that American Indian tribes have an inherent status as sovereign nations, which is distinguished by their relationship with the federal government and this law marked a distinct change in federal policy toward Native American tribes and tribal people. This self-governance policy has been so successful that over 50% of all federal Indian programs are carried out by tribes rather than federal agencies (Strommer and Osborne, 2014).

What Does “638 it” Mean for Programs and Projects?

The signing and passage of the ISDEAA meant Congress understood the inherent right tribes possess to set their destiny through tribally run programs for health care, roads, and any other program operated by the federal government to the benefit of tribal nations. Under the ISDEAA any federal program, function, service, or activity (PFSA) must transfer their operations to tribes upon formal request for the benefit of the tribe. This mandate is legally structured in the form of a contract defined in ISDEAA or a “638 contract.” In some cases, tribes may compact a federal PFSA, which can be a more favorable method for tribes to operate programs, but this requires a more extensive formal request.

So “638-ing it” means transferring the responsibility and funds for a PFSA from the federal government to the tribe. By law the government must give the tribe the same amount of money it spent itself on the PFSA, making this is a simple dollar for dollar transfer. There’s more to it though, tribes are also able to be paid for administrative overhead costs, called contract support costs. These costs include personnel administration, training, and facility support cost, among others. In a nutshell, this overhead brings new revenue to the tribe and allows the tribe to gain experience, develop staff and build its own infrastructure instead of these overhead funds going to federal programs. It allows tribes to manage and control their own assets.

So What Is The Benefit?

There are many benefits to American Indian tribes and Native people by “going 638” and assuming the operations of a PFSA. A few of them are worth mentioning. First, it means a direct link between policy and Indian communities. For too long, programs were operated by far removed federal officials, so when a tribe or its people “638” a PFSA, such as a clinic, it is the local tribal community deciding how to deliver care to its people by operating the facility. For example, if the tribe sees a greater community need in its pharmacy program, it can act to change its pharmacy policy or hire pharmacy staff without having to ask the federal government for permission.

Second, it helps with economic development and the bottom line. Tribes that “638” federal PFSA’s build capacity in their local community through hiring local talent and keeping dollars re-circulating in Native communities many times over and by giving members of the tribe opportunities to work within their communities as professionals or business entrepreneurs. Tribal Nations see increasing success as they operate PFSA’s and share their stories of the benefits their community receive from “going 638.”

Lastly, you don’ have to go it alone. Please review our blog post on selecting an Owner’s Advisor then contact Melvin Consulting by clicking the learn more button below to see how 638 contracting can benefit your community and how we are “Advancing Your Vision from Concept to Concrete”.

The opinions expressed in this post are the authors own and does not reflect the view of Melvin Consulting PLLC

Geoffrey D. Strommer & Stephen D. Osborne, The History, Status, and Future of Tribal Self-Governance Under the Indian Self-Determination and Education Assistance Act, 39 Am. Indian L. Rev. 1 (2014), https://digitalcommons.law.ou.edu/ailr/vol39/iss1/1