## Facts

- The Cherokee Nation of Oklahoma and the Shoshone–Paiute Tribes entered self-determination contracts with the Indian Health Service under the Indian Self-Determination and Education Assistance Act (ISDEAA) to provide federally funded health services.
- The contracts included annual funding agreements in which the Government promised to pay the Tribes’ “contract support costs” (CSCs), i.e., reasonable administrative and overhead costs necessary to operate the programs.
- For fiscal years 1994–1997, the Government did not pay the full CSC amounts specified in the contracts, asserting that appropriations were insufficient to cover all tribes’ CSC obligations nationwide.
- Congress annually appropriated amounts exceeding the sums at issue, and the relevant appropriations contained no statutory restriction specifically limiting payment of the disputed CSCs.
- In the Cherokee Nation matter, the Interior Board of Contract Appeals awarded damages and the Federal Circuit affirmed.
- In the Shoshone–Paiute matter, the district court and Tenth Circuit rejected the Tribes’ breach-of-contract claim based on the asserted lack of available funds.
- The Supreme Court consolidated the cases to resolve the conflict between circuits.

## Issues

1. Whether the Government is legally bound to pay CSCs promised in ISDEAA self-determination contracts when Congress appropriated sufficient unrestricted funds overall, but the agency claims the funds were inadequate to satisfy all CSC obligations nationwide.
2. Whether an agency may avoid contractual payment obligations by asserting that it allocated lump-sum appropriations to other purposes or other tribal contracts.

## Decision

- The Court held, 8–0, that the Government was legally bound to pay the promised CSCs; the Chief Justice took no part.
- The Court affirmed the Federal Circuit’s judgment for the Cherokee Nation and reversed the Tenth Circuit’s judgment against the Shoshone–Paiute Tribes, remanding both cases.
- The Court rejected the Government’s “insufficient appropriations” defense on these facts because Congress provided adequate unrestricted appropriations that could have been used to satisfy the contractual obligations.

## Legal Principles

- ISDEAA self-determination contracts are enforceable obligations of the United States comparable to ordinary government procurement contracts unless Congress clearly provides otherwise.
- When Congress enacts an unrestricted appropriation sufficient to cover a contract, the contractor is entitled to payment even if the agency has allocated the funds to other purposes.
- A general claim that appropriations were inadequate to satisfy all similar obligations does not excuse nonpayment of specific contractual promises absent a clear statutory cap or other explicit limitation overriding the contract.
- Only a clearly applicable statutory limitation (e.g., an explicit funding cap or other direct restriction) could justify nonpayment of amounts promised in an otherwise valid contract.

## Conclusion

The Supreme Court held that the United States must pay contract support costs promised to tribes under ISDEAA self-determination contracts when Congress has provided sufficient unrestricted appropriations to satisfy those obligations, and an agency’s internal allocation choices do not defeat contractual liability.


Cherokee Nation of Okla. v. Leavitt, 543 U.S. 631 (2005)