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Indian Health Service The Federal Health Program for American Indians and Alaska Natives


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Part 6, Chapter 3:  Manual Exhibit 6-3-E

Allocation of Pool No.3 Funds Against Overall
Contract Support Cost Shortfall for Ongoing Contracts
(Bottom-Up Plus Proportionate Distribution)

The purpose of this allocation of funding needed for all Public Law (P.L.) 93-638 compacts and contracts is to provide for an equitable allocation of available appropriated resources when considering the overall level of contract support costs (CSC) need currently being funded each awardee eligible for increased CSC funding.  The allocation of Pool No. 3 funding by this methodology will:

  • allocate 50 percent of available CSC shortfall funds to those awardees with the greatest CSC shortfalls in order to raise the minimum level of CSC funded to the highest level possible (a bottom-up approach);
  • allocate 50 percent of the available CSC shortfall funds to all P.L. 93-638 contractors and compactors that have a CSC shortfall; and
  • provide relatively larger increases to those with the greatest shortfalls, thus decreasing variations in overall CSC shortfall percentages among all awardees by providing larger payments to those with the lowest percentage of their overall CSC need funded, while at the same time moving all awardees closer to 100 percent funding.

The Headquarters allocation of Pool No. 3 funds will be made according to the following methodology:

  1. As soon as possible in the FY, but not later than March 30 the amount of the ongoing CSC requirements will be computed from the data provided in Section 6-3.5, “Contract Support Costs Shortfall Report,” of this chapter.
  2. The percentage of CSC funding available for paying CSC shortfalls will be computed by dividing the total funding available for CSC shortfall by the requirement for ongoing CSC shortfall identified above.
  3. Fifty percent of the amount available for Pool No. 3 will be allocated to those awardees with the greatest CSC percentage shortfall in such a way as to raise the minimum level of CSC funded to the maximum percentage possible (a bottom-up approach).
  4. After making the allocation required in paragraph (3) above, the remaining 50 percent of the amount available for Pool No. 3 shall be allocated proportionately to all awardees with a CSC shortfall.
  5. The allocation methodology for paragraph (4) above can be described mathematically as follows:

Fs= (ACSC_ ACSCa) *  (Pool 3 /(TCSCr-TCSCa))

Where:

FS =  New CSC shortfall funding to be received for any awardee.

ACSCr =  Total ongoing CSC requirement for the awardee (after the allocation under paragraph (3) above).

ACSCa =  Total CSC funding available for the awardee (after the allocation under paragraph (3) above).

TCSCr =  Total ongoing CSC requirement for all awardees (after the allocation under paragraph (3) above).

TCSCa =  Total CSC funding available for all awardees (after the allocation under paragraph (3) above).

An example of this allocation methodology follows.  The example assumes that eight awardees have approved total CSC requirements (TCSCr) for the fiscal year totaling $41 million.  The total CSC shortfall for the eight awardees is $9,459,500, and the total CSC funding available (TCSCa) for CSC shortfalls under Pool No. 3 is $5 million.

Bottom-Up Distribution of First

Tribe Total CSC Need Available CSC Funding Percent of CSC Need Funded Minimum Percent of CSC Fundable Bottom-Up Distribution of First 50 percent New Total CSC Funded New percent of CSC Need Funded
Tribe 1 $5,000,000 $4,900,000
98.00%
80.14%
  
$4,900,000
98.00%
Tribe 2 $1,000,000 $250,000 25.00%
80.14%
$551,436 $801,436
80.14%
Tribe 3 $500,000 $288,000
57.60%
80.14%
$112,718 $400,718
80.14%
Tribe 4 $4,000,000 $3,280,000
82.00%
80.14%
  
$3,280,000
82.00%
Tribe 5 $12,500,000 $10,232,500
81.86%
80.14%
  
$10,232,500
81.86%
Tribe 6 $7,000,000 $5,160,000
73.71%
80.14%
$450,051 $5,610,051
80.14%
Tribe 7 $5,000,000 $3,880,000
77.60%
80.14%
$127,180 $4,007,180
80.14%
Tribe 8 $6,000,000 $3,550,000
59.17%
80.14%
$1,258,615 $4,808,615
80.14%
  
$41,000,000 $31,540,500
76.93%
80.14%
$2,500,000 $34,040,500
83.03%

Break Point %: 80.14%
Available for Bottom-Up Allocation: $2,500,000


Proportionate Distribution of Remaining

Tribe Total CSC Need Available CSC Funding (After bottom-Up) Percent of CSC Need Funded CSC Shortfall (Unfunded Need) Proportionate Distribution of Remaining 50 percent Final Total CSC Funded Final Percent of CSC Need Funded
Tribe 1 $5,000,000 $4,900,000
98.00%
$100,000 $35,922 $4,935,922
98.72%
Tribe 2 $1,000,000 $801,436
80.14%
$198,564 $71,328 $872,764
87.28%
Tribe 3 $500,000 $400,718 80.14% $99,282 $35,664 $436,382
87.28%
Tribe 4 $4,000,000 $3,280,000
82.00%
$720,000 $258,639 $3,538,639
88.47%
Tribe 5 $12,500,000 $10,232,500
81.86%
$2,267,500 $814,534 $11,047,034
88.38%
Tribe 6 $7,000,000 $5,610,051
80.14%
$1,389,949 $499,299 $6,109,350
87.28%
Tribe 7 $5,000,000 $4,007,180
80.14%
$992,821 $356,642 $4,363,822
87.28%
Tribe 8 $6,000,000 $4,808,615
80.14%
$1,191,385 $427,971 $5,236,586
87.28%
  
$41,000,000 $34,040,500
83.03%
$6,959,500 $2,500,000 $36,540,500
89.12%

% of Shortfall to be funded: 35.92%
Available for Proportionate Allocation: $2,500,000

All awardees on the list would receive some funding for their CSC shortfalls for the FY.  Only those awardees with less than 80.14 percent of their CSC need funded would receive a payment from the distribution of the first 50 percent.  All awardees would receive funds in proportion to the existing CSC shortfall of the remaining 50 percent of available Pool No. 3 funds.  After the shortfall allocation, the range of funded shortfall for all awardees in the group narrows to between 87 percent and 99 percent.




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