Kate M. Manuel
Legislative Attorney
Brian T. Yeh
Legislative Attorney
This report provides an overview of the federal procurement and appropriations laws governing interagency contracting. “Interagency contracting” is the term used to describe several procurement relationships between government agencies. The first is one of buyer and seller, where agency A directly purchases goods or services from agency B. Second is that of copurchasers, where agency A joins with agency B to contract for goods or services to obtain economies of scale or some other benefit. Third, agency A might hire agency B to negotiate and/or manage agency A’s contracts in toto or in a specific area. Interagency contracting is a marked departure from the traditional model of government contracting, wherein agencies have their own contracts with vendors and rely upon the services of their own contracting officers in drafting and managing these contracts.
Interagency contracting can occur under several different statutory authorities, including (1) the Economy Act of 1932; (2) the Information Technology Management Reform Act of 1996, also known as the Clinger-Cohen Act, authorizing government-wide acquisition contracts (GWACs); (3) the Federal Property and Administrative Services Act of 1949, as amended by the Office of Federal Procurement Policy Act of 1974, underlying the Federal Supply Schedules (FSS), also known as the General Services Administration (GSA) Schedules or Multiple Award Schedules (MAS); and (4) the Government Management Reform Act of 1994 and other authorities creating franchise funds and interagency assisting entities. Franchise funds and interagency assisting entities are not themselves contracting vehicles, but they play a prominent role in interagency contracting.
Interagency contracting generally implicates principles of appropriations law, as well as procurement law, because appropriated funds are transferred between federal agencies. Appropriations law specifies the ways in which appropriated funds may be spent, and agencies must comply with the various requirements that are attached to any appropriation. Additionally, appropriations law details how agencies must account for these funds and ensures payment is made to the appropriate accounts.
Increased use of interagency contracting, coupled with widely reported incidents of mismanagement and Antideficiency Act violations involving interagency contracts, has made interagency contracting a topic of interest to some Members of Congress and commentators. The Government Accountability Office (GAO) first designated interagency contracting a “high risk” area for the federal government in 2005, and interagency contracting remained on GAO’s “high risk” list for the Department of Defense in 2009. The 111th Congress has enacted three statutes addressing interagency contracting (P.L. 111-5, P.L. 111-8, P.L. 111-117) and is considering additional legislation (H.R. 1766, H.R. 2182, H.R. 2415, H.R. 2416, H.R. 3170, H.R. 4221, S. 920, S. 1064, S. 1432, S. 1830, S. 2868, S. 2989, S. 3677).
Date of Report: October 1, 2010
Number of Pages: 35
Order Number: R40814
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Legislative Attorney
Brian T. Yeh
Legislative Attorney
This report provides an overview of the federal procurement and appropriations laws governing interagency contracting. “Interagency contracting” is the term used to describe several procurement relationships between government agencies. The first is one of buyer and seller, where agency A directly purchases goods or services from agency B. Second is that of copurchasers, where agency A joins with agency B to contract for goods or services to obtain economies of scale or some other benefit. Third, agency A might hire agency B to negotiate and/or manage agency A’s contracts in toto or in a specific area. Interagency contracting is a marked departure from the traditional model of government contracting, wherein agencies have their own contracts with vendors and rely upon the services of their own contracting officers in drafting and managing these contracts.
Interagency contracting can occur under several different statutory authorities, including (1) the Economy Act of 1932; (2) the Information Technology Management Reform Act of 1996, also known as the Clinger-Cohen Act, authorizing government-wide acquisition contracts (GWACs); (3) the Federal Property and Administrative Services Act of 1949, as amended by the Office of Federal Procurement Policy Act of 1974, underlying the Federal Supply Schedules (FSS), also known as the General Services Administration (GSA) Schedules or Multiple Award Schedules (MAS); and (4) the Government Management Reform Act of 1994 and other authorities creating franchise funds and interagency assisting entities. Franchise funds and interagency assisting entities are not themselves contracting vehicles, but they play a prominent role in interagency contracting.
Interagency contracting generally implicates principles of appropriations law, as well as procurement law, because appropriated funds are transferred between federal agencies. Appropriations law specifies the ways in which appropriated funds may be spent, and agencies must comply with the various requirements that are attached to any appropriation. Additionally, appropriations law details how agencies must account for these funds and ensures payment is made to the appropriate accounts.
Increased use of interagency contracting, coupled with widely reported incidents of mismanagement and Antideficiency Act violations involving interagency contracts, has made interagency contracting a topic of interest to some Members of Congress and commentators. The Government Accountability Office (GAO) first designated interagency contracting a “high risk” area for the federal government in 2005, and interagency contracting remained on GAO’s “high risk” list for the Department of Defense in 2009. The 111th Congress has enacted three statutes addressing interagency contracting (P.L. 111-5, P.L. 111-8, P.L. 111-117) and is considering additional legislation (H.R. 1766, H.R. 2182, H.R. 2415, H.R. 2416, H.R. 3170, H.R. 4221, S. 920, S. 1064, S. 1432, S. 1830, S. 2868, S. 2989, S. 3677).
Date of Report: October 1, 2010
Number of Pages: 35
Order Number: R40814
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
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