Summary: GAO responded to inquiries concerning inter- or intra-agency orders under section 601 of the Economy Act. It was indicated that there are instances where an order or requisition by an agency could be executed by the performing agency, in part by using work, services, equipment, supplies or materials obtained by contract. In these cases, the entire requisition would be prevented by interpreting the section as not authorizing the use of contracts for partial fulfillment of the order even though the performing agency would itself perform some of the order. GAO was asked: (1) whether this aspect would be a sound basis for modifying the section to enable agencies other than those named in the first provided clause to have their requisitions under the section partially effectuated through the use of contracts; and (2) what standards are used to determine when a purchase of materials, supplies, equipment, or services for use in such a project would be deemed an illegal contract instead of a replacement or substitution for materials, supplies, equipment, or services otherwise available to the agency. It was the opinion of GAO that the act authorizes agencies to perform work or service for other agencies even though they must procure additional supplies, materials, or equipment or temporarily hire additional employees. Therefore, a legislative amendment would be desirable to authorize all agencies to have their orders executed in part by outside contractors where the service is otherwise substantially performed by another agency.
