In Reply Refer To:
WGS-Mail Stop 404

May 22, 1985

WATER RESOURCES DIVISION MEMORANDUM NO. 85.76

Subject: POLICY – Relevance of the Division’s Other Federal Agency Program of the Competition in Contracting Act of 1984

This memorandum describes briefly the legal basis for the Geological Survey performing reimbursable services for other agencies as part of our Other Federal Agency (OFA) Program and also describes the relevance of the Competition in Contracting Act of 1984 to the OFA Program. The authorization of our basic mission to conduct water-resources investigations is stated in Water Resources Division (WRD) Memorandum No. 85.34, December 17, 1984, printed on pages A10-A11, WRD Data Book, January 1985.

The legislative authority for the reimbursable funding mechanism used in connection with our performing water-resources investigations for the OFA Program has been for many years, and continues to be, the Economy Act of 1932 (and its codification in 1982 with minimal substantive change as part of Public Law 97-258). The relevant wording of the Economy Act is, in part, as follows, and subsequent laws (including P.L. 98-369, described below) have not superseded these provisions of the Economy Act:

“The head of an agency or major organizational unit within an agency may place an order with a major organizational unit within the same agency or another agency for goods or services if … the head of the ordering agency or unit decides the order is in the best interest of the United States Government; … and the head of the agency decides ordered goods or services cannot be provided as conveniently or cheaply by a commercial enterprise: (31 U.S.C. 15535).

Competition in Contracting Act of 1984, part of Public Law 98-369

One part of the Deficit Reduction Act of 1984, July 18, 1984, is the Competition in Contracting Act of 1984 (CICA), that decrees various requirements for competition in procurement. CICA contains the following stipulation (98 Stat. 1378); underlining has been added for emphasis of the words that are particularly relevant to the thrust of this memorandum:

“except in the case of procurement procedures otherwise expressly authorized by statute, an executive agency in conducting a procurement for property or services shall obtain full and open competition through the use of competitive procedures… and shall use the competitive procedure or combination of competitive procedures that is best suited under the circumstances of the procurement.”

Our view is that the Economy Act of 1932, as amended in 1982, constitutes a currently valid statutory authority. Therefore, the Economy Act continues to prevail as the legal basis for performing reimbursable services in our OFA Program provided (1) the requesting agency determines (among other things) that the “ordered goods or services cannot be provided as conveniently or cheaply by a commercial enterprise,” and (2) the Geological Survey complies with the Competition in Contracting Act of 1984 in its own procurement of property and services. The latter requirement is being met by the Geological Survey, and the former requirement is the responsibility of the funding agency.

The current edition of the Government-wide Federal Acquisition Regulation (FAR) continues to include the Economy Act as an applicable statutory authority for interagency acquisitions (FAR, subpart 17.5). The wording of section 17.502, General, of FAR is as follows:

“Under the Economy Act, an agency may place orders with any other agency for supplies or services that the servicing agency may be in a position or equipped to supply, render, or obtain by contract if it is determined by the head of the requesting agency, or designee, that it is in the Government’s interest to do so.”

The subject of this memorandum has been discussed with personnel of the Procurement Policy Section of the Administrative Division and conforms to their understanding of the Competition in Contracting Act and its applicability to Economy Act transfers of funds. This memorandum also conforms to and reinforces fully the Division’s policy recently restated in WRD Memorandum No. 85.59, February 13, 1985, POLICY – Competition with the Private Sector.

Philip Cohen
Chief Hydrologist

Distribution: A, B, S, FO, PO

This memorandum does not supersede any previous WRD memorandum.