B-308969, Interagency Agreements--Obligation of Funds under an Indefinite Delivery, Indefinite Quantity Contract, May 31, 2007

B-308969 May 31, 2007 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights The Department of the Interior, National Business Center, awarded a 1-year indefinite delivery, indefinite quantity contract (IDIQ) on behalf of the Department of Defense (DOD), having a period of performance from July 1, 2003, to June 30, 2004. The contract required the government to purchase a minimum of $1 million in services from the contractor. The entire minimum amount applicable to the IDIQ contract should have been obligated against fiscal year 2003 funds; however, Interior and DOD only charged $45,000 to the proper fiscal year appropriation. Accordingly, Interior and DOD should adjust their accounts to correct the improper obligation. View Decision B-308969, Interagency Agreements--Obligation of Funds under an Indefinite Delivery, Indefinite Quantity Contract, May 31, 2007 Matter of: Interagency Agreements—Obligation of Funds under an Indefinite Delivery, Indefinite Quantity Contract File: B-308969 Date: May 31, 2007 DIGEST The Department of the Interior, National Business Center, awarded a 1-year indefinite delivery, indefinite quantity contract (IDIQ) on behalf of the Department of Defense (DOD), having a period of performance from July 1, 2003, to June 30, 2004. The contract required the government to purchase a minimum of $1 million in services from the contractor. The entire minimum amount applicable to the IDIQ contract should have been obligated against fiscal year 2003 funds; however, Interior and DOD only charged $45,000 to the proper fiscal year appropriation. Accordingly, Interior and DOD should adjust their accounts to correct the improper obligation. DECISION The Inspector General for the Department of the Interior requests our decision under 31 U.S.C. sect. 3529 regarding issues raised during an audit of transactions between the Department of the Interior (Interior) and the Department of Defense (DOD).[1] This decision addresses the transaction involving DOD's Personnel Security Research Center (PERSEREC) and Interior's National Business Center Acquisition Services Division, Southwest Branch (SWB), for acquisition of support services for PERSEREC.[2] The issue is whether SWB and/or DOD violated the Antideficiency Act when SWB awarded a 1-year indefinite delivery, indefinite quantity (IDIQ) contract on behalf of PERSEREC. The contract specified a guaranteed minimum of $1 million over a 3'year period. Interior obligated $45,000 at the time of award and $955,000 the following fiscal year. As explained below, SWB should have obligated the contract's guaranteed minimum of $1 million at the time of award using the fiscal year funds of the year of contract award, 2003. Because SWB obligated only $45,000 of the $1 million from fiscal year 2003 appropriations and incorrectly obligated the balance from fiscal year 2004 appropriations, it potentially risked committing an Antideficiency Act violation. It should now adjust its accounts to reflect the proper obligation of fiscal year 2003 funds for the full amount of the minimum. Also, since SWB was acting as DOD's contracting agent and because DOD appropriations ultimately funded the contract, as SWB adjusts its accounts, DOD should also adjust its accounts. As with SWB, DOD should have obligated its fiscal year 2003 funds in the amount of the contract's guaranteed minimum, and it incorrectly obligated the balance from fiscal year 2004 appropriations.[3] Our practice when rendering decisions is to obtain the views of the relevant federal agencies to establish a factual record and to elicit the agency's legal position on the matter. GAO, Procedures and Practices for Legal Decisions and Opinions, GAO-06-1064SP (WashingtonD.C.: Sept. 2006), available at www.gao.gov/legal.htm. In this case, we contacted the General Counsel of DOD and the Solicitor of Interior to obtain their legal views and obtain factual information regarding the above-mentioned transaction. The Solicitor provided documents and responses to our request for factual information. Letter from David Bernhardt, Solicitor of the Interior to Thomas H. Armstrong, Assistant General Counsel, GAO, Apr. 20, 2007 (Bernhardt Letter). He declined, however, to provide us with his legal views regarding this matter. Id. The General Counsel of DOD also failed to respond timely to our request for factual information or to our offer to submit legal views. Although a response from the DOD General Counsel would have been useful in our decision making process, we were able to obtain an adequate record upon which to consider fully the issues raised through documents provided to us and public documents such as Interior's and DOD's Inspector General reports. BACKGROUND The Department of the InteriorNationalBusinessCenter, Acquisition Services Division, Southwest Branch (SWB) provides acquisition services to other government agencies.