B-309530, National Labor Relations Board--Funding of Subscription Contracts, September 17, 2007

B-309530 Sep 17, 2007 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights The National Labor Relations Board (NLRB) did not violate the bona fide needs rule when, in September 2006, it obligated fiscal year (FY) 2006 funds for five Web site database subscription renewals that it needed to have in place on October 1, 2006, the first day of FY 2007. Even though delivery of the renewed subscriptions would occur entirely in FY 2007, to ensure continued receipt of the subscriptions, NLRB reasonably determined that the renewal orders needed to be placed in FY 2006, before the expiration of the existing subscriptions on September 30, 2006. However, NLRB violated the bona fide needs rule when it obligated FY 2006 funds to renew two Web site database subscriptions that were not due to expire until October 31, 2006. These subscription renewals were a bona fide need of FY 2007, and NLRB should have purchased these subscriptions using its FY 2007 appropriation. View Decision B-309530, National Labor Relations Board--Funding of Subscription Contracts, September 17, 2007 Decision Matter of: National Labor Relations Board—Funding of Subscription Contracts File: B-309530 Date: September 17, 2007 DIGEST The National Labor Relations Board (NLRB) did not violate the bona fide needs rule when, in September 2006, it obligated fiscal year (FY) 2006 funds for five Web site database subscription renewals that it needed to have in place on October 1, 2006, the first day of FY 2007. Even though delivery of the renewed subscriptions would occur entirely in FY 2007, to ensure continued receipt of the subscriptions, NLRB reasonably determined that the renewal orders needed to be placed in FY 2006, before the expiration of the existing subscriptions on September 30, 2006. However, NLRB violated the bona fide needs rule when it obligated FY 2006 funds to renew two Web site database subscriptions that were not due to expire until October 31, 2006. These subscription renewals were a bona fide need of FY 2007, and NLRB should have purchased these subscriptions using its FY 2007 appropriation. DECISION The Office of Inspector General, National Labor Relations Board (NLRB), has requested a decision on whether obligating fiscal year (FY) 2006 funds to pay for seven Web site database subscription renewals that began in FY 2007 violates the bona fide needs rule. Letter from David Berry, Counsel to the Inspector General, NLRB, to Gary L. Kepplinger, General Counsel, GAO, May 9, 2007 (Request Letter). As explained below, because five of the subscriptions were due to expire on September 30, 2006, NLRB placed its renewal orders in September in order to ensure that they continued uninterrupted on October 1, 2006, the first day of FY 2007. Despite the fact that the subscriptions would be provided entirely in FY 2007, the bona fide need arose in FY 2006, and NLRB's FY 2006 appropriation was available to pay for these FY 2007 subscriptions. For two of the subscription renewals, however, delivery was not needed until November 2007, and NLRB has not explained why these orders could not have been placed in October 2007 using FY 2007 funds. Therefore, the agency violated the bona fide needs rule when it obligated funds from its FY 2006 appropriation to pay for these two subscriptions. Our practice when rendering decisions is to obtain the views of the relevant federal agency to establish a factual record and to elicit the agency's legal position in the matter. GAO, Procedures and Practices for Legal Decisions and Opinions, GAO'06'1064SP (Washington, D.C.: Sept. 2006), available at www.gao.gov/legal.htm. In response to questions regarding these subscriptions, in June 2007 Counsel to the Inspector General provided us with written responses and supporting documentation. Letter from David Berry, Counsel to the Inspector General, NLRB, to Susan A. Poling, Associate General Counsel, GAO (June 25, 2007) (IG Letter). The NLRB's Office of the General Counsel also provided us with factual information about the purchases and its legal opinion. Letter from Joseph M. Davis, Special Counsel to the General Counsel, NLRB, to Gary L. Kepplinger, General Counsel, GAO (Aug. 6, 2007) (GC Letter). BACKGROUND NLRB consists of a five-member Board and a General Counsel. GC Letter, at 1. The mission of the NLRB is to conduct secret ballot elections of employees in a bargaining unit and prevent any person from engaging in any unfair labor practices. Id. In general, the Board acts as a quasi-judicial body that decides cases based upon formal records in administrative proceedings. Id.The General Counsel prosecutes cases before the Board and has final authority with respect to the investigation of charges and the issuances of complaints alleging unfair labor practices. Id. at 2. The General Counsel also litigates cases before federal district courts, bankruptcy courts, courts of appeal, and the Supreme Court.