31 USC 1535 - Sec. 1535. Agency agreements

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(a) 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 - (1) amounts are available; (2) the head of the ordering agency or unit decides the order is in the best interest of the United States Government; (3) the agency or unit to fill the order is able to provide or get by contract the ordered goods or services; and (4) the head of the agency decides ordered goods or services cannot be provided by contract as conveniently or cheaply by a commercial enterprise. (b) Payment shall be made promptly by check on the written request of the agency or unit filling the order.

Payment may be in advance or on providing the goods or services ordered and shall be for any part of the estimated or actual cost as determined by the agency or unit filling the order. A bill submitted or a request for payment is not subject to audit or certification in advance of payment.

Proper adjustment of amounts paid in advance shall be made as agreed to by the heads of the agencies or units on the basis of the actual cost of goods or services provided. (c) A condition or limitation applicable to amounts for procurement of an agency or unit placing an order or making a contract under this section applies to the placing of the order or the making of the contract. (d) An order placed or agreement made under this section obligates an appropriation of the ordering agency or unit. The amount obligated is deobligated to the extent that the agency or unit filling the order has not incurred obligations, before the end of the period of availability of the appropriation, in - (1) providing goods or services; or (2) making an authorized contract with another person to provide the requested goods or services. (e) This section does not - (1) authorize orders to be placed for goods or services to be provided by convict labor; or (2) affect other laws about working funds.

Historical And Revision Notes

1982 ACT

Revised Source (U.S. Code) Source (Statutes at Large) Section

1535(a) 31:686(a)(1st Mar. 4, 1915, ch. 143, Sec. sentence words 1(3d proviso on p. 1084), 38 before 15th comma, Stat. 1084; May 21, 1920, ch. last proviso). 194, Sec. 7(a), 41 Stat. 613; June 30, 1932, ch. 314, Sec. 601, 47 Stat. 417; restated July 20, 1942, ch. 507, 56 Stat. 661; Aug. 23, 1958, Pub. L. 85-726, Sec. 1407, 72 Stat. 808; Aug. 6, 1981, Pub. L. 97-31, Sec. 12(11), 95 Stat. 154; Dec. 29, 1981, Pub. L. 97-136, Sec. 11, 95 Stat. 1707. 1535(b) 31:686(a)(1st sentence 1st proviso). 1535(c) 31:686(a)(1st sentence words between 15th comma and 1st proviso, last sentence). 1535(d) 31:686(c). May 21, 1920, ch. 194, Sec. 7(c), 41 Stat. 613; June 30, 1932, ch. 314, Sec. 601, 47 Stat. 417; restated June 26, 1943, ch. 150, Sec. 1, 57 Stat. 219. 31:686-1. Sept. 6, 1950, ch. 896, Sec. 1210(last proviso), 64 Stat. 765. 1535(e)( 31:686b(a), (b). June 30, 1932, ch. 314, Sec. 1) 602(a), (b), (c)(related to Sec. 602), 47 Stat. 418. 1535(e)( 31:686b(c)(related 2) to 31:686, 686b).

In the section, the word "agency" is substituted for "executive department or independent establishment of the Government" for clarity.

See 12 Comp. Gen. 442 (1932) and United States v. Mitchell, 425 F. Supp. 917 (D.D.C. 1976). The words "major organizational unit" or "unit" are substituted for "bureau or office" for consistency in the revised title.

The words "to fill the order" or "filling the order" are substituted for "such requisitioned" and "as may be requisitioned" for clarity and because of the restatement.

The words "goods or services" are substituted for "materials, supplies, equipment, work, or services" to eliminate unnecessary words.

In subsection (a)(4), the words "the head of the agency decides" are added, and the words "commercial enterprise" are substituted for "private agencies", for clarity.

The words "by competitive bids" are omitted as surplus because of various procurement laws. In subsection (b), the words "The Secretary of Defense" are added for clarity because of Comptroller General decision B-20179 (Apr. 1, 1981). The words "a military department of the Department of Defense" are substituted for "the Department of the Army, Navy Department" for consistency with title 10 and to apply the source provisions to the Department of the Air Force because of sections 205(a) and 207(a) and (f) of the Act of July 26, 1947 (ch. 343, 61 Stat. 501, 502), and section 1 of the Act of August 10, 1956 (ch. 1041, 70A Stat. 488). The words "Secretary of Transportation in carrying out duties and powers related to aviation and the Coast Guard" are substituted for "Federal Aviation Agency, Coast Guard" to reflect the transfer of those functions to the Secretary of Transportation.

The words "the Administrator of General Services" are added to reflect the transfer of the functions of the Bureau of Federal Supply of the Treasury Department to the Administrator by section 102(a) of the Act of June 30, 1949 (40:752(a)). The words "the Administrator of" are added before "Maritime Administration" for clarity and consistency in the revised title and with other titles of the United States Code. In subsection (c), the words "pursuant to such order" are omitted as unnecessary.

Subsection (d) is substituted for the source provisions being restated to reflect decisions of the Comptroller General, including 31 Comp. Gen. 83 (1951), 34 Comp. Gen. 418 (1955), 39 Comp. Gen. 317 (1959), and 55 Comp. Gen. 1497 (1976). In subsection (e), the words "any Government department or independent establishment, or any bureau or office thereof" and "except as otherwise provided by law" are omitted as unnecessary because of the restatement.

The text of 31:686b(a) is omitted as executed. 1984 ACT

Revised Source (U.S. Code) Source (Statutes at Large) Section

1535(a) 31 App.:686(a) (1st May 21, 1920, ch. 194, Sec. sentence words 7(a) (1st, 2d sentences), 41 before 15th comma, Stat. 613; June 30, 1932, ch. proviso) 314, Sec. 601, 47 Stat. 417; restated July 20, 1942, ch. 507, 56 Stat. 661; Aug. 23, 1958, Pub. L. 85-726, Sec. 1407, 72 Stat. 808; Aug. 6, 1981, Pub. L. 97-136, Sec. 11, 95 Stat. 1707; Oct. 15, 1982, Pub. L. 97-332, Sec. 1(1)-(3), 96 Stat. 1622. 1535(b) 31 App.:686(a) (1st sentence words between 15th comma and proviso, 2d sentence) 1535(c) 31 App.:686(a) May 21, 1920, ch. 194, 41 (last sentence) Stat. 607, Sec. 7(a) (last sentence); added Oct. 15, 1982, Pub. L. 97-332, Sec. 1(4), 96 Stat. 1622.

AMENDMENTS 1984 - Subsec. (a)(3). Pub. L. 98-216, Sec. 1(2)(A), inserted "or get by contract" after "provide". Subsec. (a)(4). Pub. L. 98-216, Sec. 1(2)(B), inserted "by contract" after "provided". Subsecs. (b), (c). Pub. L. 98-216, Sec. 1(2)(C)-(E), redesignated subsec. (c) as (b). Former subsec. (b), which provided that the Secretary of Defense, the Secretary of a military department of the Department of Defense, the Secretary of Transportation in carrying out duties and powers related to aviation and the Coast Guard, the Secretary of the Treasury, the Administrator of General Services, and the Administrator of the Maritime Administration could place orders under this section for goods and services that an agency or unit filling the order might be able to provide or procure by contract, was struck out. PLACEMENT OF ORDERS BY CHIEF ADMINISTRATIVE OFFICER OF THE HOUSE OF REPRESENTATIVES Pub. L. 107-206, title I, Sec. 904, Aug. 2, 2002, 116 Stat. 876, provided that: "Nothing in section 1535 of title 31, U.S.C. (commonly referred to as the 'Economy Act'), or any other provision of such title may be construed to prevent or restrict the Chief Administrative Officer of the House of Representatives from placing orders under such section during any fiscal year in the same manner and to the same extent as the head of any other major organizational unit with an agency may place orders under such section during a fiscal year." ECONOMY ACT PURCHASES Pub. L. 103-355, title I, Sec. 1074, Oct. 13, 1994, 108 Stat. 3271, provided that the Federal Acquisition Regulation was to be revised to include regulations governing the exercise of authority under this section for Federal agencies to purchase goods and services under contracts entered into or administered by other agencies, and further provided for content of regulations, establishment of system to monitor procurements under regulations, and that section would cease to be effective one year after date on which final regulations took effect.

Final regulations were published in the Federal Register Sept. 26, 1995, effective Oct. 1, 1995. See 60 F.R. 49720. DEPARTMENT OF DEFENSE PURCHASES THROUGH OTHER AGENCIES Pub. L. 105-261, div. A, title VIII, Sec. 814, Oct. 17, 1998, 112 Stat. 2087, provided that: "(a) Extension of Regulations. - Not later than 90 days after the date of the enactment of this Act [Oct. 17, 1998], the Secretary of Defense shall revise the regulations issued pursuant to section 844 of the National Defense Authorization Act for Fiscal Year 1994 (Public Law 103-160; 107 Stat. 1720; 31 U.S.C. 1535 note) to - "(1) cover any purchase described in subsection (b) that is greater than the micro-purchase threshold; and "(2) provide for a streamlined method of compliance for any such purchase that is not greater than the simplified acquisition threshold. "(b) Description of Purchases. - A purchase referred to in subsection (a) is a purchase of goods or services for one agency of the Department of Defense by any other agency under a task or delivery order contract entered into by the other agency under section 2304a of title 10, United States Code, or section 303H of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253h). "(c) Definitions. - In this section: "(1) The term 'micro-purchase threshold' has the meaning provided in section 32 of the Office of Federal Procurement Policy Act (41 U.S.C. 428). "(2) The term 'simplified acquisition threshold' has the meaning provided in section 4 of such Act (41 U.S.C. 403). "(d) Termination. - This section shall cease to be effective 1 year after the date on which final regulations prescribed pursuant to subsection (a) take effect." Pub. L. 103-160, div. A, title VIII, Sec. 844, Nov. 30, 1993, 107 Stat. 1720, directed Secretary of Defense, not later than six months after Nov. 30, 1993, to prescribe regulations governing exercise by Department of Defense of authority under this section to purchase goods and services under contracts entered into or administered by another agency, and provided for content of regulations, establishment of system to monitor procurements under regulations, and that section would cease to be effective one year after date on which final regulations took effect.

Final regulations were published in the Federal Register Sept. 26, 1995, effective Oct. 1, 1995. See 60 F.R. 49720. ACQUISITION OF GOODS, SERVICES, OR SPACE BY SECRETARY OF SENATE AND SERGEANT AT ARMS AND DOORKEEPER OF SENATE Pub. L. 101-163, title I, Sec. 8, Nov. 21, 1989, 103 Stat. 1046, provided that: "(1) The Secretary of the Senate and the Sergeant at Arms and Doorkeeper of the Senate are authorized to acquire goods, services, or space from government agencies and units by agreement under the provisions of the Economy Act, 31 U.S.C. 1535, and to make advance payments in conjunction therewith, if required by the providing agency or establishment. "(2) No advance payment may be made under paragraph (1) unless specifically provided for in the agreement.

No agreement providing for advance payment may be entered into unless it contains a provision requiring the refund of any unobligated balance of the advance. "(3) No agreement may be entered into under paragraph (1) without the approval of the Senate Committee on Rules and Administration and the Senate Committee on Appropriations."

Section Referred To In Other Sections

This section is referred to in section 1536 of this title; title 2 sections 142j, 182c, 1151, 1385; title 7 section 2009cc-16; title 10 sections 377, 1104, 2205, 2684; title 16 sections 670c-1, 825k; title 22 sections 2358, 6204; title 24 section 168b; title 25 section 2804; title 29 section 563a; title 38 section 1720A; title 40 sections 3134, 3176; title 41 section 261; title 42 section 254; title 43 sections 1471c, 1471f; title 48 section 1469d; title 50 section 414.