The Economy Act
The Economy Act allows agencies to acquire supplies or services from other agencies only when justified by a formal determination and findings, ensuring cost-effectiveness and proper documentation.
Overview
FAR 17.502-2 outlines the requirements and procedures for using the Economy Act (31 U.S.C. 1535) to obtain supplies or services from another federal agency. The regulation applies when an agency uses another agency’s contract, unless a more specific statutory authority exists (such as Federal Supply Schedules or GWACs). It mandates that each Economy Act order be supported by a determination and findings (D&F) justifying the use of interagency acquisition, including statements on best interest, convenience, and applicable circumstances. The D&F must be approved by an authorized official and provided to the servicing agency. Payment procedures are specified, including provisions for advance payment, cost adjustments, and prohibitions on fees exceeding actual costs. The section ensures proper justification, documentation, and financial controls for interagency acquisitions under the Economy Act.
Key Rules
- Applicability of the Economy Act
- Applies when no more specific statutory authority exists for interagency acquisitions; FAR applies only if a contract or order results.
- Determinations and Findings (D&F) Requirement
- Each order must be supported by a D&F stating best interest, convenience, and specific qualifying circumstances.
- Approval and Documentation
- D&F must be approved by an authorized contracting officer or designated official and furnished to the servicing agency.
- Payment Provisions
- Advance payments may be requested; payments must not exceed actual or estimated costs; no pre-payment audit or certification required.
Responsibilities
- Contracting Officers: Prepare, approve, and provide D&F; ensure compliance with payment and documentation requirements.
- Contractors: Not directly involved, but agencies must ensure compliance when using interagency contracts.
- Agencies: Oversee proper use of the Economy Act, maintain documentation, and adhere to payment rules.
Practical Implications
- Ensures interagency acquisitions are justified and cost-effective.
- Requires clear documentation and approval processes.
- Prevents agencies from charging or paying more than actual costs.
- Common pitfalls include missing D&F, improper approvals, or exceeding cost limits.