How does GSA's Info Tech Fund work?

The following issue was raised by a reader: For some years, the General Services Administration has administered an Information Technology Fund, through which it purchases IT resources for other agencies. Will the repeal of the Brooks Act affect the use of this fund?

Federal acquisitions of IT resources through interagency arrangements are authorized in several different statutes. In practice, GSA's IT Fund authority has been one of the most important of these. Other such statutes include the Economy Act, the Brooks Act and the General Supply Fund statute. Effective Aug. 8, 1996, Congress is replacing the Brooks Act with the new, significantly more limited Information Technology Management Reform Act (ITMRA) of 1995. (See National Defense Authorization Act for Fiscal 1996, 5101.) However, the new act does not affect GSA's operations under its IT Fund authority.

The oldest and broadest authority for interagency acquisitions is found in the Economy Act of 1932. However, reliance on the Economy Act requires certain analyses and administrative findings, which many agencies have found difficult and costly to perform. This has reduced the potential usefulness of the statute. Furthermore, for IT procurements, other statutes provide a more flexible authority for interagency acquisitions.

Thus, in 1949 Congress created GSA and granted to it certain powers to procure many types of goods and services on a centralized basis for use by federal agencies. In addition, Congress established several revolving funds through which GSA could purchase goods and services for use by other federal agencies on a cost-reimbursable basis. The IT Fund statute, 40 U.S.C. Section 757, is one of these. The General Supply Fund statute, 40 U.S.C. Section 756, on which GSA relies in support of its multiple-award schedule program, is another.

Under the IT Fund statute, GSA "is authorized to enter into multiyear contracts for the provision of information technology hardware, software or services" to other agencies and to "establish rates to be charged agencies [that are] provided, or [that will] be provided, information technology resources through the fund." GSA relies on its IT Fund authority as the basis for many of the important support services contracts used by agencies. It also relies on the statute to support the operations of its Federal Computer Acquisition Center.

In 1965 Congress passed the Brooks Act, 40 U.S.C. Section 759, extending GSA's powers to include responsibility for the acquisition and management of all automatic data processing resources by agencies. Under the Brooks Act, GSA could acquire the resources itself for use by other agencies, or it could authorize those agencies to acquire the resources directly for themselves. Also through such delegations of procurement authority, GSA could authorize agencies to share specific resources or to acquire them through the use of another agency's contract.

Each of these various statutory grants of power is independent of the others. Thus, both the General Services Administration's Board of Contract Appeals and the General Accounting Office have recognized that GSA's powers to supervise and approve interagency transactions under the Brooks Act were entirely independent and unrelated to the Economy Act. (See, for example, Integrated Systems Group Inc. v. General Services Administration, GSBCA No. 13108-P, 95-1 BCA Paragraph 27,484 ("The Economy Act is pre-empted by the Brooks Act in those instances where the subject of an interagency transfer is automatic data processing equipment or resources."); 55 Comp. Gen. 1497 (1976) (Interagency agreement entered into by GSA under authority of the Brooks Act is not subject to limitations on use of the Economy Act.).

Furthermore, GAO consistently has ruled that separate statutory authorities to conduct interagency transactions of the sort provided for the IT Fund and General Supply Fund are not limited by other statutes. (See, for example, 52 Comp. Gen. 128 (1972) (Interagency transactions authorized by Environmental Protection Agency legislation are not subject to the Economy Act.); B-167790 (Sept. 22, 1977) (Department of Housing and Urban Development statutory authority to enter into agreements with the secretary of the Army for flood insurance studies is not subject to the Economy Act.).

Similarly, it is clear that GSA's authority under the IT Fund statute is not limited in any way by the Brooks Act or its repeal. Accordingly, the National Defense Authorization Act neither expressly nor implicitly amends 40 U.S.C. Section 757. In fact, Section 5605 of the National Defense Authorization Act includes an amendment to Title 44 of the U.S. Code in which Congress specifically recognizes the continued viability of the IT Fund. Thus, the National Defense Authorization Act amends 44 U.S.C. Section 3504—which had granted the Office of Management and Budget authority to coordinate certain actions under the IT Fund statute and the Brooks Act—to refer, instead, to the IT Fund statute and the new ITMRA.

Clearly, Congress intended that the IT Fund authorization would continue as before, even after the effective date of ITMRA. Although GSA's authority under the IT Fund remains subject to OMB's rather narrow coordinating authority as set forth in 44 U.S.C. Section 3504, it is totally independent of ITMRA and of OMB's new authority thereunder.

In March, GSA's general counsel issued a memorandum in which she expressed a contrary view. In the memo, she said ITMRA precludes GSA from continuing to engage in multiple-agency or governmentwide procurement support programs in the IT area unless specifically authorized to carry out such programs by OMB.

However, her memo included no citation to any legal authority and did not explain the basis for her conclusion. Furthermore, it did not even address the statutory provision under which the IT Fund was authorized.

Hopefully, GSA officials will review this issue more carefully and reach a more thoughtful conclusion before unnecessary damage is done to these very successful programs.

**

Peckinpaugh is a member of the government contracts section of the law firm of Winston & Strawn, Washington, D.C. His column can be read on FCW's Web page at http://www.fcw.com. For more information, contact him at carl@carl.com.