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B-215825 1 (1984-12-21)

handle is hein.gao/gaobadmbu0001 and id is 1 raw text is: ~UQsf~~CL cS~) B-21 5825 THE COMPTROLLER GENERAL OF THE UNITEC STATUE WASHINGTON, 0.C. 20548 DATE: December 21, 1984 MATTER C DIGEST: Army's Multiple Launch Rocket System Multiyear Contract 1. Advance procurement of economic order quantity (EOQ) materials and components is authorized only to support end items procured through authorized 5-year multiyear contract. Army improperly exercised option for procurement of EOQ items for the needs of a 6th year and is cautioned not to exercise an option for the needs of a 7th year as presently contemplated, unless it obtains specific statutory authority to do so. 2. Bona fide needs statute, 31 U.S.C. S 1502(a), provides that an appropriation may only be used to pay for program needs attrib- utable to the year or years for which the appropriation was made available, unless the Congress provides an exception to its applica- tion. The only exception for advance procure- ment of EOQ items is found in 10 U.S.C. § 2306(h) but the exception is limited to pro- curement of items needed for end items pro- cured by means of a multiyear contract. Authorized multiyear contracts may not cover more than 5 program years. 10 U.S.C. S 2306(h)(8). Therefore, exercise of an option for advance procurement of EOQ items for a 6th or 7th program year is unautho- rized. GAO does not accept Army contention that bona fide needs statute is inapplicable to multiple or investment type procurements. 3. Although sufficient lump-sum missile procure- ment funds were appropriated in FYs 1984 and 1985 for this purpose, Army cannot rely on fact that cognizant congressional committees were aware of its intent to exercise options for advance procurement of EOQ items for 6th and 7th year end items. It cannot be said that the Congress as a whole intended to pro- vide an exception to the bona fide needs OECIUION FILE: :)F:

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