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B-199921 1 (1981-06-10)

handle is hein.gao/gaobadjlh0001 and id is 1 raw text is: ~ THE COMPTROLLER GENERAL DECISION OF THE UNITED STATES WASHINGTON. 0. C. 20548 FILE: B-199921 DATE: June 10, 1981 MATTER OF: The General Services Administration's General Supply Fund DIGEST: 1. The inventory in the General Services Administration's (GSA) General Supply Fund does not constitute a budget- ary resource against which obligations may be incurred. The Antideficiency Act, 31 U.S.C. S 665, is violated when obligations are incurred in excess of budgetary resources. 2. GSA is authorized to pass on to requisitioning agencies the costs of terminating contracts for the convenience of the Government which the General Supply Fund might incur as a result of order cancellations by those agencies. The General Counsel of the General Services Administration (GSA) has requested our;opinion on two questions concerning GSA's General Supply Fund.. Firft, how should the provision of the Antideficiency Act contained in 31 U.S.C. § 665(a) be applied to the General Supply Fund? Second, is it proper for GSA to pass on the costs of terminat- ing contracts for the purchase of furniture to the agencies which cancelled their furniture orders with the General Supply Fund? GSA has a statutory duty to procure personal property and non- personal services for the use of Federal agencies. 40 U.S.C. § 481 (1976). Congress established the General Supply Fund to assist GSA in carrying out this duty. 40 U.S.C. § 756 (1976). Through the Fund, GSA makes consolidated and bulk purchases of goods and services that are commonly used by the agencies. Apparently, GSA's normal procurement procedure is as follows. First, GSA accepts orders, sometimes accompanied by advances, from its customer agencies. Second, it makes contracts with suppliers to fill those orders. Third, it receives the goods from the supplier and makes payment for them. Fourth, it delivers the goods to the customer agencies and seeks reimbursement from them to the extent that pre- viously received advances are not sufficient to pay for them. Because GSA maintains substantial inventories and because suppliers are paid before customers make reimbursement, the General Supply Fund frequently has cash flow problems. GSA reports that these problems have recently become acute for a number of reasons. First, an extraordinary demand was placed on the General Supply Fund to provide funds for disaster and refugee relief in advance of

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