Economy Act

 

Last updated: 3 Jan 07 by TWP

The Economy Act, 31 USC 1535, provides legal authority for elements of the U.S. government to provide support to each other on a reimbursible basis. The authority can be used for elements of DoD to provide support to other DoD elements, or to interagency organizations.

(There are separate statutory authorities for elements of the government to provide mutual support, either on a reimbursible or non-reimbursible basis. The guidance here applies only to Economy Act transactions, and may not apply to transactions under separate legal authority).

Process / Approval Requirements for Support Provided Through the Economy Act
For DoD interservice support:
Reference: DODI 4000.19, Interservice and Intragovernmental Support, 9 Aug 1995
1) Head of requesting activity requests support from head of supplying activity. “DoD activities may request support from other DoD activities when in-house capabilities do not exist, or when support can be obtained more efficiently or effectively from other existing DoD capabilities.” (Para 4.3)
2) Head of requesting activity makes Economy Act determinations (see below)
3) Determinations are signified/documented in written support agreement (DD Form 1144). “No further written determinations are required for agreements between DoD activities.” (Para 4.3)		 For Intragovernmental/Interagency support:
Reference: DODI 4000.19, Interservice and Intragovernmental Support, 9 Aug 1995
1) Head of requesting activity requests support from head of supplying activity.
2) Head of requesting activity makes Economy Act determinations (see below).
3) Determinations are signified/documented in written support agreement (DD Form 1144).
4) “The determinations must be approved by the head of the major organizational unit ordering the support and attached to the agreement. This authority may be delegated… not lower than Senior Executive Service, Flag, or General Officer.”
Economy Act DeterminationsTo comply with the Economy Act, transactions must meet all of the following criteria:

1) Funds are available
2) The head of the ordering agency or unit decides the order is in the best interest of the U.S. government
3) The agency or unit to fill the order is able to provide or obtain 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.

Additionally, DODI 4000.19 requires reporting of any contracted support provided to a DoD receiving activitity from a non-DoD supplying activity. (Para 4.4.3).