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    We want to transfer ownership of our equipment (already purchased with 3400 funds) to our partnering agency. The partnering agency may then purchase (with their 3600 funds) the same model equipment from the vendor, and when it finally is produce they can transfer ownership of that new piece of equipment to us to replenish our stock. There will be no exchange of funds between us and the agency, only equipment. Will this be legal to execute?


    Probably not, since it might appear that the involved agencies were attempting to employ the Economy Act which “…may not be used by an agency to circumvent conditions and limitations imposed on the use of funds” (see FAR Subpart 17.5).
    Your question is unanswerable since your background information is too obscure. 

    ·  What is the value of the equipment item and the replacement item?
    ·  Is the existing equipment item listed as a line item of Government-furnished property and under the stewardship of a contractor under FAR 52.245-1?
    ·  Have the two agencies consulted with their Accountable Property Officers on this issue?
    ·  Have the two Accountable Property Officers talked to each other about a possible interagency solution?
    And though you asked this question as a Government Property question – it might be more of an appropriations question – as you also stipulated that there were 3600 funds versus 3400 funds for the items.  3600 funds (The “color” of the money) is appropriated for RDT&E.  3400 funds are appropriated for O&M.  Just as a general thought, I would be very caution about crossing those two lines of appropriations – regardless of the fact that it is for the same type of unit – as it appears that you are gaming the system. 
    As homework, please review the following AAPs for relevance to your situation:

    ·  USMC transferring Ownership to US Army
    ·  Can these 3600 funds be used to purchase an end item?
    ·  DoDI 5000.64 Accountability and Management of DoD Equipment and Other Accountable Property
    As embedded

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