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  • Question

    Can a program use Procurement funds to have a subcontractor to the prime contractor hire cleaners, procure personal protective equipment (PPE), etc.?


    Answer

    Procurement funding is used for the acquisition of production articles, including procurement and production direct support costs such as production testing, quality assurance, and production engineering, equipment assembly whether performed under contract or in-house when required to produce and deliver a usable end-item intended for operational use.  The following can also be funded with procurement if they can also be tied to a complete useable end item:

    • Equipment integration or assembly
    • Support elements necessary to support the end item such as data, initial factory training, support equipment, and interim contractor support required to support procurement of a new system
    • Modification kits and material for modernization programs and major service life extension programs, including the labor associated with incorporating these efforts as part of the end item
    • Initial spares and repair parts for the supply system upon initial fielding of a new weapon system
    • Initial logistics
    • Logistics updates required due to equipment modification or upgrade
    • First destination transportation
    • Training equipment
    • Useable training package for systems in production

    Per Title 31 U.S.C. Section 1301, subsection (a) provides that appropriations shall be applied only to the objects for which the appropriations were made, except as otherwise provided by law.  In other words, agencies must spend money only for the purposes Congress specifies in the appropriation act.  Every expenditure cannot  be included in the appropriations act and is not expressly authorized by Congress

    Agencies have discretion in carrying out the intent.  GAO has held on a number of occasions that an expenditure that may be reasonably related to a general appropriation may not be paid out of that appropriation where the expenditure falls specifically within the scope of another appropriation.  To assist, the GAO has determined a three-part test for analyzing whether an obligation is properly funded by a particular appropriation. The three parts are as follows:

    • The expenditure of an appropriation must be for a particular statutory purpose, or necessary and incident to the proper execution of the general purpose of the appropriation.
       
    • The expenditure must not be otherwise provided for; it must not fall within the scope of some other appropriation.
       
    • The expenditure must not be prohibited by law.

    (63 Comp. Gen. 422, 427–28 (1984); B-251887, July 22, 1993)

    Whether the cleanup and procurement of personal protective equipment can be considered as incidental to production would require an assessment by the Contracting Officer (to determine if it’s within scope of the existing contract) and the Comptroller (to determine if it falls within the original intent of the budget exhibits).  I would also recommend that you talk to the local Attorney since COVID 19 is uncharted territory for many of us within DoD.  

      

     

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