Here is some language the Corp of Engineers wants to put an Inter-Agency Agreement:

"If liability of any kind is imposed on the United States relating to USACE's provision of goods or services under this IAG, USACE will be fully accountable for its actions. The BOP shall remain responsible as the program proponent for providing such funds as are necessary to discharge the liability and related costs."

USACE says that, under the Economy Act, the BOP is required to be financially responsible for any intentional or unintentional negligent, criminal, or other act undertaken solely by the USACE directly or indirectly related to the provision of services. The "fully accountable" stuff means that the USACE will accompany us to the hill if we need more money for its mistakes.

Has anybody ever encountered this before. I see nothing in the Economy Act that requires the Requesting Agency is responsible for funding the Corp mistakes.

Anybody have a comment???

Scott

By Anonymous on Friday, December 01, 2000 - 05:42 pm:

Scott--

I'm not positive, but that language sure sounds like it could be a violation of the Anti-Deficiency Act. My thinking is that you have no idea what type of financial obligation you are making when you enter into this arrangement. You are essentially agreeing to "pick-up the tab" for any costs related to Corps negligence while they are performing the services you require. It's basically a hold harmless clause.

I don't think a K.O could make a determination that this action is in the best interest of the Government, as required by FAR 17.5.

Anon

By joel hoffman on Saturday, December 02, 2000 - 11:22 am:

Scott, I have no idea what "fully accountable" means, if the proponent agency would be responsibile for cost overruns. It might mean the COE is responsible to "account for all expenses" or will be held to "professional standards of conduct", or its actions and those of its employees are subject to the same laws and regulations as any Government organization or employee.

This is not to defend the COE!!! I can only attempt to explain to you why the COE, as a Government entity, can't fund any overruns which might occur in performing services for you.

One problem is that the COE is not separately funded for your program. They are essentially a "reimbursible" organization, fully dependant upon funding for the major programs they execute or perform services on. There is some general Army O&M funding for certain overhead elements but most everyone else is reimbursible.

Another problem, of course, is that there are no appropriations legally available to warrant the COE's services. Appropriations are subject to "bonafide need", time, "purpose", etc. statutes. Funds types can't be co-mingled or used to augment overruns or increases on another program. Contrary to Anonymous' statement, I believe that use of other than funds specifically appropriated for your program WOULD BE a violation of the Anti-Deficiency Act.

Anonymous, please explain how you conclude that the stipulation in the agreement would violate the Anti-deficiency Act. All (most? - the COE certainly is) government agencies and employees are subject to this act.

Thus, the COE acts as an "agent" of the client. I believe that this is the legal significance of the IGA. The COE would be no more or no less "pecuniarily liable" for its negligence or that of its employees than if employees in your own organization or any other Government organization were performing those services for you. It's just an unfortunate fact of life, concerning one Government entity performing services for another.

Please tell me if you can find another Government organization which can reimburse you for negligence or other overruns. This is a disadvantage of using intergovernmental services, in lieu of using a commercial source. However, I submit to you, it is sometimes very difficult to get a contractor to fully (100% - no loopholes)warrant or guarantee their professional services or the consequences, thereof.

As an aside, I am amused when I hear this type language within my own (COE) organization - Engineering argues that they are "responsible" or "accountable" for the design of our projects. Yet, to my knowledge, nobody in Engineering has ever been reprimanded, censured, demoted or fired for any design related shortcomings in my program. On the contrary, careers have been built around one particular design - which has been around since the 1980's and is still being corrected on new contracts!

Happy Sails! Joel

By Anonymous on Tuesday, December 05, 2000 - 09:51 am:

It sounds as if the requesting agency, by signing such an agreement, would be agreeing to fund any additional costs resulting from the negligence of the Corps. If such costs were to exceed the amount available in the appropriation, then I believe that could be a violation of the Anti-deficiency Act.

Like I said above, I'm not sure about this; but I do know that if an agency agrees to pay for services for which funds haven't been made available then the Anti-Deficiency Act comes into play. The stipulation described sounds like a hold-harmless clause. I personally know that hold-harmless clauses can lead to violations of the Anti-Deficiency Act.

I don't know what other stipulations are in the agreement. But if there is nothing that limits the Corps from charging damages resulting from their negligance to the requesting agency, then I would think that even if the Anti-Deficiency Act doesn't apply, the agreement shouldn't be entered into. It protects the performing agency from damages. My opinion.

By joel hoffman on Wednesday, December 06, 2000 - 12:32 am:

Anon, are you aware of any Government Agency that funds overruns or errors, while acting as an agent for another Agency? Do you have any previous Inter-Agency experience in this area?

Anon and Scott, to allay your concerns somewhat, my guess is that the COE would be the contracting agency in this type arrangement. This is not always the case but usually. Scott, am I correct, here? Who will be the contracting office/PCO for your IAG work? Will it be your agency or the COE?

If the COE will be the Contracting Office, the COE contracting officials would be the accountable parties for any "Anti-deficiency Act" violation, committed while administering a contract.

We recently had a case where the client provided expired funds which were unintentionally misrepresented as active or current appropriations. Our contracting activity had been extensively funding numerous contracts with these funds. I don't know the end result but there was an intensive investigation. I believe the client finally replace the expired funds with current funds. You see, it can work both ways!
Happy Sails! Joel

By Scott on Wednesday, December 06, 2000 - 02:03 pm:

Joel:

I have no "Anti-Deficiency" problems with the language. However, I wonder why the COE just does not apply a "administrative fee"? To me, the COE failing to pay a bill on time and has to pay prompt payment interest is not an actual cost of performing the work. To which the Act limits my agency to paying. Agencies are allowed to charge a fee, Dept. of Commerce charges 2% for managing our purchase card program.

It seems a better way...and more understandable.

Scott

By joel hoffman on Wednesday, December 06, 2000 - 11:50 pm:

Scott, I understand your point of view. Of course, I don't make policy in this area for COE. :)) Happy Sails! Joel