Doan wants lawmakers to rule on legality of multiyear funding

Differing opinions about whether agencies can carry funds beyond the fiscal year for which they were appropriated have chilled relations between the General Services Administration and customer agencies, especially the Defense Department. GSA Administrator Lurita Doan said she would like Congress to clear up the confusion.

Doan said she thinks GSA has the right by statute to carry over customer funds, and one of her legislative priorities for 2007 is to settle the debate.

For decades, GSA was able to hold money for agencies that had money earmarked for projects but did not spend it by the end of the fiscal year. That practice is known as multiyear funding. Government auditors who were concerned about potential abuses cracked down on the practice after fiscal 2005, resulting in millions of agencies’ “parked” dollars being returned to the Treasury Department.

Doan said multiyear funding is a legitimate option for GSA to offer customers, although not everyone at GSA shares her certainty about its legality, she added.

“We already have the right to multiyear funding,” she said, “but what we need to do is have that sense of Congress that this is the best use [of funds] for the American taxpayer.”

If Congress doesn’t clarify the issue, GSA could ask the Office of Management and Budget’s procurement office or the Government Accountability Office for a ruling, procurement experts say.

Doan said an ability to hold funds beyond Sept. 30, the end of the fiscal year, is one way that GSA brings “true value to the federal government and the business community.” Other agencies must return unused appropriated dollars to Treasury at the end of each fiscal year. GSA is not bound by that rule, she added, because GSA was created under different legislation.

Some procurement experts agree that GSA should have the authority to carry over funds. GSA lost its competitive edge when it dropped the multiyear funding option, they say. But when two sides don’t agree on how to interpret multiyear funding regulations, customers win because it’s their money, said Larry Allen, executive vice president of the Coalition for Government Procurement, a group that represents companies that sell commercial services and products to the federal government.

Lawmakers are not inclined to endorse multiyear funding, said Alan Chvotkin, senior vice president and counsel for the Professional Services Council, which represents the government services industry.

“It’s nice to have if you can get it,” Chvotkin said, but appropriators who control the money don’t relish losing control of spending through measures such as multiyear funding.

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