the case with regard to federal agency purchases through GSA pursuant to its authority under ITMRA, 40 U. S.C. 1412(e) (now the Clinger-Cohen Act). In accordance with that provision, Director, Office of Management and Budget, has designated GSA to carry on government wide information technology (IT) programs. Interagency agreements with GSA for use of the programs authorized by ITMRA are subject to the requirements of ITMRA, and not the Economy Act. Such programs are funded on a reimbursable basis through the IT Fund. The IT Fund is a statutory revolving fund that is available for expenses of providing IT to federal agencies. 40 U.S.C. 757(b)(2). Funds obligated against the IT Fund are available without fiscal year limitation. When an agency transfers funds to GSA pursuant to an interagency agreement, those funds funds are obligated against the IT Fund. Therefore, those funds are not subject to deobligation if GSA is not able to provide the supplies or services until after the time in which those funds would have otherwised expired. However, the interagency agreement must comply with the requirements discussed below. In addition, the agency providing the funds must have a bona fide need for the supplies or services when the funds are transferred to GSA and must meet an exception to the bona fide need rule to the extent that the supplies or services will not be delivered until the year following the year for which the funds were appropriated. To the extent that funds are provided to GSA that exceed those necessary to satisfy the requirement specified in the interagency agreement, those funds are subject to deobligation once the specified requirement is delivered.
In order to obligate an appropriation, an agency must execute a binding written before the end of the period of availability for obligation of the appropriation or fund that is used. 31 U.S.C. 1501(a). Therefore, an agency procuring supplies or services through GSA pursuant to its authority under ITMRA would need to enter into such an agreement with GSA that specifies the supplies and/or services to be procured as well as appropriated funds that are available for the purchase.
As you indicate, your issue with regard to the time period within which a purchase must be accomplished raises the bona fide need rule. This basic principle of appropriations law is contained in 31 U.S.C. 1502(a):
The balance of an appropriation or fund is limited for obligation to a definite period. It is available only for payment of expenses properly incurred during the period of availability or to complete contracts properly made within that period of availability and obligated consistent with Section 1501 of this Title. However, the appropriation or fund is not available for expenditure beyond the period authorized by law.
In order to comply with the statute, a federal agency may obligate a fiscal year appropriation only to meet a bona fide agency need in the fiscal year the appropriation was made. Funding for Air Force Cost Plus Fixed Fee Level of Effort Contract, B-277165, Jan. 10, 2000, 2000 CPD P 54; Funding of Maintenance Contract Beyond Fiscal Year, B-259274, May 22, 1996, 96-1 CPD 247; Magnavox-Use of Contract Underrun Funds, B-207453, Sep. 16, 1983, 83-2 CPD 401; To the Secretary of the Army, B-115736, 33 Comp. Gen. 57 (1953). The bona fide need analysis differs depending upon whether the contract is a supply contract or a service contract. Violation of the bona fide need rule occurs when the work to be perforrned or the supplies to be delivered