The Economy Act of 1932, as amended, 31 U.S.C. 1535, authorizes the agency (ordering agency) to place orders for goods and services with another federal agency or a major organizational unit of an agency (performing agency). An Economy Act order can be used when: 1) funds are available, 2) the head of the ordering agency determines that it is in the best interest of the government, and, 3) the head of the ordering agency decides that ordered goods or services cannot be provided as conveniently or cheaply by contract with commercial enterprise. These must be shown by a Determination and Findings (D&F) document, prepared by the ordering agency. The performing agency must be able to provide the goods or services in-house or by contract, and parties should verify under Part 8 of the FAR that the responsibility for this good or service is not assigned to another agency of the federal government. Authority for the ordering agency to do the work in question must be independently authorized. It should be noted that funds made available to the performing agency, but not yet obligated by the performing agency, shall be de-obligated and returned to the ordering agency at the end of their period of availability.
The Economy Act cannot be used for partnerships with non-federal entities, and is only used with federal agencies when another more specific transfer authority is not available. (Some agencies have their own transfer authorities that do not include de-obligation requirements and D&Fs, such as Section 632 of the Foreign Assistance Act, which the Corps may accept under the Chief’s Economy Act (see below)). When entering into an Economy Act agreement with a non-DoD entity, the Corps must enter into an agreement by which the ordering agency agrees to pay all costs.