WASHINGTON, May 17 (UPI) -- The U.S. Pentagon will still be allowed to do business with the Federal technology Service.
Despite an ongoing interagency contracting fight, the U.S. Department of Defense Inspector General has decided against restricting the Defense Department's business with the General Services Administration's Federal Technology Service regional contracting shops, sources at both agencies said, GovExec.com reported Tuesday.
In a possibly related development, the GSA will acquiesce to the Pentagon's disputed interpretation of fiscal law for all future Defense acquisitions, agency and industry sources told GovExec.com.
Still apparently unresolved is whether the GSA will agree to apply Defense's legal interpretation retroactively, as the Pentagon would like. If the GSA were to do that, the cash-strapped agency would be forced to refund money to the Pentagon, perhaps hundreds of millions of dollars, sources told GovExec.com.
The Department of Defense, in turn, probably would have to return those funds to the U.S. Treasury. Pentagon and GSA acquisition officials met in person at least once last week to discuss the matter, an industry source said.
Earlier this year, the Department of Defense Inspector General was about to declare four regional FTS contracting shops off-limits for departmental purchases worth more than $100,000. Such a move would have been a huge blow to the GSA, which already is reeling from sharply declining business.
The two agencies continue to fundamentally disagree, but sources from both agencies told GovExec.com that Department of Defense IG recently decided not to issue a negative finding against the four regional centers. A GSA source said the IG backed off only after receiving assurances that the GSA would accept the Pentagon's reading of fiscal law for all future Pentagon acquisitions.
