CAN THE GOVERNMENT ACCEPT FREE SERVICES? IT DEPENDS
A Facebook friend of ours recently wondered whether the government could accept free services to complete and repair the border wall along the US southern border. Although there are many angles to this issue, strictly speaking from a procurement perspective, the answer here is probably “no”. The federal government cannot usually accept free services and goods. This prohibition dates all the way back to the late 19th century when Congress passed the Anti-Deficiency Act. The simple intent was to prevent people or companies from providing something of value for free and later submitting a claim, thus busting an agency’s budget and requiring additional appropriations from Congress. Like most government rules, however, there are exceptions. One is in the case of a true emergency involving “imminent” danger to safety of human life or the protection of property. This exception has been discussed frequently over the past year given that President Trump declared a national emergency over COVID-19. Other exceptions are also tied closely to public health circumstances involving the military or the Public Health Service. Outside of these areas, however, contractors cannot offer something for free unless they expressly agree to do so in writing via a contract. For GSA Schedule contractors, however, this does not mean that the government doesn’t want to know about free services or goods you provide in the course of your commercial business. Although the government may not be able to accept them, GSA rules state that contractors must disclose them so that the government can take advantage of lower overall prices. More than one company has found out the hard way that “free” can cost you something.