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Doing Business with FOH and Interagency Agreements (IAAs)

As a non-appropriated federal agency, FOH operates much like a private sector organization. This means that we must cover our operating costs with funds collected through the services we provide. However, unlike our private sector counterparts, FOH makes no profit. By Congressional mandate, FOH may charge only our operating cost for services; no profits or fees.

The Economy Act

Agencies that partner with FOH to receive programs and services from FOH do so under the Economy Act of 1932, as amended (31 U.S.C. 1535), which allows Federal agencies to place orders for goods and services with another Federal agency when it determines that it is in the best interest of the government. The Economy Act was passed to help Federal agencies accomplish their missions efficiently and without duplication of effort.

Interagency and InterService Agreements

Agencies receive services through an agreement process. Authorized representatives from FOH and the requesting agency sign an Interagency or Interservice Agreement (IAA/ISSA, or IAA). The IAA serves to outline the goods or services to be furnished, reporting requirements, method for the transfer of funds, and if appropriate, acquisition authority for any contracts to be awarded pursuant to the IAA. In addition, agencies can be assured that FOH will comply with all Federal Acquisition Regulation (FAR) requirements via full and open competition when FOH procures any additional services for our customers.

Benefits of IAAs

The use of IAAs is preferable to our customer agencies because they are:

  • Simple. There is no specific format for an IAA except that it should be acceptable to both agencies; IAAs can be as simple as a one page document.
  • Fast. The process can be completed in days; no lengthy contracting process.
  • Flexible. As needs dictate, agencies can agree to make modifications quickly by simply appending an existing IAA.
  • Convenient. Payment for services may be made through funds transfer electronically using the agency’s preferred method such as the Intra-government Payment and Collection System (IPAC), Government Credit Cards, or the Military Interdepartmental Payment Request (MIPR) system.
  • Easily Terminated. There are no penalties for termination. IAAs may be terminated with 30 to 60 days notice with no “termination costs.”
  • Straightforward. Under the Economy Act, FOH cannot charge more than the actual cost of providing services. As a Federal entity, FOH cannot “make a profit” under any single IAA.

Download the IAA Fact Sheet For More Information

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