Contracts--Food Services--Retention of Percentage of Receipts for Repairs and Improvements

B-119832: Aug 30, 1955

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GAO was asked for its opinion on proposed standard food service contract forms for operations in Government-owned or Government-leased buildings outside of the District of Columbia. The standards include reserve costs for repair of equipment and the percentage of gross revenue that should be deposited in that reserve. Also, GAO was asked about how evaluation of bids for food services contracts can be evaluated.

GAO found that use of such reserve for repair and replacement of Government-owned equipment are contrary to federal law, which requires the deposit of money for the use of the United States, and money derived from rentals, into the Treasury as miscellaneous receipts and prohibits inclusion of repair and improvement provisions in leases. GAO also found that evaluation of bids for food services in Government-owned or leased buildings on the basis of the sales price to be charged employees for food may be regarded as advantageous to the Government price, and other factors considered.

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