Propriety of Agreement

The General Services Administration (GSA) requested a decision concerning the propriety of agreement by GSA to certain indemnity provisions in contracts and tariffs procuring public utility services for government agencies and establishments. In response to the request, GAO held that GSA has the authority to procure power for the government under tariffs. Additionally, since GAO has not objected in the past to the procurement of power by GSA under tariffs containing the indemnity clause, GAO could see no reason to object to the purchase of power under the present contracts containing essentially the same indemnity clause. In any event, GAO felt that little purpose would be served by establishing a rule which prevents the United States from procuring a vital commodity under the same tariff restrictions that other customers are subjected to, if the utility insists that the restrictions are non-negotiable. However, because the possibility exits that the agreements could result in future liability in excess of available appropriations, GAO believes that GSA should inform Congress of the situation.