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GAO was asked to examine the administration of a March 1970 sale of personal property by the Research Laboratories, Environmental Science Services Administration (ESSA), Department of Commerce, under the exchange/sale authority. Specifically, Congress requested that GAO determine whether any law was violated in the March 1970 transaction by the Laboratories, ascertain the justification for carrying out the sale, and determine the role of the General Services Administration (GSA) in this type of transaction.

The exchange sale authority was established by section 201(c) of the Federal Property and Administrative Services Act of 1949, as amended (40 U.S.C. 481(c)). Policies and methods governing the use by executive agencies of the exchange/sale authority are contained in part 101-46 of title 41 of the Code of Federal Regulations.

Our examination revealed that several violations of the act and the Code occurred in the March 1970 exchange/sale transaction by the Laboratories. These violations are summarized as follows: (1) excess property was included in the sale, (2) the Laboratories did not intend to acquire similar items for all those sold, (3) property was sold that had not been utilized by ESSA before the sale, (4) nine items of equipment listed in a new or unused condition were sold, (5) ESSA did not screen Federal agencies outside the Department of Commerce known to use or distribute such property, and (6) no written administrative determination was prepared to apply the proceeds of sale toward acquiring property.

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