[Questions Concerning GSA Food Service Concession Contract]

A decision was requested regarding the validity of a concession contract between the General Services Administration and a food services contractor. Under the contract, which has been in effect since 1971, the contractor operates food concessions in public buildings; no rent is charged, but the contractor must maintain in its accounts a reserve fund that is used to purchase new equipment, which will revert to the government upon contract termination. Concern had been expressed that the contract did not comply with: (1) 31 U.S.C. 3302, which provides that government receipts must be deposited in the Treasury; and (2) 40 U.S.C. 303, which requires that federal agencies lease property for monetary consideration only. GAO held that: (1) the contract arrangement does not violate 31 U.S.C. 3302 because the reserve fund is maintained only on paper, rather than in a bank; and (2) the contract does not violate 40 U.S.C. 303 because it constitutes a license to operate concessions, rather than a lease.