[Questions Concerning Advance Payment for Maintenance of Equipment]

The Veterans Administration (VA) requested a decision concerning the legality of an advance payment it made for an item which was deleted from a maintenance service contract. Federal regulations allow advance payments where authorized by specific appropriations, laws, or the President and where an agency head determines it to be in the public interest. GAO found that, since these exceptions did not apply in this case, the advance payment should not have been made. Because of the advanced stage of contract performance and because satisfactory performance was expected for the remainder of the contract period, GAO found that no corrective action was required; however, it advised VA to adhere to regulatory prohibitions against advanced payments in the future.