Economy Act: An Overview
Fast Facts
We testified about the Economy Act before the House Committee on Appropriations, Subcommittee on Financial Services and General Government.
Congress enacted this law in 1932. It authorizes transactions for goods and services between agencies across all three branches of government.
We testified about the law's requirements for these transactions. For example, agencies can only make transactions under the Act to accomplish work they are already authorized to do. They can't use it to create programs or to make up for a budget shortfall.
We also testified about our work and legal decisions involving the Act.
A photo of the Capitol and the words GAO Testimony to Congress
Highlights
This product is also designated as B-338717, Sept 15, 2026.
The Economy Act provides authority for intra- and interagency transactions between agencies and major organizational units of agencies. The Act broadly applies to federal entities for the procurement of a wide variety of goods and services. However, the Economy Act does not authorize an agency to circumvent statutory limitations on its use of appropriated funds. An agency may only procure goods and services under the Economy Act that it is already authorized to procure, and Economy Act transactions must comply with the Act’s requirements, as well as general appropriations law principles, such as the purpose statute, the bona fide needs rule, the Antideficiency Act, and the rule against augmentation.
GAO’s engagement work on agency financial operations has touched on Economy Act transactions in a variety of contexts and we have issued numerous legal decisions applying the Economy Act, many of which are cited in the testimony.
For more information, contact Shirley A. Jones at jonessa@gao.gov.