1. Purpose

On October 4, 2002, the Office of Management and Budget (OMB) issued a memorandum to the Heads of Departments and Agencies that mandated new business rules for intra-governmental transactions, that is, transactions between Federal agencies.

The new business rules apply to all purchases of goods and services by U.S. Geological Survey (USGS) from other Federal agencies and all purchases of goods and services from USGS by other Federal agencies. The new business rules do not apply to purchases made with a bankcard. In the future, the Director may exempt purchases that are connected with a national emergency or that involve considerations of national security.

2. Ordering Goods and Services from Federal Agencies

A. Federal Procedures
A Federal agency determines that a requirement will be fulfilled by another Federal agency. The buying agency prepares and transmits an intra-governmental order to the providing (selling) agency. The two agencies may negotiate before preparation of the order. The selling agency may prepare the order for the buying agency.

An order may contain consolidated or summary information. Additional information, such as a statement of work, occupancy agreements, terms and conditions, specifications, and so on may be attached to the order, if desired or necessary for order fulfillment and payment.

The intra-governmental order must be authorized and approved in accordance with existing agency policies before transmittal to the seller. The buying agency includes on the order the appropriate funding information and citation.

An intra-governmental order is deemed accepted when signed by authorized officials of both the buying and selling agencies, or when the order is issued in response to a quotation or proposal tendered by the selling agency.

The buying agency provides electronic or hard copies of the intra-governmental order to the selling agency's administrative or program offices responsible for ordering, acceptance, and payment.

B. USGS Procedures
The USGS cost centers follow the Federal guidelines described above. In addition, USGS cost centers adhere to the policies and procedures in USGS Manual 405.7, Obtaining Products and Services from Other Federal Agencies.

When the buying agency cancels an intra-governmental order which has been accepted, the selling agency is authorized to collect costs incurred prior to cancellation of the order plus any termination costs.

3. Identifying Intra-governmental Transactions

A. Federal Procedures
The buying agency assigns each intra-governmental order a number. The buying agency may also assign an interagency agreement number. Nevertheless, the order number assigned by the buying agency is the document control number. Agencies may not assign the same order number, that is, document control number, to more than one order. The selling agency records the buyer's intra-governmental order number, that is, document control number, in its accounting system.

Federal agencies that acquire goods or services from another Federal agency and Federal agencies that provide goods or services to another Federal agency obtain and use Dun & Bradstreet Universal Numbering System (DUNS) numbers as unique business location identifiers.

B. USGS Procedures
For fiscal year (FY) 2003 USGS utilizes the order numbers assigned through BASIS+. The Office of Financial Management (OFM) tracks the buying agency intra-governmental order number for Department of the Interior (DOI) customers only, in a separate application used for intra-deptartmental eliminations. Beginning in FY 2004, the buying agency order number will be the reimbursable agreement number in BASIS+ and Federal Financial System (FFS).

C. DUNS Numbers in USGS
Every USGS cost center will have a unique DUNS number. When a USGS cost center purchases goods or services from another Federal agency or sells goods or services to another Federal agency, the cost center uses its unique business office DUNS number. OFM will make a list of these numbers available on a web site in the near future. OFM will be responsible for maintaining the list of DUNS numbers. Cost centers are responsible for providing OFM with updated information to associate with the DUNS number.

4. Accounting for Intragovernmental Transactions

A. Federal Procedures
The buying agency records an obligation in its financial system before transmitting the intra-governmental order to the selling agency. When recording the obligation, the buying agency records the intra-governmental order number and any interagency agreement associated with the order.

The selling agency records an unfilled customer order immediately upon receipt and acceptance of an authorized intra-governmental order.

B. USGS Procedures
When a USGS cost center sells services to another Federal agency, the cost center records an Reimbursable Agreement (RA) document in BASIS+. The RA document is then uploaded to FFS.

5. Billing Federal Agencies for Goods and Services and Paying Federal Agencies for Goods and Services

A. Federal Procedures
Federal agencies issue bills according to the terms reflected in the intra-governmental order, but not later than 10 days after delivery of the goods or services provided.

In FY 2003 and until further notice Federal agencies process bills to each other through Treasury's Intra-governmental Payment and Collection (IPAC) system.

Only the responsible billing party may initiate the IPAC transaction. The buying and selling agencies may negotiate responsibility for initiating the IPAC transfer. The intra-governmental order must explicitly identify the responsible billing party. If the intra-governmental order does not specify the responsible billing party, the selling agency is deemed the party responsible for initiating the IPAC transfer.

In addition to other required elements, an IPAC transaction includes the buying agency's intra-governmental order number, the DUNS number for the buying agency's site location, the appropriation symbol associated the account from which the buying agency will make payment, the seller's bill number, the DUNS number for the selling agency's site location, and the appropriation symbol associated with the account to which the selling agency will record the collection.

B. USGS Procedures
USGS cost centers follow the Federal guidelines described above for billing other Federal agencies. In addition, USGS cost centers follow the procedures described in USGS Manual 336.1, Billing Other Federal Agencies.

Billing another Federal agency based on obligations creates an advance payment to USGS. Because Federal agencies may not accept advance payments from each other, USGS cost centers should bill other Federal agencies based on expenditures. In other words, USGS cost centers bill other Federal agencies only when USGS has expended funds in order to provide goods or services for another Federal agency.

6. Advances from Federal Agencies

A. Federal Procedures
Federal agencies may not make or accept advance payments from other Federal agencies for service orders unless explicitly required by law. Federal agencies may make and accept progress payments and periodic payments.

Federal agencies may make and accept advance payments for orders for goods that exceed $1,000,000. The advance may not exceed 50 percent of the order amount. Unless explicitly required by law, Federal agencies may not make or accept advance payments for orders for goods that are less than $1,000,000.

For advance payments that are permitted, the buying agency records the payment as an "advance to." The selling agency records the payments as an "advance from."

For all advance payments made before or after January 1, 2003, the effective date for the OMB's new business rules, the selling agency provides monthly status reports to the buying agency reflecting revenue earned. As the selling agency makes expenditures, using part of the advance, and reports to the buying agency, the buyer and the seller make appropriate adjustments to their respective advance accounts.

B. USGS Procedures
For FY 2003 only, OFM will provide a status report to DOI customers only.

During the remainder of FY 2003, OFM will work with the cost centers to return advances accepted from DOI customers. All advances from DOI bureaus, other than those specifically authorized by law, will be returned by September 30, 2003.

A USGS cost center that has accepted an advance payment from a Federal agency, other than a DOI bureau, in connection with an intra-governmental order signed since January 1, 2003, for services or for goods that cost less than $1,000,000, shall return the unexpended portion of the advance payment to the other Federal agency as soon as possible, but no later than September 30, 2003.

The OFM will not accept payments from Federal agencies that create advance. If a cost center bills a Federal agency for an amount greater than the expenditures incurred and the Federal agency tenders payment, OFM will place the difference between the amount paid by the Federal agency and the expenditures incurred by USGS in a suspense account and act to return it to the customer.

Instructional Memorandum OFS 2003-012 describes the procedures for identifying advance payments from other Federal agencies and for returning advance payments to Federal agencies.

7. Resolving Disputes with Federal Agencies

The buying agency and the selling agency are expected to resolve any dispute within 30 business days of the billing date using existing dispute mechanisms. If the dispute cannot be resolved using these mechanisms, the matter must be referred on the next business day to a dispute resolution task force for a binding decision. Administrative costs and penalties may be levied on the agencies involved in the dispute referral.

8. Effective Date

The USGS rules are effective as of the date of this instructional memorandum. OMB's rules were effective as of January 1, 2003.