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Department of Veterans Affairs
Office of the General Counsel
Washington, DC 20420
DATE: December 30, 1991
FROM: Assistant General Counsel (025)
SUBJ: Request for Advisory Opinion - Research Foundation Access to
Federal Supply Schedules
TO: Director, Acquisition Policy and Review Service (95A)
1. You have asked our office for an opinion concerning whether VA
research corporations, established pursuant to 38 U.S.C. 4161 et
seq., are authorized to purchase items from Federal Supply Schedules (FSS). In order for these research corporations to purchase items
from FSS, they must be a Federal agency or a contractor permitted to
make such purchases pursuant to FAR 51.101. For the reasons set forth
below, it is our view that VA research corporations may not purchase
items from FSS.
2. The FAR defines "Federal agency" as "any executive agency or
any independent establishment in the legislative or judicial branch
of the Government." FAR 2.101. The FAR defines "Executive agency" as
"an executive department, a military department, or any independent
establishment within the meaning of 5 U.S.C. 101, 102, and 104(1),
respectively, and any wholly owned Government corporation within the
meaning of 31 U.S.C. 9101."
3. A VA research corporation is not an executive agency, or
independent establishment within the legislative or judicial branch,
and does not, therefore, fall within the FAR definitions of "federal
agency" or "executive agency." VA research corporations are nonprofit
corporations established for the purpose of funding VA research. 38 U.S.C. 4161. These corporations are "required to comply only with
those Federal laws, regulations, and executive orders and directives
which apply generally to private nonprofit corporations." Id.
Further, they are "established in accordance with the nonprofit
corporation laws of the State in which the applicable medical center
is located and shall... be subject to the laws of such State." 38 U.S.C. 4165. "The character of these corporations shall
be that of
private corporations, but subject to certain forms of Federal
oversight." VA Circular 10-89-99, paragraph 4a (Sept.21, 1989). The
programs and operations of such corporations are considered the
programs and operations of the VA for the purposes of sections
4(a)(1) and 6(a)(1) of the Inspector General Act of 1978, and
considered an agency of the Federal Government for the purposes of
section 716 of title 31 U.S.C. (relating to availability of
information and inspection of records by the Comptroller General).
See 38 U.S.C. 4166.
4. A VA research corporation also is not a wholly-owned Government
corporation. Congress has stated that "these corporations would not
be considered for any purposes as corporations owned and controlled
by the United States." H.Rep. No.100-373, 100th Cong., lst Sess.5
(1987). Although the VA has certain forms of oversight over these
research corporations, they are entities distinct from the VA and are
not Federal agencies in their own right.
5. Certain Federal Government contractors are permitted access to
Federal supply sources, including FSS, in performing Government cost
reimbursement contracts, negotiated contracts with a substantial cost
reimbursement component, or fixed-price contracts involving security
classified information. FAR 51.101. The relationship between VA and
VA research corporations is statutory, not contractual. Such
corporations are "established solely to facilitate [VA] research." 38 U.S.C. 4162. Inasmuch as a VA research corporation is not a VA
contractor, it does not fall within the scope of FAR 51.101, and may
not purchase items from FSS.
6. Please direct any questions or comments regarding this opinion
to Paul Grabelle, at (202) 523-3699.
William E. Thomas, Jr.
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