No-Cost Contracts for Event Planning Services
B-308968, Nov 27, 2007
We conclude that the NCSI contract is a valid, binding no-cost contract that agencies may utilize to obtain conference planning services without violating the voluntary services prohibition of the Antideficiency Act, 31?U.S.C. 1342. Because of the terms and conditions of the NCSI contract, an agency would incur no financial liability and NCSI would have no expectation of payment from the government. Before engaging in no-cost contracts, however, agencies should address several considerations to balance the financial flexibility of no-cost contracts with achievement of agency objectives in hosting a conference.
The NCSI contract is a valid, binding no-cost contract.
B-308968, No-Cost Contracts for Event Planning Services, November 27, 2007
The Honorable Barbara A. Mikulski
United States Senate
Dear Senator Mikulski:
This opinion responds to your letter of
We conclude that the NCSI contract is a valid, binding no-cost contract that agencies may utilize to obtain conference planning services without violating the voluntary services prohibition of the Antideficiency Act, 31 U.S.C. sect. 1342. Because of the terms and conditions of the NCSI contract, an agency would incur no financial liability and NCSI would have no expectation of payment from the government. Before engaging in no-cost contracts, however, agencies should address several considerations to balance the financial flexibility of no-cost contracts with achievement of agency objectives in hosting a conference.
NCSI provides event planning, production and support services. NCSI, About NCSI—Who We Are, available at www.ncsievents.com/aboutncsi/who_we_are.aspx (last visited
NCSI's services include: Planning; Selecting venues; Negotiating contracts; Marketing; Coordinating logistics; Taking registrations; Processing payments; [and] Post-event reporting. NCSI, Federal, Intelligence Community and Department of Defense Services—Conferences, available at www.ncsievents.com/federal/federal_conferences.aspx (last visited
The proposed NCSI contract provides:
The Contractor may choose to provide for all services as required by the task order at no cost to the Government. The Contractor is entitled to all of the registration, exhibition, sponsorship and/or other fees collected as payment for performance under the task order if there is no cost to the Government. In this case, the Contractor is liable for all costs related to the performance of the task order as defined in the task order and the government's liability for payment of services under this task order is 'zero.'
NCSI Letter, Exhibit E. NCSI explained that it recoups its costs by charging the attendee and exhibitor participants of the event. NCSI Letter.
Generally, a no-cost contract is a formal arrangement between a government entity and a vendor under which the government makes no monetary payment for the vendor's performance. B-302811,
The Antideficiency Act prohibits federal agencies from accepting voluntary services without specific statutory authority. 31 U.S.C. sect. 1342. The purpose of the prohibition is to preclude situations that might generate claims for compensation that might exceed an agency's available funds. See, e.g., B'211079.2,
We have previously examined no-cost contracts in the context of the voluntary services prohibition. In 1928, we concluded that the Federal Trade Commission (FTC) was not prohibited from entering into a no-cost contract for stenographic services. 7 Comp. Gen. 810 (1928). There, FTC gave the contractor the exclusive right to report FTC proceedings and to sell copies of transcripts to the public at rates specified in the contract; in return, the contractor would furnish copies to FTC without cost.
More recently, we found no violation when the General Services Administration (GSA) proposed a no-cost contract with real estate brokers. B---302811,
Critical in the GSA case were the terms and conditions of the contract and the attendant expectations of each party regarding payment. We emphasized, Because the contract was constructed as a no cost contract, GSA will have no financial liability to [the] brokers, and [the] brokers will have no expectation of a payment from GSA. B'302811,
In its contract, NCSI would stipulate that it will provide its services at no cost to the Government, specifying that the government's liability for payment of services under this task order is 'zero.' NCSI Letter, Exhibit E. NCSI expects to retain all of the registration, exhibition, sponsorship and/or other fees collected as payment for performance.
In 2006, the Department of Justice's Office of Legal Counsel (OLC) addressed a Department of Commerce proposal asking whether an agency, when hosting a conference, may permit its contractor (1) to provide meals, lodging, refreshments, and other goods and services to conference attendees and (2) to charge the attendees a 'personal convenience' fee to cover the costs of these items. Memorandum Opinion for the General Counsel, Department of Commerce, Applicability of the Miscellaneous Receipts Act to Contractors Receiving Personal Convenience Fees from Attendees at an Agency-Sponsored Conference, OLC Opinion,
Notably, the scenario presented by the Department of Commerce to OLC differs from scenarios that we have considered previously regarding agency attempts to collect fees from conference participants. In 2005, we advised the National Institutes of Health (NIH) that absent statutory authority to charge a fee and retain the proceeds, neither NIH, nor a contractor on its behalf, may charge a registration or other fee to defray the costs of providing meals or light refreshments integral to a conference. B'300826,
As with the no-cost contract GSA employed with real estate brokers, we do not opine on the wisdom of such arrangements for conference planning services. Although a no-cost contract such as that offered by NCSI does not violate the Antideficiency Act, there are other considerations beyond compliance with fiscal laws that an agency should take into account before agreeing to a no-cost contract. An agency contemplating use of a no-cost contract for conference planning services should weigh the value of the services received from the contractor with that of the concession offered by the contractor. Important considerations include, for example, who may approve and sign such contracts, registration procedures and collection of fees, and, particularly where many, if not most, attendees are expected to be government employees, the ultimate cost to the government as a whole. Agency officials also should consider possible conflicts of interest before signing a no-cost contract, keeping in mind that control of the agenda, selection of speakers, and other matters concerning content should serve the government's, not the contractor's, purpose. In addition, agencies should ensure an open, transparent selection process before entering into no-cost contracts. Ultimately, an agency must not lose sight of its objectives for a particular event and should ensure that in avoiding costs to the agency, it does not take actions that compromise the effectiveness of its conference, undermine the achievement of agency goals, or violate ethics rules.
The NCSI contract is a valid, binding no-cost contract. An agency may enter into such a contract without violating the Antideficiency Act's voluntary services prohibition, 31 U.S.C. sect. 1342. Services performed pursuant to a formal contract, in which the agency has no financial obligation and the contractor has no expectation of payment from the government, are not voluntary within the meaning of the prohibition.
Gary L. Kepplinger
 Our practice when rendering legal opinions is to obtain the views of the relevant agency to establish a factual record and to elicit the agency's legal position on the subject matter of the request. GAO, Procedures and Practices for Legal Decisions and Opinions, GAO-06-1064SP (
 To be enforceable, a contract with the
 The Act makes an exception for emergencies involving the safety of human life or the protection of property. 31 U.S.C. sect. 1342.
 GAO has also considered award of various no-cost contracts in the context of bid protests. See, e.g., B-283731.2,
 In our decision, we did not evaluate the soundness of the terms of the contract or advisability of entering into no-cost contracts. B-291947,
 An agency, of course, may request legislation authorizing the agency to charge an attendance fee at conferences and use the fees to offset conference costs. B'306663,