Impoundment Control

This letter reports a deferral of budget authority in the Department of Veterans Affairs (VA) major construction appropriation that should have been, but was not, reported to Congress under the Impoundment Control Act of 1974. VA intends to build a spinal cord injury facility at its Medical Center in Dallas, Texas. However, VA has decided to extend the working drawing award and construction timeframes of the third phase (clinical renovation) of the facility. The rationale for the delay is twofold. First, dividing the project into phases spreads out the facilities financing. Second, there is no sense in designing phase three now if no guarantee exists that VA will be able to obtain enough appropriations in the future to proceed with the actual construction. The Impoundment Control Act permits deferrals only to provide for contingencies, achieve savings, or as specifically provided by law. VA's reasons for delaying the final phase of the working drawing are impermissible under the act's narrow criteria, and GAO concludes that the deferral is unauthorized.

GAO found that the VA action to delay awarding a working drawing contract for the third phase of its project constitutes an unauthorized deferral of budget authority, since the delay: (1) is not the result of any unavoidable delay; and (2) does achieve savings.