Memorandum for the Heads of Executive Departments and Agencies on Year-End Buying by the Federal Government

Memorandum for the Heads of Executive Departments and Agencies
Subject: Control of Year-End Buying

Your support thus far in our efforts to eliminate duplication and waste in the Federal Government has been gratifying. I appreciate, in particular, your determination and willingness to re-examine existing programs and practices and to apply new procedures and concepts (such as zero-base budgeting) so as to achieve more efficient management and operation of Federal programs.

Consistent with these efforts, I want to bring to your attention a potential problem that needs to be addressed by all of us--"year-end buying." This becomes a problem when an agency rushes to use funds in the last few weeks of the fiscal year without clear and desirable reasons for doing so. Such a practice is generally an attempt to use up funds that would otherwise lapse because the availability of unobligated funds is greater than is necessary to carry out approved programs.

I do not want "year-end buying" to undermine or offset any efforts to reduce costs and eliminate waste. Prudence must be exercised at all times in purchasing goods and services. Special attention is needed at the year's end to resist the temptation to use up available appropriations unnecessarily. Accordingly, I ask that each of you issue internal instructions in your department or agency to assure that:

--obligations for the fourth quarter of the fiscal year do not exceed obligations for the third quarter, except where a higher level is fully justified to carry out a seasonal requirement or an essential program objective or to restore to approved levels in an orderly way a program which has slipped behind schedule.
--orders for supplies, materials, and equipment are kept to the minimum required to meet approved program needs.
--purchases are managed so that inventories are maintained at low optimum levels.
--additional purchase orders and contracts for goods or services (for delivery extending into the next fiscal year) are let when doing so results in a cost advantage to the Government.

I count on your full cooperation and personal attention in maximizing the economies that can be achieved through rational control of year-end buying.

JIMMY CARTER