Economy Act

The Economy Act or in full the Economy Act Agreement for Purchasing Goods or Services was a United States Act of Congress, which the U.S. Congress passed on March 15 1933. It permits Federal Government agencies to purchase goods or services from other Federal Government agencies or other major organizational units within the same agency. An Economy Act purchase is permitted only if: (1) amounts for the purchase are actually available, (2) the purchase is in the best interest of the Government, (3) the ordered goods or services cannot be provided by contract from acommercial enterprise, i.e., the private sector, as conveniently or cheaply as could be by the Government, and (4) the agency or unit to fill the order is able to provide or get by contract the ordered goods or services. The Act also tried to balance the federal budget by cutting the salaries of government employees and reducing pensions to veterans by as much as 15 percent, and by cutting the budgets of government departments by 25 percent. Nearly a billion dollars was saved by these measures.