Telephone Service/Utilities Contract + "Letter of Agency" or Letter of Authorization (FAR 51)

[govt2310]

Does anyone have experience with telephone service/utility contracts and "Letters of Agency"?

My agency has a contract for IT services from a KTR. In order to perform the IT services they are contractually obligated to provide, the KTR needs to have cooperation from our local telephone provider. The telephone provider refuses to work with the KTR until the KTR provides a "Letter of Agency" signed by my agency.

The DRAFT LOA states: "[the KTR] is authorized to act on behalf of [the agency] for the acquisition of supplies/services . . . leasing/rental of equipment . . . In addition . . . [KTR] has the authority for the issuance of tax exempt status for these supplies/services . . . ."

We looked at FAR 51 and are not sure if this constitutes a "Letter of Authorization" as detailed in FAR 51. Also, the KTR is not being authorized to purchase off of another government contract, which is what FAR 51 is about. And we are wary of the "tax exempt status" language.

Can anyone shed light on this for us? My agency does not usually encounter telephone service/utility contract matters. Should we sign the LOA? If we should modify the LOA, how so?

[charles]

Hello,

You said. The DRAFT LOA states: "[the KTR] is authorized to act on behalf of [the agency] for the acquisition of supplies/services . . . leasing/rental of equipment . . . In addition . . . [KTR] has the authority for the issuance of tax exempt status for these supplies/services . . . ."

My Comments

Authorized to act. Personally, language is a bit much. I would consider revising it. It appears sentence is authorizing KO authority to KTR.

Immunity from Taxes. Normally, KTR pays taxes. See 48 CFR 29.303. Also, there is case law, sorry, I do not remember the citation or name.

Other provisions in LOA. Sometimes these agreements contain indemnity language. Remember the Government is not authorized to enter into open ended indemnity agreements. Open ended agreements may potentially trigger an ADA.

Working with utlities can be difficult. I am sure others in this forum may provided additional insight to your concerns.

Happy Holidays

[napolik]

Does anyone have experience with telephone service/utility contracts and "Letters of Agency"?

My agency has a contract for IT services from a KTR. In order to perform the IT services they are contractually obligated to provide, the KTR needs to have cooperation from our local telephone provider. The telephone provider refuses to work with the KTR until the KTR provides a "Letter of Agency" signed by my agency.

The DRAFT LOA states: "[the KTR] is authorized to act on behalf of [the agency] for the acquisition of supplies/services . . . leasing/rental of equipment . . . In addition . . . [KTR] has the authority for the issuance of tax exempt status for these supplies/services . . . ."

We looked at FAR 51 and are not sure if this constitutes a "Letter of Authorization" as detailed in FAR 51. Also, the KTR is not being authorized to purchase off of another government contract, which is what FAR 51 is about. And we are wary of the "tax exempt status" language.

Can anyone shed light on this for us? My agency does not usually encounter telephone service/utility contract matters. Should we sign the LOA? If we should modify the LOA, how so?

While I would be willing to provide information or documents pertinent to a tax exemption for the contractor supporting my agency, I would be leery of signing any LOA. Take a look at FAR Part 29 for direction. Specifically see FAR 29.303 and FAR 29.305. The former FAR section says the following at paragraphs (a) and (:

Quote

29.303 -- Application of State and Local Taxes to Government Contractors and Subcontractors.

(a) Prime contractors and subcontractors shall not normally be designated as agents of the Government for the purpose of claiming immunity from State or local sales or use taxes. Before any activity contends that a contractor is an agent of the Government, the matter shall be referred to the agency head for review. The referral shall include all pertinent data on which the contention is based, together with a thorough analysis of all relevant legal precedents.

( When purchases are not made by the Government itself, but by a prime contractor or by a subcontractor under a prime contract, the right to an exemption of the transaction from a sales or use tax may not rest on the Government's immunity from direct taxation by States and localities. It may rest instead on provisions of the particular State or local law involved, or, in some cases, the transaction may not in fact be expressly exempt from the tax. The Government's interest shall be protected by using the procedures in 29.101.

Unquote

The latter FAR section addresses evidence needed to establish an exemption from State or local taxes.

[formerfed]

I ran in this several years ago. This is from Wikiperdia;

A Letter of Agency (LOA) is a document authorizing a telecommunications provider to act on a consumer's behalf. Some vendors may also call this a Letter of Authorization This is generally required in the United States when switching a telephone service provider while keeping the current telephone number or any other service which requires transfer of information from one provider to another. The regulations governing this are maintained by the Federal Communications Commission.

So if you want your contractor to act on your behalf, your local telephone company needs the letter per the FCC. I would call the local telephone company and see what specific information they need in the letter from you.