TITLE: B-310981, National Telecommunications and Information Administration--Gift Cards for Respondents to the Converter Box Coupon Program Survey, January 25, 2008
BNUMBER: B-310981
DATE: January 25, 2008
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B-310981, National Telecommunications and Information Administration--Gift Cards for Respondents to the Converter Box Coupon Program Survey, January 25, 2008
Decision
Matter of: National Telecommunications and Information
Administration--Gift Cards for Respondents to the Converter Box Coupon
Program Survey
File: B-310981
Date: January 25, 2008
DIGEST
The National Telecommunications and Information Administration (NTIA) may
use appropriated funds to purchase gift cards as an incentive to encourage
individuals to complete and return a survey designed to gather information
about NTIA's converter box coupon program. NTIA deems this information
essential to the success of the $1.5 billion program. Although a gift card
might otherwise be viewed as a personal expense, a direct connection
exists between the use of the gift cards and the production of information
important to the execution of NTIA's statutory duties. The amount of the
expenditure is modest, and the primary beneficiary of the expenditure is
the government.
DECISION
The Department of Commerce (Commerce) has requested a decision regarding
the National Telecommunications and Information Administration's (NTIA)[1]
plans to purchase gift cards for respondents to a survey in an effort to
increase the survey response rate and provide timely information to the
department. Letter from Barbara S. Fredericks, Assistant General Counsel
for Administration, Department of Commerce, to Gary L. Kepplinger, General
Counsel, GAO, Jan. 11, 2008 (Fredericks Letter). The survey is part of a
pilot program designed to evaluate NTIA's planned digital converter box
coupon program before full-scale launch of the program. Because of the
significant time constraints under which NTIA is operating, the need for
the information, and the direct connection between use of the gift cards
and the production of information important to NTIA's execution of its
statutory duties, we do not object to NTIA's use of appropriations to
purchase the gift cards.
Our practice when rendering decisions is to obtain the views of the
relevant federal agencies. GAO, Procedures and Practices for Legal
Decisions and Opinions, GAO-06-1064SP (Washington, D.C.: Sept. 2006),
available at www.gao.gov/legal.htm. Because Commerce asked that we
expedite our decision in this matter, we relied, in this case, on the
legal views and facts that Commerce provided us in its letter requesting
this decision and that Commerce officials provided us in a telephone
conference call. Fredericks Letter; Telephone Conversation between Anita
Wallgren, Program Director, NTIA; Milton Brown, Deputy Chief Counsel,
NTIA; Sarah Coe, Senior Counsel, Commerce; Thomas H. Armstrong, Assistant
General Counsel for Appropriations Law, GAO; and Wesley Dunn, Senior Staff
Attorney, GAO, Jan. 16, 2008 (NTIA Conversation).
We do not opine in this decision on NTIA's survey methodology or whether
the survey as designed is the best means of obtaining information
regarding the converter box coupon program.
BACKGROUND
The Digital Television Transition and Public Safety Act of 2005 (Act)
requires all full power television stations in the United States to cease
broadcasting analog signals and switch to digital broadcasts by February
17, 2009. Pub. L. No. 109-171, title III, sect. 3002, 120 Stat. 4, 21
(Feb. 8, 2006). Once the transition is complete, households with
televisions incapable of receiving a digital signal will be without
television service unless they subscribe to cable, satellite, or other
subscription television services, acquire a television capable of
processing and displaying a digital signal, or purchase a
digital-to-analog "converter box" to install on their analog television
sets. GAO, Digital Television Transition: Increased Federal Planning and
Risk Management Could Further Facilitate DTV Transition, GAO-08-43
(Washington, D.C.: Nov. 19, 2007), at 1.
To assist these households, the Act established a program, which NTIA
administers, to subsidize converter box purchases. Pub. L. No. 109-171,
sect. 3005. Each household may obtain a $40 coupon to be applied towards
the purchase of a converter box from a retailer participating in the
program.[2] Id. A single household may receive a maximum of two coupons,
but the two coupons may not be used towards the purchase of a single
converter box. Id.
The Act also established the Digital Television Transition and Public
Safety Fund (Fund) to cover the costs of the converter box coupon program.
Pub. L. No. 109-171, sect. 3004. The Fund consists of receipts from
auctions to be conducted by the Federal Communications Commission (FCC) of
portions of the radiomagnetic spectrum that become vacant as television
stations, pursuant to the Act's direction, cease broadcasting analog
signals.[3] Id. Initially, NTIA will borrow funds from the Treasury; NTIA
will reimburse Treasury as proceeds from the FCC auctions are deposited in
the Fund.[4] Id. sect. 3005(b); Fredericks Letter.
In March 2007, NTIA adopted a final rule regarding the design and
administration of the converter box coupon program. 47 C.F.R. part 301.
Households may apply for coupons by phone, mail, or the Internet. 47
C.F.R. sect. 301.3. Coupons arrive in the mail and may be redeemed at
participating retailers within 90 days of issuance.[5] Id. sect. 301.4.
In August 2007, NTIA contracted with International Business Machines (IBM)
to implement and conduct the converter box coupon program. Fredericks
Letter. Since then, NTIA and IBM have been setting up the coupon request
apparatus, certifying retailers to participate in the program, and
ensuring that retailers and their employees are ready to administer their
part of the program. Id. NTIA began accepting applications from consumers
for coupons on January 1, 2008. Id. IBM expects to begin issuing coupons
to applicants nationwide on February 17, 2008. Id.
Before consumers begin redeeming coupons on a large scale, NTIA and IBM
are conducting a pilot that will test the program's processes and systems
in an attempt to detect any problems. Id. NTIA and IBM have recruited 220
NTIA and IBM employees, as well as employees of IBM subcontractors, to
participate in the pilot program.[6] NTIA Conversation. NTIA is conducting
the pilot in the Washington, D.C., and Wichita, Kansas, areas. Id.
Like members of the public, participants will order coupons from NTIA,
take them to a local retailer and redeem them to purchase a converter box,
then install the converter box on their analog televisions. Id. NTIA asks
participants of the pilot program to fill out a questionnaire regarding
their experience. NTIA Conversation. IBM will review these questionnaires
to gather information regarding the efficacy of the converter box coupon
program.[7] Fredericks Letter. Using this information, NTIA and IBM hope
to fix problems with the coupon program before beginning the full-scale
launch of the program in mid-February 2008. Id.
As an incentive to complete and return the survey quickly, NTIA would like
to provide a gift card to every pilot program participant who returns a
completed survey. The card is worth $25 and redeemable at the retailer
where the participant purchased the converter box. Fredericks Letter.
Referring to the advice of IBM, NTIA believes that providing a $25 gift
card as an incentive will significantly increase the likelihood that
participants will complete the survey in a timely fashion. Id. NTIA would
purchase the gift cards with funds from the Digital Television Transition
and Public Safety Fund. Id. NTIA asks whether funds are available for this
purpose. Id.
DISCUSSION
At issue here is the use of appropriations to pay for an item that is
ordinarily considered to be a personal gift. As a general matter,
appropriated funds are not available for personal items, such as gift
cards. B-247966, June 16, 1993. However, we have not objected to the use
of appropriated funds to cover what would otherwise be personal items
where the benefit accruing to the government outweighs the personal nature
of the expense. See, e.g., B-309604, Oct. 10, 2007; B-309715, Sept. 25,
2007. Accordingly, in certain circumstances an agency's appropriated funds
may be available to provide items that may otherwise be personal in nature
when these items serve as incentives to acquire information necessary to
the achievement of the agency's statutory goals.
For example, in a 2005 decision, we agreed that the Veterans Benefits
Administration (VBA) could use its appropriations to provide light
refreshments at focus group meetings in order to encourage attendance at
the meetings and improve the quality of the information exchange.
B-304718, Nov. 9, 2005. VBA, to satisfy its statutory responsibility to
measure and evaluate its programs to determine their effectiveness,
conducted focus groups attended by veterans and their families. Id.
Relying on the advice of various experts, VBA had determined that holding
focus groups at the dinner hour and providing light refreshments was the
most effective means of conducting focus groups. Id. VBA also noted that
an offer of light refreshments at the focus groups created a relaxed
atmosphere more conducive to the free exchange of opinions crucial to a
focus group's success. Id. We concluded that although in other
circumstances the refreshments might be an impermissible use of
appropriated funds to cover personal expenditures, VBA's appropriation was
available to purchase light refreshments in these circumstances because
VBA had demonstrated a direct connection between the use of the particular
incentive and the accomplishment of VBA's statutory goals. Id.
In a 2000 decision, we agreed that the General Services Administration
(GSA) could use its appropriations to pay for prizes in a drawing held in
connection with customer satisfaction surveys. B-286536, Nov. 17, 2000.
GSA, responsible for the operation, maintenance, and protection of most
government buildings, is required to survey the public building needs of
federal agencies. 40 U.S.C. sect. 611. For several years, GSA had
attempted to collect such information through customer satisfaction
surveys of employees of its tenant agencies. B-286536. Faced with a
declining response rate, GSA proposed to offer prizes to individuals who
completed and returned the survey. Id. GSA determined that by offering the
prizes as incentives, individuals would be more likely to return the
surveys. Id. We concluded that in these circumstances, GSA, using
incentives, could encourage employees to participate in surveys they might
otherwise ignore, thereby providing GSA with information vital to its
statutory mission. Id.
In both of these cases, the agencies established a need for the
information sought and a direct connection between the use of incentives
and the production of information important to carry out the agency's
statutory responsibilities effectively. In a similar vein, NTIA would like
to use an incentive to stimulate the production of information it deems
essential to a quick evaluation of the processes and systems designed to
implement its converter box coupon program.
NTIA contends that the success of the $1.5 billion converter box coupon
program depends, in part, on obtaining consumer feedback regarding
glitches or failures in the system it has in place to administer the
program. Fredericks Letter. NTIA intends to obtain this feedback through
its pilot program; it views the pilot program as an "early warning system"
to identify problems prior to deployment of the system nationwide in
mid-February 2008. Id.
Of course, the pilot will prove useful only to the extent NTIA can
encourage participants to provide their feedback to NTIA, and NTIA
believes that offering gift cards as incentives for pilot program
participants to return surveys will greatly increase the response rate.
Id. NTIA's contractor, IBM, has told NTIA that incentives such as gift
cards are extremely important tools for ensuring a rate of response great
enough for NTIA to obtain meaningful information from the pilot program.
NTIA Conversation. See also Thomas W. Mangione, Mail Surveys, in Handbook
of Applied Social Research Methods, 408 (Leonard Bickman and Debra J. Rog
eds., 1998) ("Other than follow-up reminders, there is no technique more
likely to improve [a] response rate than incentives."). NTIA emphasizes
that it needs to obtain the information from the pilot program in a very
short time, so that it can make any necessary changes to correct problems
the pilot program identifies before the mid-February national launch of
the converter box coupon program. Fredericks Letter.
The benefit accruing to the government from the use of the gift cards
outweighs the personal nature of the expense involved. NTIA is operating
under significant time constraints, involving a $1.5 billion program. The
facts indicate a direct connection between the use of gift cards and the
production of information important to carrying out NTIA's statutory
duties, and the amount involved is modest. In these circumstances, we
would not object to the purchase of gift cards as an incentive for pilot
program participants to complete the surveys and return them in a timely
fashion.
CONCLUSION
We do not object to NTIA's use of its appropriation to purchase gift cards
for participants in its pilot program who complete and return a survey
regarding their experience. The government, rather than recipients of the
gift cards, is the primary beneficiary of the expense. NTIA is operating
under strict time constraints, and a direct connection exists between the
use of the gift cards and the production of information important to the
execution of NTIA's statutory duties.
Gary L. Kepplinger
General Counsel
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[1] NTIA is part of the Department of Commerce.
[2] Converter boxes are expected to cost between $50 and $70. Library of
Congress, Congressional Research Service, The Transition to Digital
Television: Is America Ready? No. RL34165 (Jan. 2, 2008), at 4.
[3] The FCC will auction off some of the newly freed wavelengths of the
spectrum to commercial wireless service providers and will dedicate the
remaining wavelengths to public safety communications services. GAO-08-43,
at 1. The first of these auctions took place on January 24, 2008. FCC,
Auctions, available at
wireless.fcc.gov/auctions/default.htm?job=auction_factsheet&id=73 (last
visited Jan. 24, 2008).
[4] In addition to funding the converter box coupon program, the Fund is
available for grants to assist public safety agencies in the acquisition
of communications systems, a digital television system in the New York
City area, various assistance programs for low-power television stations,
and a national tsunami warning program. Pub. L. No. 109-171, sections
3006-3010. At the end of fiscal year 2009, the Secretary of Commerce will
transfer $7.363 billion from the Fund to the general fund of the Treasury
to contribute towards reduction of the federal deficit. Id. sect. 3004;
GAO-08-43, at 1.
[5] Participating retailers include large national electronics chains.
NTIA Conversation.
[6] Fewer than 20 participants are NTIA employees, and NTIA determined
that because participation in the converter box coupon program is not the
type of activity that NTIA employees would perform pursuant to their
regular duties, it cannot compel its employees to participate in the pilot
program. NTIA Conversation.
[7] We assume, for purposes of this decision, that the pilot program
complies with the requirements of the Paperwork Reduction Act of 1995
regarding surveys conducted by government agencies. Pub. L. No. 104-13,
109 Stat. 163 (May 22, 1995).