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

   ------------------------

   [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).