DEPARTMENT OF THE NAVY
NAVY EXCHANGE SERVICE COMMAND
3280 VIRGINIA BEACH BOULEVARD
VIRGINIA BEACH, VIRGINIA 23452-5724

OC:RBP:mr
(757) 631-3610

July 11, 2000

MEMORANDUM

SUBJECT: Inapplicability of the Robinson-Patman Act to the Procurements by the Navy Exchange Service Command (NEXCOM)

The Navy Exchange Service Command (NEXCOM) serves as the headquarters element of the worldwide Navy Exchange System. NEXCOM is a nonappropriated fund instrumentality of the U.S. Government performing governmental functions and is entitled to all the privileges and immunities of the U.S. Government. See e.g., Standard Oil Company of California v. Johnson, 316 U.S. 481, 62 S. Ct. 1168 (1942) and U.S.v. State Tax Commission of Mississippi, 421 U.S. 599, 95 S. Ct. 1872 (1975).

The Robinson-Patman Act makes it unlawful to discriminate in price between different purchasers if the effect of the discrimination may substantially lesson competition or create a monopoly. The Robinson-Patman Act does not apply to sales to NEXCOM or other elements of the U.S. Government. See e.g., Champaign Urbana News Agency, Inc. v. J.L. Cummins News Co., Inc., 632 F. 2d 680 (7th Cir. 1980). Consequently, vendors, concessionaires or other contractors may legally offer NEXCOM terms more favorable than to any other purchaser; neither the offer of the more favorable terms nor their acceptance by NEXCOM violates the Robinson-Patman Act.

Any vendor, concessionaire or other contractor requiring additional information should have their legal counsel contact the Office of Counsel, Navy Exchange Service Command at (757) 631-3610.

Michael D. Rigg

Counsel