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As federal budgets have continued to tighten, the scrutiny over agency spending has also increased, including the use of appropriated funds for the purchase of “swag.” However, in the context of agency award programs, swag items do not meet the criteria for either an honorary or informal recognition award because the items are not given on the basis of employee performance or contribution as required by 5 U.S.C. 4503.
In limited circumstances, merchandise may be appropriate to be given as an honorary or informal recognition award. For instance, a commemorative plaque presented to an employee in recognition of his/her significant contribution to the agency would be appropriate when it meets all of the following criteria for an honorary award:
Informal recognition awards are awards intended to recognize accomplishments of lesser scope that might otherwise go unrecognized. Items that are provided as informal recognition awards must meet all the following criteria:
Swag is merchandise such as mugs, shirts, key chains, pens, hats, thermoses, and bags that typically display an agency’s name or seal. Swag items are commonly distributed to all employees or participants at a particular event for the sole purpose of promoting or advertising the agency or organization. As noted above, it is important to recognize the distinction between swag items and nonmonetary awards. Executive Order 13589 calls upon all agencies to reduce spending on “extraneous promotional items”—swag. To promote efficient, cost-effective spending in accordance with E.O. 13589, agencies should consider reducing or eliminating the use of swag in their agencies. These items represent a tangible cost to the agency that is not justifiable under current fiscal conditions. Agencies should also review their incentive awards programs to ensure that the costs for nonmonetary award items used in those programs are being offset fully by the benefits realized and not adding significant costs to the agency’s awards spending.