B-186813-O.M. November 3, 1976

B-186813-O.M. November 3, 1976

Director, Claims Division:

The Director, Claims Division and the incumbents of positions in the Claims Division to which the Director may assign such responsibilities are hereby authorized to act for the Comptroller General of the United States in the acquisition and disposal of real property in connection with judgment sales, including the appointment of purchasing agents as provided in 31 U.S.C. 195. The Director of the Claims Division may promulgate such procedures as he considers necessary to exercise this authority.

Comptroller General of the United States

Memorandum

October 14, 1976

TO: Director, Claims Division

FROM: General Counsel - Paul G. Demblin

SUBJECT: Acquisition and disposition of real property through judgment sale

We have forwarded for signature by the Comptroller General the Standard Form 118 (Report of Excess Real Property) and accompanying cover letter to the General Services Administration (GSA) which your staff prepared at our direction in connection with the property acquired from Mr. Joe M. Gunstanson. The purpose of this memorandum is to confirm our concurrence with the procedures followed in the instant case and to recommend an alternative, should similar situations arise in the future.

This matter involved the collection of a claim transferred to the General Accounting Office (GAO) by the Department of the Army for further collection efforts under the Federal Claims Collection Act of 1966, 31 U.S.C. Sec.(s) 951-953 (1970), against Mr. Gunstanson. When the GAO efforts were unsuccessful, the matter was referred to the Department of Justice which, through the United States Attorney's Office for the Northern District of Texas, secured a judgment of $8,049.74, with interest, on November 18, 1974. A writ of execution was issued on April 7, 1976, and acting thereunder, the U.S. Marshal advertised certain of the debtor's real property for sale at a public auction to be held on July 6, 1976.

The U.S. Attorney's Office had the real property appraised at its liquidation (forced sale) value for purposes of the July 6, 1976, marshal's sale and was advised that the property, some 4.582 acres, should bring between $1,250 and $1,500 per acre. The Assistant U.S. Attorney concluded, on this basis, that the total liquidation value of the property would be between $5,800 and $6,900.

By letter dated July 1, 1976, B-186813, the Deputy Comptroller General appointed the Assistant United States Attorney to act as GAO's agent to bid on the property at the marshal's sale, pursuant to 31 U.S.C. Sec. 195 (1970), which provides:

"At every sale, on execution, at the suit of the United States, of lands or tenements of a debtor, the United States may, by such agent as the head of the department or independent agency at whose instance suit was instituted shall appoint, become the purchaser thereof; but in no case shall the agent bid in behalf of the United States a greater amount than that of the judgment for which such estate may be exposed to sale, and the costs. Whenever such purchase is made, the marshal of the district in which the sale is held shall make all needful conveyances, assignments, or transfers to the United States."

As thus authorized, the bid of $5,725 submitted on behalf of the United States was successful and the Marshal, by deed dated July 23, 1976, conveyed the debtor's right, title, and interest in the property to the United States. The judgment was credited with the amount of $5,618.02, that being the bid price less costs. The balance of the judgment is thought to be uncollectable.

The instant report to GSA concerning the property, via submission of a Standard Form 118, is required under 40 U.S.C. Sec.(s) 301 and 304a (1970), which provide, respectively, in pertinent part:

"The Administrator of General Services shall have charge of all lands and other property which have been or may be assigned, shutoff, or conveyed to the United States in payment of debts, and of all trusts created for the use of the United States in payment of debts due them * * *."

"Notwithstanding any other provisions of law, whenever any real property located outside of the District of Columbia, exclusive of military or naval reservations, heretofore or hereafter acquired by any Federal agency, by judicial process or otherwise in the collection of debts, purchase, donation, condemnation, devise, forfeiture, lease, or in any other manner, is, in whole or in part, declared to be in excess of its needs by the Federal agency having control thereof, or by the President on recommendation of the Administrator of General Services, the Administrator of General Services is authorized (a) to assign or reassign to any Federal agency or agencies space therein * * *; or (b) pending a sale, to lease such real property on such terms and for such period not in excess of five years as he may deem in the public interest; or (c) to sell the same at public sale to the highest responsible bidder upon such terms and after such public advertisement as he may deem in the public interest * * *."

While bidding-in, pursuant to 31 U.S.C. Sec. 195, has apparently been used infrequently in the collection of debts owed to the United States, it could be useful in some cases in which forced sale values might not otherwise be expected to approximate fair market values. The procedures adopted in processing this case as outlined above, would normally be appropriate for similar future cases involving the acquisition and disposition of real property as a result of a judgment sale. However, we recommend that you seek delegations to the Director of the Claims Division of the Comptroller General's authority (1) to appoint purchasing agents under 31 U.S.C. Sec. 195, and (2) to submit Standard Forms 118 to GSA in such circumstances, in view of the routine nature of these actions.