B-125570, OCTOBER 4, 1955, 35 COMP. GEN. 190

B-125570, OCTOBER 4, 1955, 35 COMP. GEN. 190

PROPERTY - FEDERAL SURPLUS PERSONAL PROPERTY - DISPOSAL BY SALE TO DISASTER AREAS THE DISPOSAL OF SURPLUS FEDERAL PERSONAL PROPERTY TO STATES IN DISASTER AREAS FOR SALE BY THE STATES TO DISASTER-DISTRESSED SMALL BUSINESS CONCERNS MAY BE AUTHORIZED BY THE ADMINISTRATOR OF GENERAL SERVICES UNDER SECTION 3 OF DISASTER ASSISTANCE ACT OF SEPTEMBER 30, 1954, WHICH CONTEMPLATES THAT FEDERAL AGENCIES MAY ACCEPT REIMBURSEMENT FOR SUPPLIES AND SERVICES FURNISHED TO THE STATES AND THAT THE STATES MAY DISPOSE OF SURPLUS PROPERTY BY SALE.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, OCTOBER 4, 1955:

REFERENCE IS MADE TO LETTER DATED SEPTEMBER 22, 1955, FROM THE ACTING ADMINISTRATOR OF GENERAL SERVICES, REQUESTING A DECISION WHETHER, WHEN AS DIRECTED BY THE ADMINISTRATOR OF THE FEDERAL CIVIL DEFENSE AGENCY, YOU PROPERLY COULD AUTHORIZE HOLDING AGENCIES TO DISPOSE OF SURPLUS GOVERNMENT PERSONAL PROPERTY TO STATES IN MAJOR DISASTER AREAS TO BE SOLD BY THE STATES TO SMALL BUSINESS CONCERNS IN NEED OF REHABILITATION AT PREESTABLISHED PRICES.

IT IS EXPLAINED IN THE ACTING ADMINISTRATOR'S LETTER THAT, AS A RESULT OF RECENT HURRICANES IN AND AROUND MASSACHUSETTS, MANY SMALL BUSINESS CONCERNS HAVE BEEN FLOODED AND LITERALLY WIPED OUT, THEREBY RESULTING IN UNEMPLOYMENT AND ECONOMIC DISTRESS TO PERSONS THERETOFORE EMPLOYED BY SUCH ESTABLISHMENTS. ALSO, IT IS EXPLAINED THAT MANY OF THESE SMALL BUSINESS CONCERNS ARE UNABLE TO SECURE DISASTER RELIEF, SUCH AS THAT OBTAINABLE BY DEFENSE PLANTS, SINCE THEY CANNOT QUALIFY FOR DISASTER LOANS OF MONEY OR OF DEFENSE EQUIPMENT. IT IS REPORTED THAT THE MASSACHUSETTS CONGRESSIONAL DELEGATION, IN ORDER TO ALLEVIATE SUCH DIFFICULTY, HAS SUGGESTED THAT SURPLUS PROPERTY BE MADE AVAILABLE TO THE STATE OF MASSACHUSETTS, FOR TRANSFER TO DISASTER-DISTRESSED SMALL BUSINESS, NOT BY DONATION, BUT BY SALE AT REASONABLE PRICES.

IN THESE CIRCUMSTANCES, IT IS PROPOSED THAT SURPLUS PROPERTY BE MADE AVAILABLE TO THE STATES WHICH, IN TURN, WOULD TRANSFER THE PROPERTY TO DISASTER-DISTRESSED SMALL BUSINESS CONCERNS AT FIXED PRICES DETERMINED IN ADVANCE TO BE REALISTIC IN TERMS OF NORMALLY REALIZABLE SALE PROCEEDS OF SURPLUS PROPERTY, AS WELL AS THE DISTRESSED CIRCUMSTANCES OF THE BUYERS.

IT IS SUGGESTED THAT AUTHORITY FOR SUCH DISPOSITION OF SURPLUS PROPERTY MAY BE CONTAINED IN SECTION 3 OF THE ACT OF SEPTEMBER 30, 1950, 42 U.S.C. 1855 (B), AS AMENDED, WHICH AUTHORIZES FEDERAL AGENCIES WHEN DIRECTED BY THE PRESIDENT (AUTHORITY DELEGATED TO THE FEDERAL CIVIL DEFENSE ADMINISTRATION BY EXECUTIVE ORDER NO. 10427, DATED JANUARY 16, 1953, 18 F.R. 407) TO PROVIDE ASSISTANCE IN ANY MAJOR DISASTER--- BY DONATING OR LENDING EQUIPMENT AND SUPPLIES, DETERMINED UNDER THEN EXISTING LAW TO BE SURPLUS TO THE NEEDS AND RESPONSIBILITIES OF THE FEDERAL GOVERNMENT, TO STATES FOR USE OR DISTRIBUTION BY THEM FOR THE PURPOSE OF THE ACT INCLUDING * * * ESSENTIAL REHABILITATION OF INDIVIDUALS IN NEED AS THE RESULT OF SUCH MAJOR DISASTER; * * * ANY FUNDS RECEIVED BY FEDERAL AGENCIES AS REIMBURSEMENT FOR SERVICES OR SUPPLIES FURNISHED UNDER THE AUTHORITY OF THIS SECTION SHALL BE DEPOSITED TO THE CREDIT OF THE APPROPRIATION OR APPROPRIATIONS CURRENTLY AVAILABLE FOR SUCH SERVICES OR SUPPLIES * * *.

HOWEVER, IT IS STATED THAT SINCE THE PROPOSED DISPOSITION OF THE PROPERTY MIGHT BE REGARDED AS A NEGOTIATED SALE OF THE PROPERTY, AND SINCE THE AUTHORITY OF THE ADMINISTRATOR OF GENERAL SERVICES TO AUTHORIZE NEGOTIATED SALES OF SURPLUS PROPERTY UNDER THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, BY THE ACT OF JULY 14, 1954, 68 STAT. 474, 40 U.S.C. 484 (E), EXPIRED ON JUNE 30, 1955, SOME QUESTION ARISES WHETHER THE ADMINISTRATOR OF GENERAL SERVICES COULD AUTHORIZE HOLDING AGENCIES TO DISPOSE OF SURPLUS GOVERNMENT PERSONAL PROPERTY FOR THE PURPOSES AND IN THE MANNER HEREIN INDICATED.

THE EXPIRATION OF YOUR GENERAL AUTHORITY TO DISPOSE OF SURPLUS PROPERTY BY NEGOTIATED SALE WOULD NOT PRECLUDE THE DISPOSAL OF SURPLUS PROPERTY IN THE MANNER CONSIDERED HEREIN, IF SUCH DISPOSITION IS OTHERWISE PROPER UNDER ANOTHER ACT OF THE CONGRESS, NAMELY, THE ACT OF SEPTEMBER 30, 1950, AS AMENDED. SECTION 3 OF THAT ACT DOES NOT EXPRESSLY REQUIRE REIMBURSEMENT FOR SURPLUS PROPERTY TRANSFERRED TO STATES OR LOCAL GOVERNMENTS. HOWEVER, THE SECTION DOES PROVIDE THAT " ANY FUNDS RECEIVED BY FEDERAL AGENCIES AS REIMBURSEMENT FOR SERVICES OR SUPPLIES FURNISHED UNDER AUTHORITY OF THIS SECTION SHALL BE DEPOSITED" ETC., THUS INDICATING THAT THE GOVERNMENT MAY ACCEPT REIMBURSEMENT FOR SUCH SUPPLIES OR SERVICES AS MAY BE FURNISHED TO THE STATES AND THAT THE STATES MIGHT DISPOSE OF SUCH SURPLUS PROPERTY BY SALE OR OTHERWISE IN SUCH A MANNER THAT FUNDS WOULD BE AVAILABLE FOR DEPOSIT.

IN VIEW THEREOF, WE PERCEIVE NO OBJECTION TO YOUR AUTHORIZING HOLDING AGENCIES TO DISPOSE OF SURPLUS PERSONAL PROPERTY PURSUANT TO ARRANGEMENTS MADE WITH THE STATE, WHEN SO DIRECTED BY THE ADMINISTRATOR OF THE FEDERAL CIVIL DEFENSE AGENCY, ON THE BASIS PROPOSED.