B-129254, SEP. 28, 1956

B-129254, SEP. 28, 1956

TO THE HONORABLE H. V. HIGLEY, ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 18, 1956, SUBJECT: SALE OF THE CARGO OF THE STEAMSHIP "LEWIS LUCKENBACH" AS FOREIGN EXCESS PROPERTY.

IT IS INDICATED IN YOUR LETTER AND THE ATTACHMENTS THERETO THAT IN 1917, THE STEAMSHIP "LEWIS LUCKENBACH" WAS SUNK BY A GERMAN SUBMARINE OFF THE COAST OF FRANCE AND THAT THE HULL AND CARGO OF THE SHIP HAD BEEN INSURED FOR THEIR FULL VALUE BY THE BUREAU OF WAR RISK INSURANCE. BY PAYING THE FULL VALUE OF THE HULL AND INSURED CARGO TO THE OWNERS THEREOF, IT IS REPORTED THE BUREAU BECAME ENTITLED BY SUBROGATION TO THE RIGHTS OF THE OWNERS. SUBSEQUENTLY, THE VETERANS ADMINISTRATION ACQUIRED ALL THE PROPERTY WHICH HAD BELONGED TO THE BUREAU. IT IS FURTHER REPORTED THAT A PRIVATE CORPORATION DESIRES TO SALVAGE THE CARGO AND HAS OFFERED TO PURCHASE ALL RIGHT, TITLE AND INTEREST OF THE GOVERNMENT IN THE SAME FOR EITHER $14,000 IN CASH OR $1,500 CASH PLUS 10 PERCENT OF THE NET VALUE OF THE CARGO WHICH MAY BE SALVAGED. YOU STATE THAT REPRESENTATIVES OF THE VETERANS ADMINISTRATION AND THE MARITIME COMMISSION CONSIDER THE FORMER OFFER TO BE PREFERABLE. YOU FURTHER STATE:

"I BELIEVE THAT IT WILL BE MOST PRACTICABLE AND ADVANTAGEOUS TO THE GOVERNMENT TO DISPOSE OF THE INTEREST OF THE VETERANS ADMINISTRATION IN SAID CARGO IN THE ACCEPTANCE OF THE FIRM OFFER AS REFERRED TO HEREIN.'

YOU REQUEST OUR ADVICE AS TO WHETHER, UNDER THE CIRCUMSTANCES, THE OFFER OF $14,000 IN CASH MAY BE ACCEPTED ON THE BASIS OF A NEGOTIATED CONTRACT.

TITLE IV OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, COVERING THE DISPOSAL OF FOREIGN EXCESS PROPERTY, 63 STAT. 397, PROVIDES IN PERTINENT PART AS FOLLOWS:

"SEC. 401. EACH EXECUTIVE AGENCY HAVING FOREIGN EXCESS PROPERTY SHALL BE RESPONSIBLE FOR THE DISPOSAL THEREOF: PROVIDED, THAT (A) THE HEAD OF EACH SUCH EXECUTIVE AGENCY SHALL, WITH RESPECT TO THE DISPOSITION OF SUCH PROPERTY, CONFORM TO THE FOREIGN POLICY OF THE UNITED STATES * * *.

"SEC. 402. FOREIGN EXCESS PROPERTY MAY BE DISPOSED OF (A) BY SALE, EXCHANGE, LEASE, OR TRANSFER, FOR CASH, CREDIT, OR OTHER PROPERTY, WITH OR WITHOUT WARRANTY, AND UPON SUCH OTHER TERMS AND CONDITIONS AS THE HEAD OF THE EXECUTIVE AGENCY CONCERNED DEEMS PROPER; BUT IN NO EVENT SHALL ANY PROPERTY BE SOLD WITHOUT A CONDITION FORBIDDING ITS IMPORTATION INTO THE UNITED STATES, UNLESS THE SECRETARY OF AGRICULTURE (IN THE CASE OF ANY AGRICULTURAL COMMODITY, FOOD, OR COTTON OR WOOLEN GOODS) OR THE SECRETARY OF COMMERCE (IN THE CASE OF ANY OTHER PROPERTY) DETERMINES THAT THE IMPORTATION OF SUCH PROPERTY WOULD RELIEVE DOMESTIC SHORTAGES OR OTHERWISE BE BENEFICIAL TO THE ECONOMY OF THIS COUNTRY * * *. SUCH PROPERTY MAY BE DISPOSED OF WITHOUT ADVERTISING WHEN THE HEAD OF THE EXECUTIVE AGENCY CONCERNED FINDS SO DOING TO BE MOST PRACTICAL AND TO BE ADVANTAGEOUS TO THE GOVERNMENT. * * *"

YOU FURTHER STATE IN YOUR LETTER THAT THERE WERE SOME STRATEGIC AND CRITICAL MATERIALS IN THE CARGO OF THE S.S. LEWIS LUCKENBACH BUT THAT PURSUANT TO SECTION 6 (A) OF THE STRATEGIC AND CRITICAL MATERIALS STOCK PILING ACT, AS AMENDED, 60 STAT. 598, A DETERMINATION HAS BEEN MADE THAT THE MATERIALS IN THE CARGO CANNOT ECONOMICALLY BE CONVERTED TO MEET STOCK- PILE REQUIREMENTS. ALSO, IT IS REPORTED THAT THE DEPARTMENT OF STATE HAS APPROVED THE PROPOSED DISPOSAL SUBJECT TO CERTAIN SAFEGUARDS.

THE MATERIALS IN QUESTION APPEAR TO BE "FOREIGN EXCESS PROPERTY" WITHIN THE MEANING OF SECTION 3 (E) AND 3 (F) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT. IN LIGHT OF THE CLEAR AUTHORITY VESTED IN THE HEAD OF THE EXECUTIVE AGENCY BY SECTION 402 OF THE ACT TO DISPOSE OF SUCH PROPERTY WITHOUT ADVERTISING, WE PERCEIVE NO REASON WHY THE MATERIALS MAY NOT BE DISPOSED OF BY NEGOTIATED SALE UPON A DETERMINATION BY YOU THAT SUCH METHOD OF SALE IS MOST PRACTICABLE AND IS ADVANTAGEOUS TO THE GOVERNMENT, AND WE WOULD INTERPOSE NO OBJECTION TO SUCH A SALE.