B-129338, NOV. 28, 1956

B-129338: Nov 28, 1956

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

PRESIDENT OF THE BOARD OF COMMISSIONERS OF THE DISTRICT OF COLUMBIA: FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 25. THE ACCOUNTING OFFICER OF THE DISTRICT OF COLUMBIA RECENTLY HAS EXPRESSED DOUBT THAT NEGOTIATED CONTRACTS ARE AUTHORIZED BY THE LANGUAGE OF THE ACT. OUR CIVIL ACCOUNTING AND AUDITING DIVISION HAS REPORTED THAT EACH VOUCHER UNDER THE CONTRACTS IN QUESTION REPRESENTS A SEPARATE TRANSACTION AND THAT THE CHARGES ARE USUALLY SMALL. FORTY-ONE TRANSACTIONS WERE SETTLED BY A TITLE COMPANY APPOINTED BY THE COMMISSIONERS AND THE TOTAL COST FOR THE YEAR WAS $1. IT HAS BEEN REPORTED THAT ALL OF THE TITLE COMPANIES IN THE DISTRICT OF COLUMBIA QUOTE SUBSTANTIALLY IDENTICAL CHARGES FOR THEIR SERVICES AND ALL QUALIFY THEIR PROPOSALS BY STATING THAT STANDARD COMMERCIAL RATES WILL APPLY FOR ANY SERVICE NOT MENTIONED IN THE CONTRACT.

B-129338, NOV. 28, 1956

TO THE HONORABLE ROBERT E. MCLAUGHLIN, PRESIDENT OF THE BOARD OF COMMISSIONERS OF THE DISTRICT OF COLUMBIA:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 25, 1956, REQUESTING OUR DECISION AS TO WHETHER CONTRACTS ENTERED INTO WITH TITLE COMPANIES PURSUANT TO THE ADDITIONAL POWERS ACT OF DECEMBER 20, 1944, MAY BE AWARDED WITHOUT ADVERTISING FOR BIDS.

SECTION 5 OF THE ADDITIONAL POWERS ACT OF DECEMBER 20, 1944, DISTRICT OF COLUMBIA CODE SECTION 1-248, 58 STAT. 822, PROVIDES:

"THE COMMISSIONERS MAY, IN THEIR DISCRETION AND WHEN THEY DEEM SUCH ACTION TO BE IN THE PUBLIC INTEREST, EFFECT SETTLEMENT WITH OWNERS OF REAL ESTATE AUTHORIZED TO BE ACQUIRED BY PURCHASE OR CONDEMNATION FOR DISTRICT OF COLUMBIA PURPOSES, THROUGH SUCH TITLE COMPANY OR COMPANIES IN THE DISTRICT OF COLUMBIA AS MAY BE DESIGNATED BY THE COMMISSIONERS, AND TO PAY FROM APPROPRIATIONS AVAILABLE FOR THE ACQUISITION OF SUCH PAY FROM APPROPRIATIONS AVAILABLE FOR THE ACQUISITION OF SUCH REAL ESTATE REASONABLE FEES TO COVER THE COST OF THE SERVICES RENDERED BY SUCH TITLE COMPANY OR COMPANIES.'

UNDER HIS INTERPRETATION OF THIS ENACTMENT, THE ADMINISTRATIVE SERVICES OFFICER OF THE DISTRICT OF COLUMBIA HAS NEGOTIATED CONTRACTS WITH TITLE COMPANIES FOR THEIR SERVICES. HOWEVER, THE ACCOUNTING OFFICER OF THE DISTRICT OF COLUMBIA RECENTLY HAS EXPRESSED DOUBT THAT NEGOTIATED CONTRACTS ARE AUTHORIZED BY THE LANGUAGE OF THE ACT. OUR CIVIL ACCOUNTING AND AUDITING DIVISION HAS REPORTED THAT EACH VOUCHER UNDER THE CONTRACTS IN QUESTION REPRESENTS A SEPARATE TRANSACTION AND THAT THE CHARGES ARE USUALLY SMALL. FOR EXAMPLE, DURING FISCAL YEAR 1956, FORTY-ONE TRANSACTIONS WERE SETTLED BY A TITLE COMPANY APPOINTED BY THE COMMISSIONERS AND THE TOTAL COST FOR THE YEAR WAS $1,333.75, THE AVERAGE COST PER TRANSACTION BEING $32.53. ALSO, IT HAS BEEN REPORTED THAT ALL OF THE TITLE COMPANIES IN THE DISTRICT OF COLUMBIA QUOTE SUBSTANTIALLY IDENTICAL CHARGES FOR THEIR SERVICES AND ALL QUALIFY THEIR PROPOSALS BY STATING THAT STANDARD COMMERCIAL RATES WILL APPLY FOR ANY SERVICE NOT MENTIONED IN THE CONTRACT.

IN THE CIRCUMSTANCES, YOU QUESTION WHETHER IT IS NECESSARY TO COMPLY WITH THE ADVERTISING REQUIREMENT OF SECTION 3709, REVISED STATUTES, AS AMENDED, DISTRICT OF COLUMBIA CODE SECTION 1-808, INSOFAR AS CONTRACTING WITH TITLE COMPANIES IS CONCERNED.

IN A-65358, OCTOBER 4, 1935, IT WAS DECIDED THAT WHEN THE SERVICES OF TITLE COMPANIES ARE NEEDED BY THE GOVERNMENT THEY SHOULD BE OBTAINED BY THE SOLICITATION OF BIDS ON A COMPETITIVE BASIS AND BY AWARD MADE TO THE LOWEST RESPONSIBLE BIDDER. CF. A-65358, OCTOBER 18, 1935. INASMUCH AS SECTION 3709, REVISED STATUTES, WAS AMPLE AUTHORITY FOR THE PROCUREMENT OFFICES OF THE DISTRICT OF COLUMBIA TO SECURE THE SERVICES OF TITLE COMPANIES BY ADVERTISEMENT, IT APPEARS REASONABLE TO ASSUME THAT THE CONGRESS IN ENACTING SECTION 5 OF THE ADDITIONAL POWERS ACT CONTEMPLATED SOME CHANGE FROM THE REQUIREMENTS OF SECTION 3709 AND INTENDED THAT CONTRACTS FOR THE PROCUREMENT OF THE SERVICES OF TITLE COMPANIES SHOULD BE ENTERED INTO WITHOUT THE NECESSITY OF COMPLYING WITH THE ADVERTISING REQUIREMENT. AS STATED IN YOUR LETTER, EFFECT MUST BE GIVEN TO THE AUTHORITY NECESSARILY ENCOMPASSED IN THE WORD "DESIGNATED" AS USED IN SECTION 5. WE AGREE THAT THE WORD "DESIGNATED" COULD HAVE BEEN INTENDED TO AUTHORIZE APPOINTMENT WITHOUT REGARD TO SECTION 3709.

INASMUCH AS THE CHARGES OF THE VARIOUS TITLE COMPANIES ARE SUBSTANTIALLY IDENTICAL AND STANDARD COMMERCIAL RATES ARE TO APPLY WHEN NO RATE IS PROVIDED FOR ANY PARTICULAR SERVICE, THE "REASONABLE FEES" REQUIREMENT OF THE ACT WOULD BE SATISFIED BY A CERTIFICATION EXECUTED BY THE TITLE COMPANY THAT THE CLAIMED IS NOT IN EXCESS OF THE PREVAILING STANDARD COMMERCIAL RATE FOR SUCH SERVICES.

ACCORDINGLY, YOU ARE ADVISED THAT NO QUESTION WILL BE RAISED BY OUR OFFICE WITH RESPECT TO PAYMENTS FOR SUCH SERVICES BY REASON OF FAILURE TO ADVERTISE THEREFOR, PROVIDED THE INVOICES OR VOUCHERS ARE SUPPORTED BY CERTIFICATION OF THE TITLE COMPANY THAT THE CHARGES ARE NOT IN EXCESS OF THE PREVAILING STANDARD COMMERCIAL RATES FOR THE SERVICES RENDERED.